AgileCamp 2014 Keynote: Extending Agility, Ryan Martens

www.rallydev.com @RallyOn ©2014
Extend Agility:
3 Key Steps to Remaining Competitive
Ryan Martens – Founder, CTO

Ryan Martens
@RallyO
nChief Technology Officer
Rally Software

To remain
competitive

Extend agility
beyond your
development
teams

EXTEND AGILITY…?

An example…

Consumer data
company

Market$Share$
1 2 3 4 5 6 7 8
1 80% market share

Market$Share$
1 2 3 4 5 6 7 8
2 “ We need a native mobile app.”

Market$Share$
1 2 3 4 5 6 7 8
3 App specification begins

Market$Share$
1 2 3 4 5 6 7 8
4 Startup competitor ships 1.0

Market$Share$
1 2 3 4 5 6 7 8

Market$Share$
1 2 3 4 5 6 7 8
6 App development begins

Market$Share$
1 2 3 4 5 6 7 8

Market$Share$
1 2 3 4 5 6 7 8
8 Native app ships

Market$Share$
1 2 3 4 5 6 7 8
1 80% market share
2 “ We need a native mobile app.”
6 App development begins
8 Native app ships

12 months to write
speciﬁcation"
Market$Share$
3 6
3 App specification begins 6 App development begins

Market$Share$
6 8
6 App development begins 8 Native app ships
9 months to build app"

21 months to respond"Market$Share$
3
8
8 Native app ships

Market$Share$
5 8
12 months to forever
lose half the market share"

Gut wrenching

What’s
going on here?

Feasible
Will rapidly
change
markets

Connected tribes
https://www.flickr.com/photos/shankbone/6183443813

Time needed to reach:
Feasible
Desirable
and Viable

Some examples…

1984

2006

About 20 years

2001

5 years

2007

2010

3 years

2012

2 years

2008

4 years

“The Tesla Model S outscores every other car
in our test Ratings.” – Consumer Reports

1979

1989

10 years

2.5 years

1.5 years

1966

1998

About 30 years

2005

7 years

Time needed to
form a tribe
and spread the word

http://upload.wikimedia.org/wikipedia/commons/9/90/Ford_Pinto_runabout_(1).jpg

8 years

Market expectations
can change and
spread quickly

Do you have
the agility
to balance

operating the business
and
responding to change?

Why does this
feel unnatural?

“the greatest prosperity
can exist only when that
individual has reached
his highest state of
efficiency; that is, when
he is turning out his
largest daily output.”

Assumes:
Certainty is high
Goal:
Maximize individual
efficiency

100 years later

Status Quo
Budgets
Comprehensive
Analysis
Detailed
Plans
Waterfall
Execution

Works when:
Certainty is high

Is your business
getting
more certain?

Agile Execution
Lean Thinking

Balance
operation
and exploration

Assumes:
Uncertainty exists
Goal:
Maximize value
delivery

Adaptive
Steering
Disciplined
Exploration
Empirical
Learning
Adaptive
Execution

Step 0:

Step 0:
Replace Waterfall execution
with Agile execution

Product
Backlog
Iteration
2 Weeks
Daily
Meeting
Iteration
Backlog
Product
Increment
ITERATIONMECHANICS
Scrum
Scrum

FLOWMECHANICS
(all independent cadences)
Ready
queue
prioritize retrospectgroom release release
WIP
Target
Kanban
Kanban

Step 1:

Step 1:
Balance planning
with empirical learning

Typical approach

http://www.flickr.com/photos/isaacmao/380257543
Create a plan to
predict the future

Budget approval
Product definition
Product requirements
Detailed plan
Alpha release
Beta release
Final release
FIRST CONTACT WITH CU

Budget approval
Market research
Product definition
Product requirements
Detailed plan
Alpha release
Beta release
Final release

Budget approval
Market research
Project definition
Project requirements
Detailed plan
Alpha release
Beta release
Final release

Budget approval
Market research
Project definition
Detailed plan
Development
Final release

Budget approval
Market research
Project definition
Detailed plan
Development
Verification

Budget approval
Market research
Project definition
Detailed plan
Development
Verification
Final release

HOW MANY
GUESSES?

FIRST CONTACT
WITH USERS

http://www.flickr.com/photos/oregondot/4132135156

Obscure
the uncertainty
with details of a
false precision

Embrace, reveal
and mitigate
the uncertainty

Turn Uncertainty
Into Knowledge

http://www.flickr.com/photos/memekiller/4564410767

Business
Initiative

A s m t o sC n a N m : D t :
K y A s m t o
D p n e t A s m t o s
F l i e A s m t o s
O h r A s m t o sO h r A s m t o s
K y A s m t o
K y A s m t o
I- 1
R m n e s i l
h l i t g v r
W n w h n
g v n e e t
w l h p e
T x m s a e
a e a c p a l
r m n e s
S g e t o s
w l m t v t
g v r
R c p e t
w n g f s n
t m
W a i e
r a o a l
s g e t o s
W a e
r c i e
p e e e c
d t
W a e d
t m l e t
m s a e
P r n r a t
r f r a l a s
W a a e
m n y t r u h
p r n r
r f r a s
W a e
e o g p r e
i v n o y
O r l a s i l
b y g f s
F c b o d s
w l d i e
t affic
A m b l r t
p o u t
s r t g

Key assumptions
Knowledge

Run experiments

Frame

Build

Measure

Collect
http://www.flickr.com/photos/mrpetersononline/4977025601

Analyze

Organize

Learn

25%

25% 55%

Empirical Learning

Advice
from a master…

http://www.richard-feynman.net/gallery.htm

Step 2:

Step 2:
Balance analysis
with disciplined exploration

Magic box of innovation
https://www.flickr.com/photos/wonderlane/7923402476

Disciplined exploration

Form
We have a team with
strong conviction to make
the vision come alive

Form
The vision is big enough
it can change adjacent
products and markets

Form
We have support from the
company to pursue the
vision

We understand the
problem a customer
wants solved
Discover

Our product idea
solves the customer’s
problem
Discover

Our business model
can be profitable
Discover

Pivot
or Persevere?
Disciplined exploration

The founders can:
Understand the flow of
money and sell the offer
Validate

Our draft sales plan will
close or activate
customers
Validate

We understand our
go to market strategy
Validate

We have budget and
assembled a cross-
department transition team
Transition

Transition
Departments can take on
our new offer

We no longer need our
inventors on the team
Transition

Step 3:

Step 3:
Replace budget as strategy
with adaptive steering

Budget as strategy

“Plus or minus the
price of a
Hyundai, how much
will you make with
this spend next
year?”

Adaptive Steering

3 – 5 Year Vision

Possible futures

This year’s strategy

This year’s execution

Flow of information

Creating
space, safety, and
accountability
with horizons

Horizon budgeting

Today’s spend buys options on future
high growth offers with an expected
return in 36 to 72 months.
Horizon 3

Today’s spend fuels high growth
offers with an expected return
in 12 to 36 months.
Horizon 2

Today’s spend funds offers with a
predictable return within the current
budget cycle.
Horizon 1

Horizon allocation
70%20%10%

Goals, Metrics, and the Three Horizons
Different Metrics for Each Horizon
TIME FRAME
HORIZON 1
(0 - 12 mos)
HORIZON 2
(12 - 36 mos)
HORIZON 3
(36 - 72 mos)
Create a
Category
Maximize
Economic Returns
Become a
Going Concern
Driving
Goal
Key
Performance
Indicators
Revenue vs. plan
Bookings
Contribution margin
Market share
Wallet share
Target accts vs.
plan
Sales velocity
Deal size
Segment share
Time to tipping
point
Name-brand customers
Deal size
Name-brand partners
PR buzz
Flagship projects
“Opex” “Timex” “Capex”
Figure 2.6

One last thing to
keep in mind

Technology adoption
is a human
phenomenon

Need an Agile and
human centered
approach

Start with empathy

Balance operation
and exploration

Link strategy
and execution

LEARN MORE…
rallydev.com/els
rallydev.com/frame

AgileCamp 2014 Keynote: Extending Agility, Ryan Martens

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