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# @ScrumRio 2015 - Agile: The Power of I(n)teration

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Agile: The Power of I(n)teration

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### @ScrumRio 2015 - Agile: The Power of I(n)teration

1. 1. Agile The Power Of I(n)teration ScrumRio 2015 xekin.org
3. 3. Agenda Money1 2 3 4 Field Power Lessons 5 Value
4. 4. Money 1 ...the root of all Evil.
5. 5. I have always been afraid of banks. Andrew Jackson
6. 6. John, money and his father
7. 7. John, money and his father When John turned 25 his father gave him \$30,000. His Dad taught him that money makes money. And advised John to build his retirement.
8. 8. “How much will I have in 40 years?”
10. 10. “It depends!”
11. 11. Money Variables Interest Rate Years of Investment
12. 12. 403020100 211,200 97,861 30,000 Risk Product Interest rate Multiplier Low Pension fund 3% / year 3,3x Medium Indexed deposit 5% / year 7,0x High Mutual fund 7% / year 15,0x 449,234
13. 13. Compound Interest
14. 14. Compound Interest Always reinvest every cent you earn! A small rate increase makes a huge difference! The more you compound, the more you gain!
15. 15. Exponential growth, on a steady pace!
16. 16. Compound Interest 𝑨 = 𝑷 × ( 𝟏 + 𝒓 𝒏 ) 𝒏𝒕 A = Amount accumulated after t periods P = Principal amount (initial investment) r = Nominal Interest rate (%) within period t t = Number of periods to compound n = Number of compoundings per period t
17. 17. Compound Interest 𝑨 = 𝑷 × ( 𝟏 + 𝒓 ) 𝒕 Simplified (n=1) A = Amount accumulated after t periods P = Principal amount (initial investment) r = Nominal Interest rate (%) within period t t = Number of periods to compound
18. 18. But, wait a minute...
19. 19. Compound Interest and Scrum? Is there a relationship? Are we in the business of making money? 
20. 20. We will get there... Hopefully.
21. 21. Field 2 Experiment. Fail. Learn. Repeat.
22. 22. I am not afraid of storms for I am learning how to sail my ship. Louisa May Alcott
23. 23. Our story.
24. 24. It all started back in 2010 Startup of 4 Developers... 2 experienced Waterfall geeks joined! Early investors proposed...
25. 25. It all started back in 2010 “Let’s do Scrum!” And so we started our journey!
26. 26. Round #1
27. 27. Round #1 We were smartasses, hence need no help… Translating… no time for learning! Too much to do  After “deeply” study it, our verdict was…
28. 28. Round #1 “Scrum is very simple!” We ended up with…
29. 29. Anarchic Scrum Act… without thinking. Sense… without data. Respond… without awareness.
30. 30. Anarchic Scrum We rock it  But someone else didn’t…
31. 31. Round #2
32. 32. Round #2 “This is too much turbulent.” “We need some top management skills.” And a budget was given…
33. 33. Round #2 “Let’s buy Scrum!” We ended up with…
34. 34. ScrumFall A very modern way of water-falling… In a 3 week (kind of) steady pace… With a new set of tools to pressure people…
35. 35. ScrumFall Management prioritization Resource planning Estimations as commitments Sprint, sprint, sprint ... Additional Testing Detached Delivery Fixed scopes Handovers Big Design Up Front And lots of meetings!Comparing velocity between teams Fixed deadlines
36. 36. ScrumFall “What the Hell?” We started our “dynamic duo”!
37. 37. Round #3
38. 38. Round #3 “Nuno, something is wrong!” “Bruno, you sound like La Palice!” We begun to look behind the curtain…
39. 39. Round #3 “Let’s go deeper!” And we made a new friend!
40. 40. Scrum Manifesto Flows XP Practices Pull vs Push Kaizen Systems Constraints Complexity People Kanban Hyper Productivity Science of Teams Scrum Patterns Lean Thinking Agile Transformation Culture
41. 41. Let the experiments begin.
42. 42. Outcomes: Shared common goals. Boost on all communication levels. From a group of individuals to a Team. #1 1 Week Sprints
43. 43. Outcomes: Emergence on solutions. Boost team morale and confidence. Excellence on engineering practices. Dramatically improve client’s trust. #2 Working Software Mindset
44. 44. Outcomes: Increase client’s engagement. Amplify Learning & See the Whole. Improve all communication channels. Learn from the client, “fast & furious”. #3 Scrum On a Lean Client
45. 45. Outcomes: Boost on team morale! Clarity on team capacity! Development steady pace regained. #4 Pulling The Sprint
46. 46. Doug Larson The trouble with learning from experience is that you never graduate.
47. 47. Power 3 You have to learn the rules of the Game.
48. 48. Any fool can know. The point is to understand. Albert Einstein
49. 49. Scrum origins.
50. 50. Toyota True Mission Develop People First …and only then, Products. How did they get here?
51. 51. Toyota... Post-World War II
52. 52. Post-World War II... 1949-1950 Low Japanese purchasing power. Therefore, low sales and production. Company's financial situation deteriorated. And, on top of it… massive strikes!
53. 53. Post-World War II... 1949-1950 Toyota Bankruptcy… Almost 
54. 54. Banks’ bailout conditions Sales independent from manufacturing. Elimination of "excess manpower“, aka, layoff: 2,146 workers & managers left! Founder Kiichiro Toyoda resigned!
55. 55. Toyota... Post-Layoff
56. 56. Toyota Post-Layoff Almost no managers? Wait a minute... No thinkers? Are you for real?
57. 57. Toyota Post-Layoff Only workers? Well no, we will have something different! All workers must be thinkers!
58. 58. How?
59. 59. What to do? Frederick Taylor Scientific Management Multi- specialization Taiichi Ohno Just-in-Time Autonomation W. E. Deming PDCA Systems Thinking
60. 60. The birth of Lean
61. 61. Toyota Production System... Lean LEAN TPS Scientific Management Multi-Specialization Just-in-Time Autonomation PDCA Systems Thinking
62. 62. Toyota breakthroughs
63. 63. Toyota breakthroughs From Push to Pull production. From Mass (Ford) to Lean production. From Workers & Thinkers to Thinkers only! From a Resources to a Systems Management. From disruptive Innovation to Continuous Improvement.
64. 64. Again... Toyota True Mission
65. 65. Toyota True Mission Develop People First …and only then, Products. Did you get it?
66. 66. Now that we know a little better, do we fully understand it? “Any fool can know. The point is to understand.” Albert Einstein
67. 67. Lean understanding
68. 68. One Thinker = One PDCA D P C A 0 1 2 3 T1 T2 T3 T4 Standard 1 Thinker Standard 1 Thinker Mechanics
69. 69. Two Thinkers = Two PDCAs D P C A D P C A 0 1 2 3 0 2 4 6 T1 T2 T3 T4 Standard 1 Thinker Standard 2 Thinkers Mechanics
70. 70. N Thinkers = N PDCAs D P C A D P C A D P C A D P C A D P C A D P C A D P C A 0 1 2 3 0 2 4 6 0 7 14 21 T1 T2 T3 T4 Standard 1 Thinker Standard 2 Thinkers Standard N Thinkers Mechanics
71. 71. N Thinkers = N PDCAs D P C A D P C AD P C A D P C A D P C A D P C A D P C AD P C AD P C A D P C AD P C AD P C A D P C A Organizational View
72. 72. Only top hierarchy are Thinkers and so competent to develop Product (N-Workers) Thinkers = (N-Workers) PDCAs Organizational Blockage D P C AD P C A D P C A D P C A Workers in production line to execute only!
73. 73. Blockages?
74. 74. Embrace the change
75. 75. Thinkers versus Workers? Organizational blockages? Toyota’s employees did not fall into this cultural trap! After all, they all are Thinkers! And with discipline and resilience from their Culture… They embraced the change! Embrace the change
76. 76. PDCA compound effect
77. 77. After 60 years of learning... ...and literally, gazillions of PDCA’s after... PDCA compound effect 0 1 2 3 0 2 4 6 0 7 14 21 T1 T2 T3 T4 Standard 1 Thinker Standard 2 Thinkers Standard N Thinkers
78. 78. On Toyota: From bankruptcy to world’s 1st automaker From 11,706 (1950) to 10,117,274 (2013) vehicles/year From bankruptcy to world’s 11th company by revenue From bankruptcy to world’s most profitable automaker PDCA compound effect
79. 79. In Japan: From defeat & destruction to a postwar miracle From bankruptcy to world’s 2nd developed economy From bankruptcy to world’s 3rd economy by nominal GDP PDCA compound effect
80. 80. From Lean to Scrum
81. 81. From Lean to Scrum 1986 – ‘The New New Product Development Game’ paper. Japan’s emergent study on Product Development: Type C – Overlapping Phases of Development Also referred as “Moving the Scrum Downfield”.
82. 82. From Lean to Scrum 1993 – First Scrum Experiments (Sutherland, Schwaber). 1995 – ‘Scrum Software Development Process’ paper, by Sutherland and Schwaber 2001 – Manifesto for Agile Software Development
83. 83. From Lean to Scrum D P C A Lean Plan Do Check Act Scrum Planning Sprint R2 = Review & Retrospective Emerge into Backlog S P E R2 S P R E R
84. 84. N Thinkers = N PDCAs D P C A D P C AD P C A D P C A D P C A D P C A D P C AD P C AD P C A D P C AD P C AD P C A D P C A Organizational View
85. 85. N Thinkers + X Scrum Teams = N + X PDCAs D P C AD P C A D P C A D P C A S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R Organizational View
86. 86. N Thinkers - X Scrum Teams = N - X PDCAs Scrum Teams as Workers in production line to execute only blocking Emergence D P C AD P C A D P C A D P C A S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R Organizational Blockage
87. 87. Project Driven Thinkers = 0 PDCAs = 0 Learning Scrum Teams as Workers in production line to execute projects iteractively. S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R S P R E R Design Plan Execute Design Plan Execute Design Plan Execute Design Plan Execute Organizational Blockage
88. 88. Thinking People Developing PDCA’s over Time To Build Value The Lesson
89. 89. Does our Lesson fit into Agile Values? How about Agile?
90. 90. How about Agile? Customer Collaboration Working Software Individuals & Interactions Responding to Change Agile Values
91. 91. Let’s do a simple exercise: Map the Agile Values to core Compound Concepts! How about Agile?
92. 92. Interaction, Iteration & Agile Values Interaction Driven Customer Collqboration Individuals & Interactions Iteration Driven Working Software Responding to Change
93. 93. Thinking People Interacting through Iterations To Build Value The Power
94. 94. Lessons 4 Sometimes we win, sometimes we learn.
95. 95. The only source of knowledge is experience. Albert Einstein
96. 96. Outcomes: Shared common goals. Boost on all communication levels. From a group of individuals to a Team. #1 1 Week Sprints Lessons: Leads to false felling of delivering value. Iteration is nothing without Interaction.
97. 97. Outcomes: Emergence on solutions. Boost team morale and confidence. Excellence on engineering practices. Dramatically improve client’s trust. #2 Working Software Mindset Lessons: Working Software is not always what user values the most. Value capitalization impacts tremendously on compound effect.
98. 98. Outcomes: Increase client’s engagement. Amplify Learning & See the Whole. Improve all communication channels. Learn from the client, “fast & furious”. #3 Scrum On a Lean Client Lessons: Customer Collaboration has huge compound value. It is easy to slow down iteration pace, hence, a balance must be pursued.
99. 99. Outcomes: Boost on team morale! Clarity on team capacity! Development steady pace regained. #4 Pulling The Sprint Lessons: Overflow blocks Iteration. Overflow blocks Interaction. Overflow blocks everything. Seeing the flow is amazing!
100. 100. Value 5 Money flows in the direction of Value.
101. 101. Price is what you pay. Value is what you get. Warren Buffet
102. 102. Money and Value
103. 103. Money and Value Money ≠ Value Value can be expressed by: Business Key Performance Indicators (KPIs) Customer relationship metrics (NPS, engagement, …) Other metrics… happiness metric ?
104. 104. Compound Interest & Scrum?
105. 105. Compound Interest and Scrum? Is there a relationship? Are we in the business of making money? 
106. 106. Compound Knowledge and Scrum?
107. 107. Compound Knowledge 𝑨 = 𝑷 × ( 𝟏 + 𝒓 ) 𝒕 Simplified (n=1) A = Future Value accumulated after t sprints P = Present Value (of the product/process) r = Nominal Improvement rate (%) t = Number of sprints to compound
108. 108. Compound Knowledge Does it make sense to you?
109. 109. Going back to Lean and Scrum
110. 110. Going back to Lean & Scrum D P C A S P R E R Lean (PDCA) Done by Quality Circles Focus on Efficiency Decrease Cost! ↑ Cycles ≫ ↓ Cost Scrum (PSR2 E) Done by Scrum Teams Focus on Effectiveness Deliver Value! ↑ Cycles ≫ ↑ Value
111. 111. Going back to Lean & Scrum Lean Scrum Main Goal Reduce Cost Deliver Value Focus On Efficiency Effectiveness Teams: QC Circles Scrum Teams Cycle: PDCA Sprint (PSE2 E) Deliverables: Process Improvements Product Increments
112. 112. Going back to Lean & Scrum Lean & Scrum are made by Thinkers! PDCAs and Sprints are empirical iteration processes! Learn by doing! And only by learning a lot… …your organizational knowledge is increased!
113. 113. Going back to Lean & Scrum Both Lean & Scrum have deliverables! And only by delivering your process/product is improved! You can deliver with an high or low frequency! You can also deliver high our low value improvements! This is what we call the Improvement rate (per delivery).
114. 114. Going back to Lean & Scrum The Improvement rate is, therefore, a function of: Team’s iteration (learning) cycle, the shorter the better. Team’s delivery (compounding) cycle, the shorter the better. Team’s interaction frequency & quality with the customer. Team’s (compounded) knowledge over time 
115. 115. Compound interest is the 8th wonder of the world. Albert Einstein
116. 116. A Simple Example
117. 117. A Simple Example Your 2 ecommerce sites’ monthly sales are \$30,000/site. You want to improve it  You assemble 2 Scrum Teams, 1 per site… … and gave them a KPI to improve over 40 weeks: Gross Transaction Value (GTV)
118. 118. A Simple Example Team A decides: Iteration cycle = 2 weeks Delivery cycle = once every iteration
119. 119. A Simple Example Team B decides: Iteration cycle = 1 week Delivery cycle = once every iteration
120. 120. 403020100 211,200 30,000 Team Improvement rate Delivery cycle Multiplier A 5% / deliverable 1 every 2 weeks 2,7x B 5% / deliverable 1 every 1 week 7,0x 79,599
121. 121. Summing up Our experiments on the field, highlighted these 2 properties of an Agile Ecosystem, hence, no matter what you do or how you do it, just: Iterate & Interact to unleash… The Power of I(n)teration
122. 122. Our great references 
123. 123. Our great references  Hirotaka Takeuchi & Ikujiro Nonaka: https://hbr.org/1986/01/the-new-new-product-development-game Jeff Sutherland & Ken Schwaber: http://navegapolis.net/files/Scrum_Development_Process.pdf Kiro Harada: http://www.slideshare.net/kiroh/tps-lean-and-agile-brief-history-and-future Filipe Correia: http://www.slideshare.net/fcorreia/evolving-software
124. 124. THANK YOU! Share if you liked this deck! xekin.org