The Shu Ha Ri of Scaling · The Shu Ha Ri of Scaling 30 Years of Large-Scale Agile Transitions ......

The Shu Ha Ri of Scaling 30 Years of Large-Scale Agile Transitions

Scrum Day Stuttgart May 2017

© 1993-2016 Jeff Sutherland & Scrum Inc.

“We want the True Scrum!” Akihito Fujii, GM Enterprise Product Management, KDDI

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Nonaka-san and Kenji Hiranabe


Excerpt: Scrum@Scale Guide

Why Scrum@Scale?

In 2006, Open View Venture Partners decided to use Scrum as a primary driver of value creation.

Scrum was implemented organization wide in the venture firm (Sutherland and Altman 2009) while

simultaneously deploying Scrum in portfolio companies. Four major rounds of funding are in

progress supporting over three dozen active portfolio companies at any one time.

The goal is to turn $1B into $10B using Scrum. To do that we needed to Innovate rapidly.

Scrum is first about innovation (Rigby, Sutherland et al. 2016), then about time to market,

then about driving sales that expand market share and increase valuation leading to an IPO

or sale of the venture company.

Our investors find it easy to double or triple velocity of teams within a few sprints by training both

developers and managers. Happy teams with strong management support for agility through

removing organizational waste is key. Then the hard work begins. Aligning senior management,

crafting a winning business strategy, properly doing market segmentation and defining a target, and

building a product owner organization that can execute effectively takes 80% of our investors time.

Within seven years we sold ExactTarget to Salesforce for $2.5B (Upbin 2013), our best

success to date. We think we can double our investment return with Scrum compared to

other venture funds.

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We Need to Grow Scrum in Four Dimensions

• Scale = number of coordinating teams; Complexity of projects

• Distribution = number of different coordinated geographic locations

• Saturation = Agile principles pervade the organization; Break down traditional “silos”

• Velocity = 10 teams going 5 times as fast is the same at 50 competitor teams and cost is 20% of the competition

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Distribution

Saturation

Scale

The fourth dimension is velocity

@

drivers of global innovation

Computing Communication Storage ContentX X X

Digital Power =

Growth Rate =

Doubles Every 18 months

Growth Rate =


Growth Rate =


Growth Rate = Not N

but 2N

2

An exponential rate of growth that reduces computing and communication costs 95-97% every ten years

@

Freedom 251 Launches $4 Smart Phone

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@

Agile, Lean, and Scrum drive the manufacturing revolution

Customers loved this…

…Until they tried this…

@

Lean, Scrum & Agile: What’s the connection?

Lean Scrum Agile

Inspired One Parent

1950’s 1990’s 2001

Implementation

2014


9

Case Studies

ScrumInc Transformations

@© 1993-2016 Jeff Sutherland & Scrum Inc.

Scrum Deployment Driven by Exponential technologies

1. Sensors - Internet of Things

2. Artificial Intelligence / Machine Learning

3. Robotics

4. Solar PV

5. Energy Storage

6. 3D Printing

7. 3D Visualization

8. Mobile Internet & Cloud

9. Big Data / Open Data

10. Aerial Vehicles / Nano Satellites

11. eMoney / eFinance


Case Study: GE Digital 2015

• $1B startup in Silicon Valley

• 1000 developers by 2015 >3B revenue

• 36000 developers in 2016

• 1917 GE moves corporate headquarters to Scrum technology area in Boston

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Revenue: $123.7BMarket Cap: $263.36B


Case Study: 3M

• Sales: $31 Billion

• R&D: $1.7 Billion

• Market Cap $113.52B

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We have seen some teams reach, we’ve been tracking the percent change, … 500 percent increase in velocity. Tammy Sparrow

Presented at Give Thanks for Scrum. Cambridge, Nov 2016


Scrum Feature Team

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• 3 -9 Members (ideal size = 4 or 5) • SM - Removes Impediments & Keeps Scrum True• PO - Team KSI & Translates Vision into Backlog• 3-5-3

SM PO

=Team

SMSM PO

• Transcendent Goals• Cross Functional -> Independent Path to Production • Self-Organizing/Self-Managing• Backlog Flows to Stable Teams• Accountable to PO

@

Descaling Case Study: SimpliVity


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Scaling the SMSM

SM SM SM SM SM

SM SM SM SM SM

SM SM SM SM SM


Scaled Scrum Level 1 - 5 Teams of 5 Scrum-of-Scrums

SOS

SM

SM

SM

SM

SM

• Scrum of Scrums Scales the SM • Surfaces & Removes Impediments• Mirrors Daily Scrum• Limits Communication Pathways• Achieves Communication Saturation• Cross-Team Coordination• Acts as Release Team

• Shippable increment every sprint


Scaled Scrum Level 2 - 25 Teams of 5 Scrum-of-Scrums-of Scrums

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• Scrum of Scrums of Scrums• Surfaces & Removes Impediments• Mirrors Daily Scrum• Limits Communication Pathways• Increases Communication Saturation• Cross-Team Coordination

SoSoS


Scaled Scrum Level 3 - 125 Teams of 5 Executive Action Team

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EAT

• EAT - Eats Impediments• Removes Impediments not handled

closer to the Team level• Mirrors Daily Scrum• Limits Communication Pathways

• (300 vs. 195,000)

• Increases Communication Saturation

• Cross-Team Coordination• 125 People Coordinate in 60 min.

SoSoS SoSoS SoSoS SoSoS SoSoS


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Scaling the POPO

PO PO PO PO PO

PO PO PO PO PO

PO PO PO PO PO


The Team PO Builds, Refines, Plans

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• PO - Sets Team Priorities• Servant Leader• 50% w/ Customer, 50% w/ Team• Single Backlog

• Stories • Epics

• What not How

Team

PO

SM


Meta Scrum at 1 Level Aligns, Refines, Plans

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• Sets Priorities for MultipleTeam• Mirrors Refinement and Planning• Single Backlog Pulled by Line POs

• Epics• Features

• Cross-Team Coordination & Alignment• Systems Thinking - Oversees the Whole• Level 3 PO = CPO

Meta ScrumCPO

PO

PO

PO

POPO


Meta Scrum at Level 2 Aligns, Decomposes, Refines

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• Sets Priorities for MultipleTeam• Mirrors Refinement and Planning• Single Backlog Pulled by Level 3 POs

• Features• Value Streams

• Cross-Team Coordination & Alignment• Systems Thinking - Oversees the Whole• Level 2PO = CCPO

Meta ScrumCCPO


Executive Meta Scrum Aligns and Sets Strategic Priorities for the Organization

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• Inhales Technical Priorities • Exhales Organizational Priorities • Mirrors Refinement & Planning

• Owns Organizational Vision• Lead by the Level 1 PO

• Servant Leader• CEO• SVP

• Single Backlog Pulled by Level 2 PO• Value Streams• Initiatives

• Sets Organizational Priorities

Executive Meta Scrum*


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True Scrum@

Large Scale


125 People Scaled

25

EMS

EAT

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO


250 People Scaled

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CCPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

CCPO

EAT

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

SoSSM

SM

SM

SM SM

PO

PO

PO

PO

PO

CPO

EMS

SoSoS SoSoS

Case Study: 3M-HIS

Executive Meta Scrum

CoP

QC's APO

Communities of Practice & Quality Circles Agile People Operations

(HR)

Knowledge Teams (on Teams) Infrastructure Teams (on Teams)

EAT

Customer Relations and Intelligence

CR

Meta Scrum

SoSoS

Meta Scrum

Meta Scrum

SoSoS

Meta Scrum

SoSoS

Meta Scrum

SoSoS

Meta Scrum

SoSoS

Meta Scrum

Meta Scrum

Meta Scrum

Meta Scrum


Case Study: SAAB Technologies Entire factory sychronized in 1 Hour!

Best product with 80% reduction in cost and time to market

• 8:30 Executive Action Team

• 8:15 Scrum of Scrum of Scrum of Scrums

• 8:00 Scrum of Scrum of Scrums

• 7:45 Scrum of Scrums

• 7:30 Daily Scrum

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Revenue: 27.19B SEKMarket Cap: 41.19B SEK


Case Study: Toyota USA 2017

• CSM and CSPO training for senior management

• Executive Action Team

• Agile Practice

• Executive MetaScrum

• Rank ordered all Toyota projects

• Some initial projects did better than 3 times the work in 1/3 the time

• Toyota Corporate Leadership committed to Scrum pilots in Nagoya

• Challenges

• Educating traditional waterfall management

• Dealing with 70% outsourced to waterfall29


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Mike Tromans, Engineering Manager, Digital Engineering, Toyota Production Engineering, 2017.


Scrum is KAIKAKU for TMNA

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Change Transform

Change Good


Case Study: BMW Revenue: 94.16B Euro Market Cap: 53.67B Euro

• All IT to Scrum immediately (>4000)

• No waterfall will be allowed

• Scrum will be pushed into manufacturing

• Move from 70% outsourced to 70% insourced

• Many experiments

• Advantages

• Senior team is Knowledgeable • Connected, electric, autonomous cars are upon us

• Extreme sense of urgency

• Culture of innovation

• Challenges • Connecting senior team vision with teams

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Scrum Training 17-21 July 2017 Tesla Factory

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Case Study: Maersk 2016 Revenue: $47.57B Market Cap: $243.50B

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Mr. Skou said costs in Maersk Line were at an all-time low, dropping for the first time below $2,000 per container. Maersk Oil has pushed down its break-even level to between $40 and $45 a barrel from around $50 to $55.


Money Ball

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The MoneyBall of Scrum

• 30% of staff have no clear priorities (GE better than average)

• 64% of features are never or rarely used (Standish Group)

• Average process efficiency is less than 15% (Mary and Tom

Poppendieck and Jeff Sutherland Lean Workshops MIT and Stockholm)

• (.70)(.36)(.15) = 3.8% company performance

• The good news about these horrifying averages is that increasing performance is easy!!!

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What if We Applied Scrum?

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3.8% to 17.1% = twice the work in half the time

• Cut useless work in half - Who is responsible for that?

(only 15% of organization does obviously useless work)

• Double value delivery - Who is responsible for that?

(only 33% of features delivered are rarely or ever used)

• Halve waste - Who is responsible for that?

(improve process efficiency 15% -> 30%)

Leadership

(85%)

* Product Owner

(67%)

* Scrum Master

(30%)

= 17.1% company performance


Moore’s Law Applied to Software

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Transistors on a Chip Stories in a Sprint

Beginne

Ready Ready

Continuous


Understanding Dual Operating Systems John P. Kotter. Accelerate: Building Strategic Agility for a Faster Moving World. HBR Press 2014.

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FrAgile - Shu State CEO does not have Agile Mindset

• Traditional management hierarchy creates project teams

• “Scaling frameworks” are often used to provide scaffolding for the

legacy organization until it can evolve

• This is a translation layer that protects the waterfall from

Agile and must ultimately be removed to get high

performance

• Usually get 20-30% improvement in production although

bureaucracy or changes in management often cripple and/or

destroy agile implementation

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Waterfall

Translation Layer

FrAgile


Only Restructing the Organization Can Deal With Organizational Debt

Agile Enterprise Metrics - 2015 48th Hawaii International Conference on System Sciences Daniel R Greening, Senex Rex

[email protected]

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mailto:[email protected]


Agile - Ha State CEO changes management roles

• Management coaches the teams to self-organize and self-manage. Managers become leaders.

• Teams self-form against a prioritized backlog to maximize production.

• Leaders create virtual teams that drive communities of practice across company.

• Leadership refactors the organization - target is minimum 200-400% increase in production and reduction in time to market

43S

us

tain

ab

le

Managers become leaders Teams self-manage


Anti-Fragile - Ri State The Leading Edge of Organizational Development

• Hierarchy still exists but becomes competency based and enabling

• Teams self-organize product direction and refactor the organization

• Leadership supports wherever their skills are needed

• Swarming makes organization stronger under stress and can generate 500-1000% increase in production

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Anti-fragile

Company is customer facingTeams drive strategy

@© 1993-2016 Jeff Sutherland & Scrum Inc.

Scrum is a productivity superweapon - it is shockingly efficient!Rick Horgan, Sr. Editor, Crown Business

The Shu Ha Ri of Scaling · The Shu Ha Ri of Scaling 30 Years of Large-Scale Agile Transitions ......

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