Could an Enterprise be a Republic?

The current year is a good example of circumstances in which agile practices are beneficial. Our world is volatile, uncertain, complex and ambiguous. The quantity and quality of customers’ purchases have varied greatly. Forecasts for the future are uncertain because the facts needed to make decisions are not known. The situation is so complex and new that our traditional ways of planning our activities are not possible.

Sitra has renewed its mega-trends for 2020. Population growth is declining. We are getting older. However, technological development continues to be strong. A long period of peace has enriched humanity. The result is a shortage of demand, as a large proportion of people already have almost everything necessary. Being overweight is a bigger problem than hunger.

As the economy changes, so does the world of work. Employment in a permanent employment relationship is declining because employers are no longer able to protect their employees from changes and fluctuations in customer purchases. We want to get rid of fixed costs, which increases the amount of variable costs. There will be outsourcing. Employment relationships become short-term, part-time and flexible. Businesses are looking for cheap labour and networking with other organizations.

We then end up in a situation where the leader has no subordinates but partners. New ways of leading are needed to lead equal partners.

Authoritarian leadership

Authoritarian leadership is a current reality in companies, at the state level, and in various other organizations. It has many different forms, but the hierarchical organizational structure is its most typical manifestation. In a class society, the king and the nobility have privileges in terms of both decision-making and income distribution. Corporate management, on the other hand, emphasizes its work to maximize shareholder value.

Centralized decision-making is at its best when quick and holistic decisions are needed. Warfare is an example of a situation where there is no time to discuss different decision options. However, a manager can become a bottleneck and the quality of decisions depends on the manager and the information available to him/her.

The execution of the leader’s orders is difficult without the involvement of subordinates. Compliance must be monitored. Rebels are punished and supporters are rewarded. Civil liberties such as freedom of expression and sources of livelihood are restricted. Media control and propaganda are management tools to stay in power, even as the number of lower-level leaders grows.

Ultimately, stifling citizen initiative and innovation will erode authoritarian societies. The palace revolution is a more likely option for them than a popular uprising.

In the corporate world, a subordinate is rewarded for obedience with pay, bonuses, employee benefits, and career advancement. Rebels and dangerous competitors, on the other hand, are fired or excluded from the networks.

Republic

The republic is a form of government that, throughout history, has proved to be a model in which nations have prospered with the ingenuity and entrepreneurship of large masses of people. Also on the business side, innovations largely take place in small business networks.

The republic is ruled by law, not by a ruler or a ruling elite. All people are born equal. The law is the same for everyone, and no one has privileges based on their identity. In the authoritarian model, typical ways to define a privileged class are descent, race, religion, language, gender, caste, age, party, and so on.

In the republics, decision-making is decentralized. Municipalities and provinces have self-government and decision-makers are fixed-term representatives of the people and elected by them. Major issues are decided by referendum. Organizations are low and decisions are made at the lowest possible level.

The constitutions of the republics define civil rights, which guarantee citizens e.g. the right to pursue a trade, to express one’s views and to be safe from unjustified arrests and penalties. They include safeguards to limit the potential for abuse of power.

As a consumer, a person makes his/her own purchasing decisions and companies adapt to consumer demand and its consequences.

An agile leader in a republican network?

So the world is changing as we get richer and get older. In a world of abundance, you don’t have to do everything yourself. For example, the music in Apple’s music store is not Apple’s own.

In the company, the manager finds that he/she no longer has subordinates, penalties and rewards. The people to whom he/she leads come from customers, several partners representing different suppliers and other stakeholders. There is no direct authority to command and influence must be earned. Still, together they form a team. Let’s think about leading a Utuber team.

It all starts with a change of attitude. The purpose of work, autonomy and self-development are of great importance to individuals. The team is based on trust, fairness, reciprocity, openness and respect. Our partners are professionals, not subcontractors or employees. They have other options.

Because our cooperation is based on the desire of equal partners to work together, we write cooperation agreements instead of an organizational chart. The Constitution of the Republic is equivalent to the shareholders’ agreement of the company’s founders. In projects, the participants have to get WIN-WIN-solution where each party’s responsibilities and rights are defined. The salary model is connected to the income stream received from the customer.

Of course, the agreement is only the starting point. An agile leader needs to be present, participate, listen, and serve his/her team. So what can he do for his team? Facilitation, counselling, mentoring, training and coaching are a key set of services, but on a case-by-case basis, there are a whole lot of more. Decisions are made by those who are best placed to do so. Openness, honesty, fairness and respect are crucial in interactions. The free rider problem will not be eliminated by mere agreements, despite security mechanisms. Everyone must grow in the responsibility and reciprocity required for cooperation.

Summary

The Republic model teaches companies how a large number of people can work effectively as a loosely networked community to solve complex, changing, and ambiguous problems. In addition to the laws, the parties need a strong belief that life can give more than a zero-sum game.

Critical Thinking

Agile thinking that is common in the IT industry is suitable for other areas of life as well. In this post, we apply it to current topics. By critical thinking we mean skepticism about using unverified assumptions in decision making.

Solving Complex Adaptive Problems

We use Scrum framework within which people can address complex adaptive problems,. Its core is empiricism that asserts that knowledge comes from experience and making decisions is based on what is known. It employs an iterative, incremental (repetitive and additive) approach to optimize predictability and control risk while productively and creatively delivering products of the highest possible value

In complex problems cause and effect relationships are difficult to observe. They are non-linear. For example the spread of a pandemic started exponentially and has a long tail towards zero. It has a  feedback loop where immune people do not spread the disease. Incubation period is an example of a time delay between the cause and effect.

In complex problems cause and effect relationships are difficult to observe. They are non-linear. For example the spread of a pandemic started exponentially and has a long tail towards zero. It has a  feedback loop where immune people do not spread the disease. Incubation period is an example of a time delay between the cause and effect.

To analyze a problem we identify the influencing factors. For example the spread of a virus depends on the virus itself and how people socially distance from each other. Fish-bone diagram can be used to describe the factors.

Causal loop diagram shows the influencing factors and their relationship.

 

Cause or Effect?

Vitamin D has been proposed as a solution but we are not sure whether the vitamin reduces viral infections or viruses consume vitamin resources or a person prone to infections also has limited vitamin reserves or some combination of these.

Just correlation of factors is not enough. We need to ensure the mechanism. We may have a mechanism but not the effect. Timing and dose has an impact on its effectiveness and adverse and side effects in humans. We can use calculations and computer models, test tube and laboratory tests, pathology and experiment with animals to fail faster.

Because causes have their own causes, we do root cause analysis to go deeper. 5 whys is a typical technique to find the factors that should be changed. For example we would like to know why some of the old people who had the virus died. Note that unambiguous, simple chain of causes and effects does not necessarily exist.

In wicked problems effect emerges from the collaboration of several influencing factors,  observations look chaotic and statistics do not show enduring correlations. You may find bounds within which the effect fluctuates. They are called (strange) attractors.

Scientific Method

Scientific Method is based on empiricism. Organizations thrive with the culture of experimentation.

Randomized double-blind study is the gold standard of empirical research. If we are developing a new drug we need to know whether the healing is due to the drug or something else. In a such study patients are randomly divided into two groups: 1. those who get the new medicine and the best treatment and 2. Those who are receiving placebo and the best treatment.

Results depend on the sample and patient selection. Because there is a chance of chance, studies have be repeatable. We need to create the research plan in advance and define success. Is it to be alive 5 years after the study, or 50 years or something else.

When we are designing complex products we need to have empirical evidence, facts , to support our assumptions the product can be built and that customers want to buy it. A/B-testing is widely used.

Cognitive Bias, Image Marketing

When we look at any information, thinking slow and analytically takes energy. We use intuition, the fast way instead[1].  Then we have deal with cognitive biases [2] and logical fallacies[3]. It is easiest to deceive oneself.

We believe that we know more than we really know. We believe in people like us. We advocate results that useful for us and confirm our assumption. It is easy to be right in hind-sight and think in a given context, inside the box.

Logic is difficult. So, we trust authorities and attack persons. Our chain of reasoning way is invalid, even circular. We generalize isolated cases. Falsifying our claims may be impossible. Our arguments may be contradictory which is called cognitive dissonance.

We need to use evidence based science instead of relying on image marketing. Image marketing appeals to emotions. It uses adjectives, especially fear, threat and danger. Your own product is combined with words perceived as positive and competing products with negative ones. The meaning of the words may be modified

You should be attentive when you see overwhelming number of repetitions and one-sidedness of the view. Everyone says that AI and  robotics are coming. You notice words of understatement like ‘predicts’ and ‘could’ in “Professor predicts 100M could die”.

Furthermore,  you see that title does not match content. It may be just a clickbait. Research and facts are missing. In the worst case there are no facts or facts do support the arguments or perception of the facts is exaggerated. Storm in a glass of water is reported as a global catastrophe.

Proceed Adaptively Step by Step

Because we do not know the outcome in agile uncertain world, we proceed step by step. We adapt after each step because, we cannot make a comprehensive plan. We are moving forward all the time. Error steps are possible and allowed.

Agile leaders are humble servants of others that catalyse the discovery of new problems and better solutions. Life in uncertainty is like life of a scientist and a gardener.

Agile leaders tolerate and appreciate different opinions. Fact-based solutions succeed and bad ideas fail quickly when we have freedom of science and free discussion & communication. Censorship is detrimental to creativity.

References

  1. Kahneman, Tversky: Thinking slow, thinking fast,

2. https://en.wikipedia.org/wiki/Cognitive_bias

Scrum Foundation Quiz

50 questions based on Scrum Foundation 2018 learning objectives.

Select the option that fits agile mindset the best.

Have fun.

Scrum Foundation Questions 1-10

Scrum Theory

Scrum Foundation Questions 11-20

Scrum Theory and Roles

Scrum Foundation Questions 21-30

Scrum Roles and Events

Scrum Foundation Questions 31-40

Scrum Events, first Artifact question.

Scrum Foundation Questions 41-50

Scrum Artifacts and their transparency

 

 

 

Business Case of Agility

Success stories and surveys support agile software development. In addition to anecdotal evidence there are little hard figures to guide our decision making. Here cumulative business value charts are used to describe the impact of agile and traditional choices to the bottom line. Focus is on visualizing the economic impact of individual agile practices and assumptions of their costs and profits.

A chart describing the cumulative earnings as a function of time is a basic tool for optimizing the return of investment, ROI. The line is higher all the time if we have multiple deliveries. It is still better if the more profitable increments are deployed the first. This advantage in time-to-market is clear also in the surveys. Double the results in half of the time assumes that earlier deliveries have business value and that the additional cost of more deliveries is small.

  • It is not trivial to find minimum viable products that create value especially when organizations do not improve their businesses continuously but use large projects with non-negotiable late deadlines. Waste of the inventory of the partially done software is not as visible as the waste of tangible inventories.
  • The cost of a delivery has been a show-stopper of agility. Business models were based on sales of new versions of software that were installed manually to each client computer. Each deployment package had to be tested and integrated manually. Without automation the costs can overcome the benefits of early deliveries.

The cost of change must be small if we proceed empirically and feedback directs our product and development process. Customers pay these changes when they create more value than the costs of delaying and implementing the the changes.

  • Extreme programming proposes a set of practices like test driven development, re-factoring and pair programming that change the cost curve, cost of change, such a way.
  • Waste of unnecessary features can be avoided by prioritizing product backlog items based on their business value and changing the order when appropriate.

Risks are an integral part of any design. In software development we do not commonly know what the users actually need and how we use  new technologies that create the results. The cone of uncertainty is high. Reports of more than hundred-fold effort differences are common. Sales, savings and profit estimates are so inaccurate that it is quite common to ignore them altogether.

  •  Whole investment is lost if  we do a wrong thing or fail in the implementation
  • Customers try to protect themselves by fixed price projects. Costs increase because vendors have to buffer their offers especially if penalties are used. Competitive bidding weight visible price or over quality and total cost of ownership. The bidding game sets customers and vendors against each other.
  • Incremental deliveries make risks visible and adaptation is easier.
  • Agile approach is a natural risk management system, but it often fails when appropriate action is not taken. Organization cultures must allow canceling and redirecting projects.
  • Queuing theory and theories of variation can lead to improved practices in handling unpredictable situations.

Traditional mass production uses specialized lowest costs work force, rigid processes and invests in tools. It locally optimizes the cost of the tasks that workers do and is often blind about the required administrative burden.

  • Cost of learning can be significant. It unavoidable when we do something new. Open workspaces, pair programming and shared responsibilities are agile practices that accelerate learning. It would be good if that could break Brook’s law.
  • Cost of teamwork is minimized in a cross-functional team in single location. Wastes of relearning, transfer of work, task switching and delays are minimized. Software development has dis-economics of scale because a lot of communication and coordination work is required.
  • Utilization rate of the specialist become easily low. To avoid that developers take part of multiple simultaneous projects which often leads to coordination chaos.
  • Cost of motivation is difficult to estimate but essential part of working life. Leadership style has an impact on the engagement of team members which may result in more value for the business.
  • Traditional big front end design tries to minimize the cost of rework but real life shows that a large amount of work is needed to correct the bugs, integrate the components and deliver what users actually need.

Traditional and agile approaches have different assumptions of the relative costs of the parts of software development. Agile assumes high risks, high integration and collaboration needs, low predictability and low cost of change.

Example Driven Development

Example driven development is the best name to cover acceptance test driven development, behavior driven development and specification by example approaches. The concepts of acceptance test, testing and a tester have been defined long ago. I have found that changing their meaning is difficult. Even when we talk about test driven development we have to spend a lot of effort to explain that it is not done after programming and not by the separate testers.The same happens if we talk about specifications.

The old school uses user stories as a new way of writing specifications, which could be then send to a separate development team. Collaborative design is not happening as it should. Though I like the idea of programming with natural languages, I think that they are too abstract and too prone to interpretations. Examples are a good way to explain things unambiguously and in a way that both the users and programmers see useful.

Behavior is something that programmers talk about, but for users that might not be as clear as examples. With example driven development I want to emphasize collaborative design where users and developers work together using examples to clarify how users interact with computer programs to achieve business benefits that pay the return on investment.

Traditionally we have specifications, tests and code written to different purposes. They should not just be consistent but the same. In agile tests are specifications and in behavior driven development code is moving closer to the tests. The ultimate goal might be that we have only one description of the program that can be understood by both the users and the compilers. That is one goal of visual programming.

The lack of programmers has been tried to be solved by moving the work to users. This approach has not been very successful because building large programs requires a lot of logical thinking and solutions to huge amounts of details. Software designers are not endangered species but programmers might be if the abstraction level of programming goes up.

Another book list

In this list I have a lean and management focus:

Hope, Jeremy: “Beyond Budgeting: How Managers Can Break Free from the Annual Performance Trap”.

Denning, Stephen: “The Leader’s Guide to Storytelling: Mastering the Art and Discipline of Business Narrative (J-B US non-Franchise Leadership)”.

Denning, Stephen: “Radical Management”.

Reinertsen, Donald G.: “The Principles of Product Development Flow: Second Generation Lean Product Development”.

Reinertsen, Donald G.: “Managing the Design Factory: A Product Developers Tool Kit”.

Goldratt, Eliyahu M.: “Theory of Constraints”.

Ries, Eric: “The Lean Startup: How Constant Innovation Creates Radically Successful Businesses”.

Gojko Adzic: “Specification by Example: How Successful Teams Deliver the Right Software”.

Fowler, Martin:”Domain Specific Languages (Addison-Wesley Signature)”.

 

Reality over the Plan

Big front-end designs are bad, because they do not match the reality. The devils are really in the details. However, the cost of changes is considered too high and the illusion of predictability makes us close our eyes on reality.

In Scrum we say that we should focus on infrastructure and architecture in the first Sprints. Decisions about our software development environment, tools and architectures are not easily reversible. The situation is much worse in the construction business. If we are building a bridge or a tower of Eiffel we can’t start it again from the beginning if the base is not strong enough.

The case is not that bad in software development. We use software instead of electronic circuits just because it is easier to change software than hardware.We need to have appropriate engineering practices to change Kent Beck’s famous cost curve. Extreme programming contains many practices that are needed to make the code easy to change. In addition to these we need solid architectural principles and rigorous attitude to quality.PowerPoint architectures outlined at the first Sprints are not good enough. We need executable architectures and extensive testing with highest priory business functionality to make sure that the quality attributes, non-functional requirements, are OK, before we continue deeper.We don’t stop to that. We require that the architectures are easy to change. Ease of refactoring and testing can be achieved with known design patterns.

My colleague has written a provocative blog entry about the current situation of agility.Actually, we are promoting our new course: Agile Engineering Practices, which can be used as a part of Certified Scrum Developer curriculum.

Visual software design with themes and epics

My talk in Scum Gathering Amsterdam is now visible. See more about visual software design with themes and epics The place: 10:00 – 11:00am on Tuesday, November 16 in Foyer

Synopsis: We have issues like user stories, themes, epics, UI mockups, business rules and acceptance tests that are used in creating our understanding of what to do and how. We groom product backlogs and have Sprint planning meetings and design tasks in Sprint backlogs. This IdeaCamp session pursues to tell us how to put these all together in real life projects.

The slides and result flip charts are now available at SlideShare. I like especially the idea of drawing users’ value stream with epics shown by one of the groups in the idea camp.

New lean and agile books

I bought some lean&agile  books to read during my summer holiday. The list is not complete because I have already read quite many of them. I got Mike Cohn’s new Scrum book freely from the publisher. Thanks about that.

Craig Larman: “Scaling Lean and Agile Development: Thinking and Organizational Tools for Large-Scale Scrum: Successful Large, Multisite and Offshore Products with Large-scale Scrum (Agile Software Development)”.

Lisa Crispin: “Agile Testing: A Practical Guide for Testers and Agile Teams (Addison-Wesley Signature)”.

Mary Poppendieck: “Leading Lean Software Development: Results are Not the Point (Addison-Wesley Signature)”

Roman Pichler: “Agile Product Management with Scrum: Creating Products That Customers Love (Addison-Wesley Signature)”.

Lyssa Adkins: “Coaching Agile Teams: A Companion for ScrumMasters, Agile Coaches, and Project Managers in Transition (Addison-Wesley Signature Series (Cohn))”.

David J Anderson: “Kanban”.

Jason Fried: “ReWork: Change the Way You Work Forever”.

James Coplien: “Lean Architecture: for Agile Software Development”.

Daniel H. Pink: “Drive: The Surprising Truth About What Motivates Us”.

Chip Heath: “Switch: How to Change Things When Change is Hard”.