Sunday, November 1, 2015

Judging Scrum

Judging Monkey

Scrum is supposed to be simple. by Scrum creators Jeff Sutherland and Ken Ken Schwaber attempts to define Scrum less than 60 words:

“Scrum is a management and control process that cuts through complexity to focus on building software that meets business needs. Management and teams are able to get their hands around the requirements and technologies, never let go, and deliver working software, incrementally and empirically.
Scrum itself is a simple framework for effective team collaboration on complex software projects. ”

How simple is Scrum, really?

Scrum, as a management framework, is a practical approach to solving the Agency problem. Agency problems are pervasive in modern economies due to the extensive division of labour and specialization.[1]

The problem of agency was first laid out in 1970s[2], noticing the essential imperfection of agency relationships: people (agents) hired to tend to interests of others (principals) actually behave in their own best interests. Economic and institutional approaches to principal-agency problem look at incentive and punishment schemes and various management issues that arise when trying to bring agents’ behavior closer to what the principals would prefer.

Organizations that engage in software development and IT projects almost always involve a group of people concerned with the final product (principals), and a different group of people (agents) tasked with creating that product. The problem of agency is fairly easy to see in this setting: the interests of the business are not identical to interests of the creators of the product. There are different ideas about what the principals group wants and expects the creators to do, but all agree that interests and behavior of the agents group are never perfectly aligned with principals’ group desires.

Scrum is one of many systems designed to address the agency problem in the commercial software development and IT space. History and current state of management science and business practices show that the problem of agency continues to lack a perfect solution. Among many systems designed to align behavior of principals and agents in a given business situation, most only achieve a partial solution, and some are unreasonably costly. Like other systems, Scrum may be helpful in achieving a better alignment between principals and agents. Scrum can also turn out to be costly, depending on implementation.

Scrum targets to improve communication between the two groups, with the idea that better communication will allow for greater transparency and trust. Scrum provides fairly detailed rules for communication structure for the two groups, and instructions for both the principals and the agents how to set and sustain this structure. This generally works, although trust is not a guarantee. However, communication is costly, and is subject to diminishing returns, i.e. more is not always better.

In addition to the prescribed communication structure, Scrum dictates limited autonomy and accountability for the agents group, and institutes measures to maintain its own framework. These changes are also costly, and run contrary to common organizational structures, thus making them complex to implement. Even worse, the benefits, although sometimes great, may not be easy to quantify, and are very hard to measure.

While the rules of Scrum appear to be simplistic, the overall system is quite complex, with ambitious goals and significant overhead. Scrum affects operation of both principals and agents, steering emotions on both sides. It effectively introduces a brand-new principal-agent contract, with differently defined roles and responsibilities, and new assumptions about each groups’ motivation.

Overall, Scrum is an imperfect approach to a very hard problem – one of many imperfect approaches. There is no known solution as of yet, and it is quite possible that such a solution does not exist at all. When considering Scrum against other less-than-perfect attempts to align behavior between principals and agents, it appears that Scrum does a pretty good job delivering on its goals. Yet, it is far from simple.