Agile Development Blog

Six weeks ago, I turned off the the Rally Software hose of work, and turned on a 24 hour by 7 day per week fire-hose called the Unreasonable Institute 2011. Now I am back to tell about the sabbatical that I introduced to this blog back in June.

Fellow on stage at The Unreasonable Climax - George Bernard Shaw looking on

I am NOT leaving Rally to start a social venture, though many people asked me that question over the last six weeks. Instead, I am investing with other Rally employees at creating a social enterprise inside of Rally.

Wow – that was fantastic experience with 26 entrepreneurs from 11 countries who all have the potential to change the lives of 1 million or more people.  There was so much energy at that place, I did not get recharged; I got energized. I was brought into a great family and I feel great about helping on so many levels, but I do not long for the lonely start-up days again. Given the success we have all had at Rally and the culture for give-back and entrepreneurship, I feel like I/we will have a huge impact on the world by intrapreneuring on the Rally Foundation.

What most people do not realize is that the Unreasonable Institute was the perfect place to incubate our new social venture, the Rally Foundation.  The Rally Foundation is our own social venture that we are developing to help social enterprises around the world use agility to amplify their impact. My sabbatical just put more fuel behind that fire and taking time to talk again with Suzanne DiBianca from the Salesforce Foundation and Brian Breckenridge from LinkedIn really stoked the fire with successful social enterprise case studies.

By immersing myself into the world of the Unreasonable Institute, I was able to gain empathy for these social entrepreneurs, engineers and funders. As such, I created an empathy map to help understand and share the pains and true needs of these organizations. With these early hunches articulated, our Foundation team is now running the customer development process to help us make this initial launch of the foundation very successful.

Now I was not just on a research mission to help our Foundation; I was there primarily to mentor the 2011 Fellows and to help them create successful social ventures. I was also a member of “the team” of the Unreasonable Institute as a recitation leader. No matter which these perspectives you look at, the sabbatical was a huge bonfire of success.

Mentoring fellows

As a mentor, I focused my attention on teaching the Steve Blank’s tools of customer development and the Burt Decker techniques of public speaking. On the first Tuesday of the Institute, Ben Carey and I taught a morning session focused on customer development and business model generation. In the afternoon, we did 1:1 sessions with fellows on their models. That satisfied most people’s needs, except for Anne at Afroes.  I had the good fortune to work with Anne for the next four weeks on the shape of her business model and canvas.  The business model canvas and the basic four steps of customer development allowed these fellows to tease apart their businesses and tell a story using very simple business language. As I wrote in the Unreasonable Blog, most of these business models are very complicated by multiple customer segments, value propositions and revenue/impact drivers. Before these models, it was very hard for these entrepreneurs to tell simple stories about their ventures.

The first pass at a business model canvas by one fellow

As the pressure built on the fellows toward their funding trip to San Francisco, I got more and more requests for presentation feedback and coaching.  I turned to my Decker training and grid to help these folks. With the help of another mentor, we focused the grid by locking in the three points on:

1. 50,000 feet to tell the story of problem/solution
2. 30,000 feet to tell the story of product/market fit
3. 3 feet to tell the managerial economics story of why the venture works and scales

As some of the 20 Rallyers who attended community pitches and the Unreasonable Climax, they could see the Decker grids emerging. I used my Ipad to film and review pitches 1:1 with the fellows. It was a powerful and rapid feedback cycle. It was not the 9 video sessions I did at Decker training, but it was fast learning.

Running a recitation

As a member of the 2^nd-year Unreasonable team with Daniel, Teju, Tyler, Ceasar, Megah and Lindsey, I was just a part-timer.  My title was Entrepreneur in Residence (EIR), and I ran a recitation and facilitate the final group retrospective. I did not live next door to the mansion or run the 24X7 full emersion like this team. I lived four miles away with my family, and friends. My role as a member of the team was to run one of the five weekly recitation groups – mine included Maria, Cynthia, Luis, Jamie and Myskin.

The recitation process was new this year and worked well, but not great. Given the fully packed schedule of the Institute, the opportunity to take meetings while in the US, and the fact that most of these entrepreneurs were still running ventures; it was hard to keep the rhythm of Saturday recitations from 3:30 to 6:30 PM. I tried to structure our group around the highly successful Entrepreneur’s Organizations forum groups. These peer-to-peer forums allow young leaders to get coaching and mentoring from their peers. Because we could not hold the meeting times, the forum structure did not hold either.  However, given the 24X7 live-in format of the Unreasonable Institute, there was no shortage of peer support. This group formed into a family very quickly. We saw birthday parties, engagement parties, family picnics, late-night club dancing and some very sad good-byes. I enjoyed our recitation. It got me a closer look at the real lives of these young social entrepreneurs.  As I am not much of an executer, I believe we could have done better and that other groups were more successful in this structure.

Researching problems for our Foundation

Though I stopped my flow of work, I did not stop my flow of non-profit work. As the Institute ran, I continued to run the Entrepreneurs Foundation of Colorado and be an active member of the Rally Foundation team. I even had both these teams meet at the Unreasonable Mansion to help experience the place and people up close, including the lack of air conditioning. After Ben and I did the customer development class, I became convinced that our Foundation team needed to follow that model too. As part of my time at the Unreasonable Institute, our team did interviews with the Salesforce.com Foundation, Linked-In Foundation, Unicef, IDEO.org, Engineers without Borders and Engineering for Developing Communities as well as a number of the fellows. It was a target-rich environment and we sized the moment to kick-off our problem/solution discovery process.

I am very happy with the time I gave to the Unreasonable Institute this summer. I would encourage other Rally sabbatical takers to follow a similar approach and get into the context of their future while on sabbatical. I was able to give, learn and grow by jumping in with this very unique situation. As a result, I helped build the wave of momentum behind the launch of the Rally Foundation – our social enterprise.

Finally, I am wrote this on a plane headed toward Tofino BC, Canada for a real vacation.  My sabbatical was not what most people think of as a break. It was a fantastic opportunity afforded me by 7 fun years at Rally; but I did catch Coho salmon and surf Canada on a real vacation.   I hope everyone is having a great time at Agile 2011 with the illustrations and the great announcements this week on Kanban, reporting, idea management and portfolio management partners.

If you want more details on the Unreasonable Institute, the fellows or my blow-by-blow account, you can:

• Enjoy the twitter stream for #unreasonable2011,
• See the chatter on the Unreasonable Facebook site
• Watch the first three Unreasonable.TV episodes for 2011; or
• Read my three blog posts on the Unreasonable Blog.

Ryan Martens is CTO/Founder of Rally Software, a recovering Entrepreneur-in-Residence at the Unreasonable Institute and chief promoter of the Entrepreneurs Foundation of Colorado, you can follow him on Twitter @RallyOn

Congratulations to the Rocky Mountain Microfinance Institute on their recent 2 year birthday and on a very successful quarter including a $92,000 Technical Assistance Grant from the Community Development Financial Institution Fund (CDFI). That grant and others will assist in building their capacity and efforts toward being certified as a CDFI. The CDFI focuses on enabling ”financial institutions to provide credit, capital, and financial services to underserved populations and communities in the United States.”

Rally is proud to be a 2010 partner with RMMFI as part of our ’1%Fund’ program which encourages employees to spend 1% of their paid time volunteering. In 2009 this program led to the contribution of over 2,300 volunteer hours. As part of an effort to increase our skill-based volunteering during 2010, Rally recently collaborated with RMMFI on a non-profit Salesforce.com Foundation implementation of Salesforce.com.

Rally’s Matt Harutun from customer support led this initiative after learning about the RMMFI team’s desire to integrate Salesforce.com into their business. Matt’s reflections on this partnership underscore the value of shared vision and continuous collaboration in creating a successful outcome.

I started the project, having enough knowledge of the Salesforce.com to be dangerous. I eagerly jumped at the opportunity to partner with RMMFI and help them deploy Salesforce.com successfully in their organization. There were many keys to making this venture successful, one of the key drivers, though, was having a shared vision of the world made that made for an easy introductory conversation.

A quick glance at RMMFI’s site tells you three things: the team is focused on learning, lending and coaching. Right away, we saw two areas of shared vision: learning and coaching.  Part of what I love and enjoy about Rally is our commitment to being thought leaders in our space as well as challenging ourselves with new and innovative ideas.  This translated well to RMMFI’s goal of teaching their clients about transforming dreams into a business plan. Similarly, both groups valued learning which provided both parties the ability to teach one another and also share and adapt ideas. During our project kickoff, we were fortunate to have the talented Rachel Weston, Rally’s Director of Services, facilitate this meeting. The RMMFI team was so enamored with the way she facilitated the kickoff that they took more notes on the Scrum process than the actual project! The RMMFI team takes a systems based approach to helping their clients improve their businesses – akin to what our Professional Services team does when they are engaged – drive client success through business transformation.

Another interesting outcome was RMMFI’s willingness to adopt Agile principles into their business. Not only were flip charts and Post-It notes a fun way to collaborate, but using key Agile principles like constantly prioritizing the team’s backlog and teaching their clients to focus on the highest priority items in their businesses helped increase visibility into the work being done and also opened new avenues for knowledge transfer. As a shameless plug, the project was run in an Agile fashion which was a very effective way to get RMMFI’s data model up and running quickly.  

Finally, the team was also fortunate to have Rally’s own Salesforce.com Administrator, Rich McGuire, volunteer some of his time to guide the team through the Salesforce.com cloud. His expertise at the keyboard and affable personality quickly made him a team favorite. All this combined with his leadership in the local Salesforce.com User Group, we were able to continue the development effort by leveraging the development community at large who were also excited about the opportunity to pitch in.

At the outset of any projects, there are countless roadblocks, impediments and challenges that can derail any effort. Having good team chemistry through similar beliefs, actions and values – while not a surefire recipe for success – certainly helps pave the road to success.

Find a partner:

Finally, you should know this project involved partnership with other firms to get this done. Aptly nicknamed Michael “S’ Force, from Salesforce.com in Denver, has been a critical resource to help RMMFI all the way to the finish line. In addition, the folks from Application Experts, other Salesforce.com partners and members of the Entrepreneurs’ Foundation of Colorado are moving in to help RMMFI operate, scale and maintain the Salesforce solution beyond launch. You know, it really does take a community to make these things work. Thank you everyone for your help.

The partnership with RMMFI is a great example of Rally’s move toward skill-based volunteering as part of our larger social mission that includes the forming Rally Foundation and our recent certification as a B Corporation. As an Entrepreneur Foundation company in Colorado, we use many of the resources available from the Entrepreneur’s Foundation to help us build a great corporate social responsibility program. In addition, the folks at Intersector Partners, were invaluable in helping us set-up a great working relationship with this young and amazingly effective non-profit.

Have you thought about your own social mission and the steps you’re taking to move that mission forward? One great way to build momentum is to seek out partnerships that provide opportunities and rewards for all involved. We are reaping those rewards in skills development, recruiting great folks and building intrinsic motivations through working towards a purpose. 2010 has been a stepping stone year and we are now primed for another big step in 2011.

Is corporate social responsibility something you care about? How are you making this a strategic part of your business?

Ryan Martens is an Epic Pass holder for 2010, Executive Director for the Entrepreneurs Foundation of Colorado and CTO at Rally Software Development.

As part of our goal to have a zero carbon footprint by 2020, we calculate our total carbon footprint each year including building facilities, travel, commuting, IT and waste.  As we get more accurate every year, we are adding in the impact of using Software-as-a-Service (SaaS) to that calculation. I have been unable to find a benchmark of other SaaS companies carbon footprints, so I am putting out a call for SaaS companies to share their footprint per user.

Rally’s benchmark – 8 tons of CO2 per year for every 100 users

At Rally, we have been growing steadily (227% in 2005-2007, 242% in 2007-2009) at the same time working hard to limit our carbon footprint.  Unfortunately, as a company grows, its carbon footprint often grows with it.

We have been able to keep carbon per 100 users flat at 8 tons per year for the last two years – the same amount produced by a single person flying from New York to Deli, India round trip 4 times. In addition, we estimate that our SaaS customers are avoiding an additional 1 ton per year of CO2 as compared to running an application in a robust manner in their own data center.

What is your SaaS carbon footprint per 100 users?

Lacking any other information, I used our figure – 8 tons per 100 users per year – to calculate our carbon use per 100 SaaS seats for each of our SaaS suppliers including: Google Enterprise Apps, Salesforce Unlimited, NetSuite, Big Machines, Eloqua, Xactly, and Open Air.  I assume our numbers are conservative because we are not the scale of the Google or Salesforce, and we count airline miles and employee commute in our footprint.  Can any other SaaS providers tell me your carbon per 100 users to increase the accuracy of our calculations?

Like Salesforce, we buy renewable energy credits from NativeEnergy to offset the carbon of hosted operations.  This is a very small portion of our overall carbon footprint -  about 7 tons per quarter.  However, it does a couple of things for us: 1) It supports our SaaS service being carbon neutral since 2008,  2) It keeps us learning about carbon credits at a national and local level, and 3) most importantly, it keeps us focused on our goal of zero carbon by 2020.

Do you want to partner?

In addition to our efforts to battle climate change in our industry, we are also working hard in social responsibility by following the 1% model started by Marc Benioff and Suzanne DiBianca at SalesforceFoundation.org.  Last year, we hit our 1% target of volunteer time with over 2,500 hours helping 90 charities.  This year, we are in search for a strategic non-profit partner to help us focus our corporate social responsibility efforts and volunteer time in one of three areas:

1. Reducing the environmental burden from the IT industry (carbon, e-waste, toxins, take-back efforts)
2. Decreasing the digital divide in society (universal access to the Internet)
3. Increasing the level and engagement in corporate social responsibility behaviors

If your non-profit believes it can leverage the 3000+ volunteer hours from a company in Colorado, North Carolina and the UK to help on one of these efforts, please contact us.  We are looking for a true partner who wants to start developing a relationship in 2009.

The importance of sustainability at Rally

Our efforts are based on trying to stand on the shoulders of Ray Anderson from Interface. See Ray’s Fortune interview on pushing through on sustainability in light of the current economic crisis that is radically affecting his commercial carpet business.  Since then, Google’s efforts and Salesforce’s efforts in the SaaS IT space have kept us moving forward.

We look forward to driving zero footprint data centers, increasing remote collaboration technology and having a zero footprint campus in the next decade. We are preparing a sustainability report for 2008, following the Global Reporting Initiative format.  It is not a small project, but it was the clear next step for our sustainability efforts that started in earnest in 2007.  Our goal is to release it by July 1st so stay tuned.

ADDED After Publishing and based on comments:

A better video of Ray Anderson is his speech at TED in 2009, it gives more background, and more data.  – Thanks to David Koontz

Graphic below to provide clear breakdown on sources of Carbon in our business – 6/17/09

Original F4 Technologies logo 2002-2004

I know what you are thinking with the title of this post – I am drinking the Kool-Aid. Just bear with me  for a minute. Back in 2002, when I started working on Rally, it was originally known as F4 Technologies. It was known as F4 because I did not want to work on anything that did not have the potential impact of a Factor of Four, for example a 4X increase in productivity or effectiveness.   There are two reasons for this:

1. Andrew MacAfee and John Gourville at HBS have shown that you need a 9X improvement with a new tool, technique or method to un-seed the incumbent.
2. According to Paul Hawken in Natural Capitalism, we need a 4X productivity increase in the use of natural resources to get to a sustainable place with the current population in the world.  Chapter 7 of that book helped form the core purpose and mantra of Rally – “Muda, Service and Flow.”

Now seven years into Rally, we have the proof that teams – including large and distributed teams – can be 4 to 10X more productive by following Lean principles and effectively implementing Agile development.  Like the story of “Good to Great”  from Jim Collins, you can’t leap here, but you can put yourself on that path by adopting a continuous improvement approach like Agile.  If you do that, you can be a “great” software development organization that dominates your market and is 10X better than the good ones.  Great organizations that dominate in their industry also have the knowledge and resources to change world, a la Google.org, the Salesforce.com Foundation and or through my favorite the Entrepreneur’s Foundation.

My summary take-away from Good to Great is:

“Right people building the right things right”

“Disciplined people, Disciplined thought, Disciplined culture “

If you are working toward this, I believe you increase your business value by 4 to 10 times.  I am going to make the case with the help of ROI models from David Anderson.  (BTW, I love his book – it does a great job explaining the simple physics of Agile.)

From Chapter 2 - David Anderson's "Agile Management for Software Engineering"

This is a very simple model of software process.  David shows more complex ones that model all the loop backs of large shipping software, but let’s work with this one.  So, the rough equations to calculate the business benefit of the process are the following:

Net Profit = Throughput – Operating Expense 
ROI = Net Profit / Investment

In the following four pages, I am going to look at how this equation plays out for four different scenarios:

1. Good waterfall team, on the mean line of the QSMA Agile Impact Report
2. Beginning Agile team in Flow benefiting from the 25% productivity savings of an Agile teams in the same study
3. Intermediate Agile team in Pull with incremental releases of value
4. Advanced team in Innovate that cuts time-to-market in 1/2 to end early after delivering 50% of the work but 80%the value

What you will see in this hypothetical modeling exercise is the true power of Agile to dramatically impact the software development teams in the organization. For a deeper understanding of what I mean by Flow, Pull and Innovate, please Jean and I’s white paper on moving to Program Pull.

Here is the summary:

1. Good waterfall team – ROI – 0.8
2. Beginning Agile team in Flow  – ROI – 1.4 (1.6 factor better than good waterfall team)
3. Intermediate Agile team in Pull  – ROI – 2.6 (3.2 factor better than good waterfall team)
4. Advanced Agile team in Innovate  – ROI – 6.3 (7.7 factor better than good waterfall team)

Factor or Four or better – that is why there is such a rush towards Agile development.  Of course, you can’t have your cake and  eat it too.  Moving up this maturity curve takes long-term dedication to increasing discipline and agility across the entire organization, but there are dramatic benefits if you can get on the continuous improvement path and stay there.