Agile Development Blog

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.

The various sizes of and shapes of Ecospheres

As you may know, I am very passionate about the concepts of sustainability.  For my birthday this year, my thoughtful wife and son gave me a living example of sustainability that sits on my desk and reminds me to work on this topic everyday.  It is called an EcoSphere and I got it from EcoProducts Home Store here in Boulder (they are folks who also provide all of our compostables that help us approach zero waste here at Rally – they are a great Boulder success story).

The Ecosphere is a completely closed world and is self-sustainable. It was developed by two NASA scientists (the late Dr. Joe Hanson and the late Dr. Clair Folsome) trying to create models for long-term space flight.  In it you will find algae, shrimp and bacteria living in a closed cycle with sun light as energy. (Learn more about EcoSphere’s sustainable model on their site.)

At $125 for a small sphere they are a bit pricey, but they are fun to watch, people always notice the shrimp moving around on my desk.  After attending Thomas Friedman’s talk on “Hot, Flat and Crowded,” I realize they are just another part of my “work in progress” to living sustainably in the U.S.  These do not feed me like my chickens and goats, but they also do not eat like my dogs and cats.

Here is mine on my desk - cool eh?

Definitely the most common question is:  “Are those sea monkeys?“  According to the web site, they live 2 to 7 years with really no maintenance and NO they are not sea monkey branded brine shrimp.

This EcoSphere keeps me focused on the long road of continuous improvement needed to make our industry a zero carbon footprint or sustainable industry.  We are currently on the road to be a larger emitter of CO2 than the airline industry by 2020.

We have to find the innovations in infrastructure, the methods and tools to reverse this.  My of view of how to reverse this behavior is through the emerging software value cycle that is made possible by SaaS/Clouds, Agile development and Web 2.0 customer communities.  You can read my thoughts on these topics or hear a MassTech webinar.

I have about 15 of these guys in my Eco-sphere.

I believe that with the change to Lean thinking – from products to services and with virtual connections to customers – we can learn to quickly adapt and adopt to new sustainable products and behaviors.

We need a value chain in the IT industry that is closed loop and sustainable, not open loop like the Story of Stuff.

I encourage you to take a moment and consider getting one of these model worlds for yourself or your best friends.  It will keep you on the road to smarter, leaner and greener.

About the Author: Ryan Martens is an avid outdoorsman, founding board member of the EFCO, and Founder and CTO at Rally Software Development. Subscribe today to get free updates by email or RSS.

Further Reading:

• Let’s stop splitting hairs – We need to get to zero carbon output to really make a difference
• Leadership in Sustainability – Blog Talk Radio Interview

Just got off the phone with Dan Montgomery who interviewed me on his BlogTalkRadio channel on Sustainable Leadership.

Following the ‘More…’ link will show my notes and links from the 50-minute interview using the Decker Grid.

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