More Praise for Scrum: The Art of Doing Twice the Work in Half the Time “This extraordinary book shows a new way to simplify your life and work, increase your focus, and get more done in less time than you ever thought possible.” —Brian Tracy, bestselling author of Eat That Frog! and Time Power “Groundbreaking … Will upend people’s assumptions about how productive they can actually be.… Jeff Sutherland discloses to the non-tech world the elegantly simple process that programmers and web developers have been using since he invented Scrum, showing how a small, empowered, and dedicated team can deliver significantly higher quality work at a faster pace through introspection, iteration, and adaptation.” —Michael Mangi, senior VP of interactive technology, Social@Ogilvy “Jeff Sutherland has written the essence of Scrum for the masses. This book elevates Scrum from a fix-it tool to a way of life.” —Hirotaka Takeuchi, professor of management practice, Harvard Business School “Jeff Sutherland is the master of creating high-performing teams. The subtitle of this book understates Scrum’s impact. If you don’t get three times the results in one-third the time, you aren’t doing it right!” —Scott Maxwell, founder and senior managing director, OpenView Venture Partners “Jeff Sutherland used the common-sense but seldom-applied principles of the quality movement, user-centered design, and lean development to come up with a process that dramatically increases productivity while reducing employees’ frustrations with the typical corporate nonsense. This book is the best description I’ve seen of how this process can work across many industries.” —Jeffrey Pfeffer, professor, Stanford Business School and co-author of The Knowing-Doing Gap “Sutherland’s secret to surmounting professional and personal obstacles is approaching tasks with deliberate attention and a resilient mindset. This book will change the way you do everything. Even better, it will help you feel good in the process. Just read it, and get more done.” —Arnold V. Strong, CEO of BrightNeighbor.com, and colonel, US Army Reserve “This deceptively simple system is the most powerful way I’ve seen to improve the effectiveness of any team.” —Leo Babauta, creator of Zen Habits Copyright © 2014 by Jeff Sutherland and Scrum, Inc. All rights reserved. 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ISBN 978-0-385-34645-0 eBook ISBN 978-0-385-34646-7 Jacket design by Justin Thomas Kay Photograph on this page © Willy Wijnands First Edition v3.1 CONTENTS Cover Title Page Copyright Preface Chapter One: The Way the World Works Is Broken Chapter Two: The Origins of Scrum Chapter Three: Teams Chapter Four: Time Chapter Five: Waste Is a Crime Chapter Six: Plan Reality, Not Fantasy Chapter Seven: Happiness Chapter Eight: Priorities Chapter Nine: Change the World Acknowledgments Appendix: Implementing Scrum—How to Begin Notes Index Preface Why Scrum? I first created Scrum, with Ken Schwaber, twenty years ago, as a faster, more reliable, more effective way to create software in the tech industry. Up to that point— and even as late as 2005—most software development projects were created using the Waterfall method, where a project was completed in distinct stages and moved step by step toward ultimate release to consumers or software users. The process was slow, unpredictable, and often never resulted in a product that people wanted or would pay to buy. Delays of months or even years were endemic to the process. The early step- by-step plans, laid out in comforting detail in Gantt charts, reassured management that we were in control of the development process—but almost without fail, we would fall quickly behind schedule and disastrously over budget. To overcome those faults, in 1993 I invented a new way of doing things: Scrum. It is a radical change from the prescriptive, top-down project management methodologies of the past. Scrum, instead, is akin to evolutionary, adaptive, and self- correcting systems. Since its inception, the Scrum framework has become the way the tech industry creates new software and products. But while Scrum has become famously successful in managing software and hardware projects in Silicon Valley, it remains relatively unknown in general business practice. And that is why I wrote Scrum: to reveal and explain the Scrum management system to businesses outside the world of technology. In the book I talk about the origins of Scrum in the Toyota Production System and the OODA loop of combat aviation. I discuss how we organize projects around small teams—and why that is such an effective way to work. I explain how we prioritize projects, how we set up one-week to one-month “sprints” to gain momentum and hold everyone on the team accountable, how we conduct brief daily stand-ups to keep tabs on what has been done and on the challenges that have inevitably cropped up. And how Scrum incorporates the concepts of continuous improvement and minimum viable products to get immediate feedback from consumers, rather than waiting until a project is finished. As you’ll see in the pages that follow, we’ve used Scrum to build everything from affordable 100-mile-per- gallon cars to bringing the FBI database systems into the twenty-first century. Read on. I think you’ll see how Scrum can help transform how your company works, creates, plans, and thinks. I firmly believe that Scrum can help to revolutionize how business works in virtually every industry, just as it has revolutionized innovation and speed to market at a dazzling array of new companies and a breathtaking range of new products emerging out of Silicon Valley and the world of technology. —Jeff Sutherland, PhD CHAPTER ONE The Way the World Works Is Broken Jeff Johnson was pretty sure it wasn’t going to be a good day. On March 3, 2010, the Federal Bureau of Investigation killed its biggest and most ambitious modernization project—the one that was supposed to prevent another 9/11 but that had devolved into one of the biggest software debacles of all time. For more than a decade the FBI had been trying to update its computer system, and it looked as if they would fail. Again. And now it was his baby. He’d shown up at the FBI seven months earlier, lured there by the new Chief Information Officer, Chad Fulgham, whom he’d worked with at Lehman Brothers. Jeff was Assistant Director of the IT Engineering Division. He had an office on the top floor of the J. Edgar Hoover Building in downtown Washington, D.C. It was a big office. It even had a view of the Washington Monument. Little did Jeff know he’d end up in a windowless cinder-block office in the basement for much of the next two years, trying to fix something that everyone believed to be unfixable. “It was not an easy decision,” Jeff says. He and his boss had decided to declare defeat and kill a program that had already taken nearly a decade and cost hundreds of millions of dollars. By that point, it made more sense to bring the project in-house and do it themselves. “But it needed to be done and done well.” The project was the long-awaited computer system that would bring the FBI into the modern age. In 2010—the era of Facebook, Twitter, Amazon, and Google—the FBI was still filing most of its reports on paper. The system the Bureau used was called the Automated Case Support system. It ran on gigantic mainframe computers that had been state of the art sometime in the eighties. Many special agents didn’t even use it. It was just too cumbersome and too slow in an era of terror attacks and swift- moving criminals. When an FBI agent wanted to do something—anything, really—from paying an informant to pursuing a terrorist to filing a report on a bank robber, the process wasn’t that different from what it had been thirty years earlier. Johnson describes it this way: “You would write up a document in a word processor and print out three copies. One would be sent up the approval chain. One would be stored locally in case that one got lost. And with the third you’d take a red pen—I’m not kidding, a red pen—and circle the key words for input into the database. You’d index your own report.” When a request was approved, that paper copy would drift down from upstairs with a number on it. A number written on a piece of paper is how the FBI kept track of all its case files. This method was so antiquated and porous that it was blamed in part for the Bureau’s failure to “connect the dots” that showed various Al Qaeda activists entering the country in the weeks and months before 9/11. One office was suspicious of one person. Another wondered why so many suspicious foreigners were getting flight training. Another had someone on a watch list but never told anyone else. No one in the Bureau ever put it all together. The 9/11 Commission drilled down after the attack and tried to discover the core reason it was allowed to happen. Analysts, said the Commission, couldn’t get access to the very information they were supposed to analyze. “The poor state of the FBI’s information systems,” reads the report, “meant that such access depended in large part on an analyst’s personal relationships with individuals in the operational units or squads where the information resided.” Before 9/11, the FBI had never completed an assessment of the overall terrorism threat to the United States. There were a lot of reasons for this, from focus on career advancement to a lack of information sharing. But the report singled out lack of technological sophistication as perhaps the key reason the Bureau failed so dramatically in the days leading up to 9/11. “The FBI’s information systems were woefully inadequate,” the Commission’s report concludes. “The FBI lacked the ability to know what it knew: there was no effective mechanism for capturing or sharing its institutional knowledge.” When senators started asking the Bureau some uncomfortable questions, the FBI basically said, “Don’t worry, we have a modernization plan already in the works.” The plan was called the Virtual Case File (VCF) system, and it was supposed to change everything. Not letting any crisis go to waste, officials said they only needed another $70 million on top of the $100 million already budgeted for the plan. If you go back and read press reports on VCF at the time, you’ll notice that the words revolutionary and transformation are used liberally. Three years later, the program was killed. It didn’t work. Not even a little bit. The FBI had spent $170 million in taxpayer money to buy a computer system that would never be used—not a single line of code, or application, or mouse click. The whole thing was an unmitigated disaster. And this wasn’t simply IBM or Microsoft making a mistake. People’s lives were, quite literally, on the line. As Senator Patrick Leahy of Vermont, then the ranking Democrat on the Senate Judiciary Committee, told the Washington Post at the time: We had information that could have stopped 9/11. It was sitting there and was not acted upon.… I haven’t seen them correct the problems.… We might be in the 22nd century before we get the 21st-century technology.1 It is rather telling that many of the people who were at the FBI when the Virtual Case File disaster happened aren’t there anymore. In 2005 the FBI announced a new program, Sentinel. This time it would work. This time they’d put in the right safeguards, the right budget procedures, the right controls. They’d learned their lesson. The price tag? A mere $451 million. And it would be fully operational by 2009. What could possibly go wrong? In March of 2010 the answer landed on Jeff Johnson’s desk. Lockheed Martin, the contractor hired to make the Sentinel system, had already spent $405 million. They’d developed only half of the project, and it was already a year late. An independent analysis estimated it would take another six to eight years to finish the project, and the taxpayers would have to throw in at least another $350 million. Finding some way around that was Johnson’s problem. What went wrong and how the situation got fixed are why I’m writing this book. It wasn’t that these weren’t smart people. It wasn’t that the Bureau didn’t have the right personnel in place, or even the right technology. It wasn’t about a work ethic or the right supply of competitive juices. It was because of the way people were working. The way most people work. The way we all think work has to be done, because that’s the way we were taught to do it. When you hear what happened, it sounds at first as if it makes sense: the people at Lockheed sat down before they bid on the contract, looked at the requirements, and started planning how to build a system that would do all that. They had lots of intelligent people working for months, figuring out what needed to be done. Then they spent more months planning how to do it. They produced beautiful charts with everything that needed to be accomplished and the time it would take to complete each and every task. Then, with careful color selection, they showed each piece of the project cascading down to the next like a waterfall.