While Scrum has been proven to be effective for many organizations, the success of Agile implementation depends on various factors, and not all companies that adopt Agile practices may achieve the desired results. Jim Johnson, CEO of the Standish Group cites “Decision Latency” to be the main driver of the project’s success or failure. The greater the decision latency, the more the project is prone to failure.
These observations are based on a study made on thousands of Agile projects by the Standish group who have developed a methodical approach to gather information about the typical duration it takes for organizations to arrive at decisions based on data from their database. The results show that when decision latency is less than an hour, the success rate is 58%. If the average decision time is over 5 hours, the success rate falls to 18%.
According to Jim’s observation, six teams had to endure a six-week wait for executives to reach a verdict. “If we were to calculate this delay, our venture firm would arrive at a loss of $150K multiplied by six teams and six weeks, amounting to $5.4M. To mitigate such losses, our management team would convene at the earliest to deliberate on possible management changes.”
How can teams reduce decision latency?
Sutherland, Co-Creator of Scrum and Creator of Scrum@Scale notes
“Scrum helps reduce decision time by pushing development decisions to the team and all priority decisions to the Product Owner radically shortening decision time to an hour or less.”
It is, however, important to leverage an environment where teams are empowered and feel confident to take solid decisions on their own. Some of the important features of a self-governing team are as follows:
Everyone in the team should be on the same page
This is the utmost important feature of a self-sufficient, self-governing team. What this means is that everyone in the team from a junior resource up to the top executives should be seeing the same picture. This also means that the state of the Sprint or Release should be visible unambiguously to everyone. And that too, at all times, without any delays in creating visibility reports.
Ability to take decisions at the granular level
One of the major roadblocks for the Agile teams running the scrums in a traditional way is the lack of visibility and too much reliance on the statuses presented by the team members. More often than not, the accuracy of these statuses is compromised. A “Story” is regarded as a fundamental unit of deliverable work by a scrum team. Epics are generally what is meant to be delivered to the customers. A true picture of the state of all stories undertaken in a sprint is paramount for the team to be able to take decisions at the story level. With that level of information available, teams can take quick decisions at the story level and at the epic level.
Ability to predict the problems proactively
Outperforming teams are able to predict the problems and act proactively to curb the impact or take measures to put things back on track before they get worse. If the teams can accurately predict the amount of delay in their sprint commitments before it is too late, not only that they can take decisions to fix the underlying issues but also, they can bring the stakeholders on board and in turn can either set the expectations or run the negotiations accordingly.
While no one can deny the importance of having the ability to make decisions are the granular level and producing visibility in real-time. This is only possible with the help of good information systems. Integrating a well-automated system into the culture is becoming the need of the hour. No company can excel with the traditional manual methods. Investing in a good software system that can empower and enable the teams to take their decisions on their own is of paramount importance.
In conclusion, decision latency is a crucial driver of the success or failure of an Agile project. The Standish Group’s research on thousands of Agile projects shows that projects with decision latencies of less than an hour have a success rate of 58%, whereas those with average decision times of over 5 hours have a success rate of only 18%. To reduce decision latency, it is essential to empower self-sufficient teams that can make decisions at the granular level and predict problems proactively. This seems to be a far-fetched goal without embracing technology and investing in a good software system that can help to reduce decision latency and enable teams to make informed decisions quickly. By reducing decision latency, organizations can increase their chances of success in Agile project implementation.