Agility is Inefficient • Klaus Bucka-Lassen • GOTO 2021

[Music] thanks to the organization the organizers of the gotopia here um and letting me do the closing keynote today quite delighted to be able to do that thanks very much for that and um yeah let's kick it off so you should all be able to see the screen now um while waiting for for this to load now just kidding of course i was wondering like who of you has read this book and i'll put the title in here as well on the slide who's read that book and before you raise your hand let me stop you right there that book doesn't exist of course right like the book the art of delivering the wrong product four times as fast that product that book doesn't exist i haven't written it yet anyway so could you get your cfo to buy that buy that book for the entire company and distribute it for christmas would he buy a book that says the art of delivering the wrong product four times as fast probably not i'd probably be be a pretty hard sell is that worth anything if you could deliver some of the wrong product or potentially wrong product four times as fast it would actually because it would give you four attempts for the same price so the likelihood that you have a successful product even if it's just pure luck if you end up with a successful product then the likelihood is four times as high if you can do it here with uh four times as fast another pro is of course that you can learn after each of those products and maybe that has an impact on the next well you probably recognize the book anyway and the real title of course is this right the art of doing twice the work and half the time it's jeff sutherland's main scrum book where he describes like how he kind of came about with the scrum over many years and what articles he wrote and uh read and and uh how he came about with scrum yeah um so what i'm criticizing is the title of that book not the content the book is actually the content is quite good i recommend you to to read it it's actually great i will go as far as saying saying it's great so go ahead and read it if you haven't read it yet but i do criticize the title and the title i don't really like because it talks only to efficiency it talks not to effectiveness and that's what we're going to talk about in this in the next 45 minutes mainly about the difference between efficiency and effectiveness and what the consequence is if you focus on efficiency okay so to me that's a warning sign um if people just talk about efficiency however could you get your cfo to buy this book and distribute it in the company you probably could he would probably be happy to hand that out over christmas because if everybody comes or comes back after new year's and works twice as hard and when it does twice as much work in half the time he'd be happy so we'll come back to that later so from a marketing point of view that is a really great title and maybe it is the right title after all because it does sell the book and if people read the book they leave smarter and understand a little bit more about agility so before i continue a few words about myself my name is klaus pukalas and i'm originally danish i live and operate out of zurich in switzerland companies that i'm associated and work closely with scrumming flores and the swiss area leaders in my own company argos of course these are like is a short list of companies that i have worked for or currently work for you see there's lego and jagermeister i can highly recommend to work for jagermeister especially the evenings are quite fun there i have to say yeah and then that's what i do besides being speaker at the various agile conferences i'm an agile trainer coaching consultant i've done that for the past 11 years and it is also important to stress here that i do work closely with jeff i've done more than 20 co-trainings with him i worked closely with the scrum inc as well have a good working relationship with him i consider jeffy and a friend so again it's just the title and i've had discussions with jeff about the title of that book it actually is mentioned in the scrum and scale guide as well and i got a change there to delivering twice the value in half the time which is i think a better better title but this talk is about agility is inefficient and i do admit that is a little bit of a clickbait as i wrote in the description as well for this talk because it does seem to work people will join for those of you who have joined to hear some scrum bashing and agile bashing here sorry to disappoint that's not what i will be doing i like i said i've been an agile host for a coach for 11 years and i'll probably continue to be doing that for for quite a while and i love scrum so what's the goal of this talk then is to provoke a conscious discussion on pros and cons of agility because there's no such thing as a free lunch and the price if you want to become agile is that you to some extent any um are willing to give up on efficiency and we'll talk about that and then i also want to give you some a few tools uh or warning signs i i call them i'll come towards the end of the talk i give you four warning signs to enable you or support or help you in detecting what i like to call fake agility so agility for the wrong reasons okay so to be able to do that we need to talk about these two words effectiveness and efficiency and we need to define them so that's what i'm going to spend the next 10 minutes on effectiveness is doing the right things many of you will have probably heard that before efficiency is about doing things right and in scrum we actually have and a role for each of that right we have the scrum master who is about efficiency and this product owner who is about effectiveness and doing the right things he's ordering the product backlog thereby having the right order in well the right order but a good order in which uh to do things when we look at it from the customer point of view efficiency does not have a lot to do with the customer it's about looking inwards defining and optimizing existing processes automate things that's what we mean about efficiency and with effectiveness we're so looking outwards we're observing the market pivoting innovating etc so you could also say like efficiency is the how how we do things the process and effectiveness is the what what we do okay so if we have efficiency and effectiveness then we could combine those two and talk about success if you have let's say we have a tire factory that's producing 10 000 tires a day if they manage to go from 10 000 to 11 000 tires a day without increasing input then they've improved efficiency by 10 if nobody's buying those tires those 11 000 tires unless we sell them at a heavy discount then they have a low effectiveness because people are not interested in that product it's not superior or it has a flaw or whatever it doesn't solve a problem for them the other way around if you have a tire factory that produces three tires a day people are standing in line in front of the factory and whenever a tire leaves the factory they're basically having a fight over who gets their tire they're willing to pay high premium prices for those tires it's kind of like an apple store when a new iphone comes out okay when we have that situation they have high effectiveness but with three tires a day is probably low efficiency depends on their competitors of course but three tires a day is probably not a tire factor you would also buy for a long time so both are important that's what i'm trying to say efficiency and effectiveness are both important so what you would like to do is doing the the right things right and i'll call that success and then that means efficiency times effectiveness and it's not plus because if it was plus then we could just focus on one and ignore the other we need to address both of those we want an efficient operation but and i think more importantly an effective operation in the sense that we want to build products that people want to buy peter drucker agrees with me he says in one of his quotes it's more important to do the right things than doing things right let's look at this what strategy to choose say you're in this corner down here your organization is low effectiveness and low efficiency so you'll probably die unless you're in a monopoly and nobody you're not competing with anybody we know lots of companies that are down here that are in a monopoly right but if you're not in that luxury situation then you need to move out of here and of course you want to end up here the question is like what strategy are you choosing are you focusing on effectiveness first or efficiency first right and i know the smart guys in here they will go like ah we'll go directly we'll do an arrow here and go directly to the green area yeah that would be nice and we we know that is quite successful right doing everything at the same time that was sarcasm danny sarcasm by the way for those that didn't get it we want to focus on one thing first and then do that and then focus on the other thing we don't want to do two things at the same time so where do we want to go first well peter drucker has also a saying this there's nothing quite so useless as doing with great efficiency something that shouldn't have been done at all so that would be if we have something that is low effectiveness nobody wants this product or very few people want this product and we are working on like producing that product cheaper then we would die slowly so that doesn't sound like a good strategy dying slowly might actually be more painful than dying quickly so let's go over here and i will call that survive so we have a product and we're building like that maybe nobody wants and we're going towards a product that people want and we're selling that at a premium because we're still not very efficient at building that product so it'll probably be expensive i see tesla's strategy to be pretty much this like a tesla model s and model x are 100 000 plus dollars or in that ballpark anyway and that's what they started to sell other companies would go like nobody will buy your car if you if you are charging a hundred thousand for it but they found a product that a certain market share a certain certain people are willing to pay a heavy premium for so they went this way and then once you're here you can work on your efficiency that's also what tesla is doing the day these days and we're gonna get back to tesla later see an example on on tesla later and yeah if you choose this path there is a chance that you'll land up here in the upper right green corner where it says flourish steven r kovi has another way of saying this the strategy what comes first he you might have heard this one as well before if the ladder is not leaning against the right wall every step we take just gets us the wrong place faster i think there's a quite neat picture as well to have in your in in your head if you think about efficiency and effectiveness so what good is it if the ladder leans up against the wrong wall and that's of course out of his book the seven habits of highly effective people it doesn't say efficient people so effectiveness first and one last picture that i want to talk to is this one here where we have mr effectiveness and efficiency sitting comfortably here at the top of the boat and mr efficiency he says faster and what does mister effectiveness shout he says pluck the hole now is it always effectiveness first no and this picture can can explain that if it takes them 15 minutes to find the hole and find something to pluck with they've probably sunk so there is probably a situation there will be situations where this actually for the short term anyway is a strategy you need to choose so it's not a recipe you can take home and say like oh it's always effectiveness first and then we're going to look at efficiency second you still have to apply common sense which is not so common according to voltaire but you have to apply common sense still and figure out in your context what is first generally if you don't have a product that people are willing to pay for there's no real good reason to make it more efficient in producing that product okay so let's look at four examples this one like if we had feedback from the audience i would wait for somebody to tell me what that is everybody in the u.s will probably recognize this quickly by that logo here that's been taken down already it's of course a blockbuster store it's one that's closed obviously it doesn't say blockbuster anymore they took everything down there's no cars parked no customers so that one is closed i wonder is it the only one oh no look at that i found another picture but this must be the only one because it reads this location only right so that's probably the only other blockbuster store that's closed oh no look at that there's another seven and as a matter of fact there's 9085 further branches that closed after blockbuster went bust in 2010. so why do i talk to blockbuster why is that interesting well blockbuster it is quite ironic because forbes they did a study on that case and had an article out in 2014 so four years after they went bankrupt and their conclusion was the irony is that blockbuster failed because its leadership had built a well-oiled operational machine so because they were so extremely efficient that also led to them not letting new information in and ignoring effectiveness they did not learn understand that the market was not willing to to rent dvds anymore or rent videos in a video store that the market was moving somewhere else and it is quite interesting that in 2000 10 years before they went when bust reed hastings the founder of netflix was in in money trouble and he went to dallas to the headquarter of blockbuster and spoke to then ceo john antiocho and suggested a corporation a partnership he offered blockbuster to buy netflix for 50 million dollars they laughed him out of the office and said no and eight years later jim case the then ceo of blockbuster still had quotes like this neither red box nor netflix are even on the radar screen in terms of competition you can hear how proud he says that this is two years before they went bankrupt and had 85 000 employees without a job all of a sudden he also said dvds are a melting glacier yes it's melting but it's a slow melt now i wonder how many of you have rented videos in the past 10 years i certainly haven't i haven't even taken any of my dvds from the basement for the past eight years and watched those so i would not call that as slow melt i would call that a rapid melt kevin lewis the head of digital strategy he said we are strategically better positioned than almost anybody out there never in my wildest dream would i have aimed this high that was in 2010 the year they went bankrupt that's quite interesting i've i feel and he talks strategically better position and we'll see a little bit more about how proud people are of their strategies now yesterday i checked their the the share price of netflix and this amounts to a market capitalization of 245 billion dollars at the highest point in 2004 blockbuster was worth five billion dollars and don't get me started on tech companies and what i valued that's maybe crazy but still this is a factor of 50. so today netflix is 50 times more worth more than blockbuster was at their height the 50 million dollars if they had bought blockbuster and netflix back then would have been multiplied by a factor of 5 000 today that said i do not think the end uh netflix would have been netflix today if blockbuster actually had bought him i think blockbuster probably would have killed the video star i'm quite positive of that so maybe or probably quite good for reed hastings that that blockbuster didn't go into that partnership with netflix example b the second example like except maybe the millennials in this call everybody else will recognize this phone that's a nokia 3310 i think that's the one we also called the brick um [Music] why do i show that well in 2007 what happened in 2007 the iphone came out it was also that year where forbes had this magazine cover where i'd read down here can anyone catch the cell phone king on the front page in 2007 and we all know what happened to nokia after that and the reason again the reason i'm mentioning nokia here is it's quite similar to to blockbuster there was an article by insead on who killed nokia nokia did i find quite quite interesting i found these comments um from former employees of nokia where this one employee writes like nokia was like a very large ship that took forever to change direction and a little bit later nokia was a really efficient machine but efficiently producing the wrong type of product just like blockbuster right the internal structure and way of operating made it very hard to respond to the iphone and i have friends that have worked for nokia and they've confirmed this there was lots of ideas of what nokia could have done even shortly before the iphone but also after the iphone came out but that information never made it to the top where the decisions are made and of course microsoft was also challenged by that i don't know some of you or maybe many of you have already seen this this clip will play it anyway because it's it's amusing steve let me ask you about the iphone and the zune if if i may zoon was getting some traction and steve jobs goes to mac world and he pulls out this iphone what was your first reaction when you saw that 500 fully subsidized with a plan i said that is the most expensive phone in the world and it doesn't appeal to business customers because it doesn't have a keyboard which makes it not a very good email machine now it may sell very well or not i you know we have our strategy we've got great windows mobile devices in the market today we you can get a motorola q phone now for 99. it's a very capable machine it'll do music it'll do uh internet it'll do email it'll do instant messaging so i i kind of look at that and i say well i like our strategy i like it a lot there we had it again this strategy he likes their strategy he likes it a lot and his argument is that he knows what the market wants he's not asking the market and probing it and testing it but he knows what the market wants he knows that business customers want a keyboard i wonder how many of you have a mobile phone with a keyboard today probably nobody and he also argues for efficiency again says like we can produce a phone for 99 that can do everything that everybody wants and the iphone costs 500 and can do a whole lot less and the first iphone was ridiculous and what it couldn't do like it was it was only 2g it didn't have 3g you couldn't copy and paste you could do mms's there's like lots of things you couldn't do but what what you could do with the first iphone work really well for people apparently and yeah another example of a premium price that people were willing to pay for the right product history seems to have it about repeating itself so exactly 10 years later i see this video this is about the car industry so it's a german video but there's english subtitles um and this is the ceo so steve balmer was the ceo of microsoft back then of the video we just saw this is the ceo of volkswagen or vw and he talks about tesla and this is october 2017 in germany it is [Music] [Applause] so i heard i like our strategy i like it a lot similar to steve palmer it reminds me quite a bit of that steve obama video i don't think we have to wait 10 years to see the consequences of volkswagen's strategy you can actually look at the graph so this talk you just saw was from october 19 2017 this is two years later nothing has changed what has changed since then well for volkswagen not a lot i mean plus 75 percent mainly in the past two months um is respectable that's a good share price increase over the amount of over three and a half years however tesla and you guys either know it already or kind of guessed it from the free space we have up here in the slide looks differently that's plus a thousand percent okay and i think matthias miller probably regrets that he mocked tesla and says let's not compare apples with pairs today tesla is worth four times the the amount that volkswagen is worth or in other terms it's like more than the five next biggest car companies toyota daimler volkswagen general motors and build your dreams a chinese company together again share prices are crazy but it does send a signal and it does say like if tesla needs any money they can easily raise capital currently to build whatever they they feel like one more example is uh one from my own experience it's a telco here in switzerland i can reveal that much because we have three so now you have to guess which one it is if you like um yeah the profits were eroding and they said help and a big management consulting fee company came about did 330 pages of power points i was allowed to see the last page only who rate transparency and it read yeah you're right you're in trouble you need to save money and the telco says like how and the management consulting firm says become agile i can tell you those conversations that we had with them as agile coaches was quite challenging because if a company wants to become agile in order to save money then you're headed for trouble that will always create problems now as the ceos of huge companies like microsoft and volkswagen are rolling the drums for efficiency and saying like efficiency efficiency efficiency and not anybody like we haven't heard anybody talk to effectiveness right if economic schools and mba programs talk to efficiency if management consulting firms say like yes you need to become more efficient because this is all about efficiency then no wonder we see signals for if pushes for efficiency gains so many places just open the newspaper and read on the lattice pro latest programs of your government and it's probably about efficiency i'll make it a little bit more clear which warning signs i think they are four of them in my view one is budgets and cost cutting so when it's about spending cuts of budget reductions the it department gets a little less money for the next year it's about cost cutting and that means we again in the folk we are focusing on cost rather than on value and that's quite dangerous and it's again focusing on efficiency rather than let's build the right product so imagine you're building the wrong product like nokia did like volkswagen maybe still does like blockbuster did if they're only cutting costs if they're trying to to dig them out of that hole by cost cutting you can see with athletes right they're not gonna have a new product that people will buy they're just trying to sell it cheaper and cheaper and cheaper this relates also to the innovators dilemma for those people who want to look that one up second one is company is run by process people i had usually i had previously i had the economist like company is run by economist i've made it a little bit more broad and they're like generally processed people so there's good reason we have processed people and we have economists working for larger corporations but they should be supporting and not running the company if you ask me like this is for instance a job ad for uh for a bank here a private bank in in zurich um where they looking for a head of process excellence for the process excellence program and he is supposed to process these uh like like design and optimize the processes uh define measures on how we can measure those processes it reads here control the transformation success centrally of course is centralized we have process excellence and forced adherence it reads here best practices all those terms if those people are running your organization will probably be having an organization that is purely focused on efficiency and very little on effectiveness or at best secondly effectiveness number three i feel is a warning sign if you if there is even a strive towards high degree of specialization continues continuously more and more specialization instead of t-shapedness think about it for your organization like if you are suggesting that a non-expert will do a certain work at some point like not the expert but somebody else how does the organization how do the people in that organization react will they go like no no but peter is the expert peter needs to do this right is it is it a problem um like imagine you're in a scrum planning have you witnessed that at the end towards the end of the planning jasper raises his hand and says well there's nothing for me in this spread right and then they start digging as a team in the product backlog and they go far down and in position number 72 they find something for jasper and then they pull that in so jasper can work in his specialized area and and do that work and there will be lots of handovers pictured between their special those specialists now if we're in a complex context and it's not the same amount of specialization we need all the time then that is a pretty bad strategy if you see that in your organization it's probably a sign for the organization to be focusing on efficiency rather than effectiveness and rather than building those things that are necessary necessary now and that provide most value to the organization we are building the things that we have specialists for and what i often hear in that context when we do so such suggestions and say like ah we need people who have an ability to work outside the specialization the the company's reaction is often we can't afford that as if we would suggest to do that and work on our t-shapedness just because we think it's fun right and the last one and and by far the worst one is utilization maximization and that's actually quite ironic because that's not even efficient like making people work a hundred percent just like anything in a complex system is not efficient and it's certainly not helping your effectiveness it's just making sure that everybody is stressed and that everybody is working at a hundred percent and a hundred percent means that people will not be able to help other people there's not space not slack to do the important things it reminds me of a story where i was i remember vividly i was sitting at my i was still developer and team lead at that time and i had a project manager come over to me and said klaus do you all have enough to do and i nodded and it was kind of a reflex i thought about it a lot afterwards i was like why did i not well because i know exactly what happens if i choke in my head um then the answer would have been well then you can also do this right ensuring as if it's the project manager's job to make sure that everybody is working 100 okay and i went home and i thought like hmm does everybody have enough to do and i came to the conclusion that that is the question that question that particular question has made it into the top three of the dumbest questions i've ever been asked because it's a ridiculous stupid question like do you have enough to do now the question should have been do you guys are you delivering enough is anything in your way can i help you right so that's utilization maximization there is a video from henrik neberg it's called the resource utilization trap i will not show it here but that's quite helpful so have a have a look at that if you like it he explains it quite well so back to the book the art of doing twice at work and half the time what should have been should it read instead what should it have been called instead and i did say it at the beginning already right it should have been called the art of delivering twice the value and how at half the cost that's what the book should have been called maybe you will write that book so in summary agility is also about efficiency as we have the scrum master role for instance in scrum but effectiveness is more important you first need to figure out what product you're building and if it's a product you have already built for a long time like the 3310 or the blockbuster rental of of dvds and and videos you need to constantly be on your toes and be sure that you're continuously building the right product and then see like if we can build it efficiently the more complex your context is the more important effectiveness becomes and the more humble you have to be about like how sure you are about the market which we saw opposite examples of with uh matthias miller and steve baumer be aware when people in your vicinity primarily talking to efficiency or even worse like the maximization of utilization in the latter you might even want to run and find a different employer take small steps with regular course corrections which leads to a better result so that's effectiveness and scrum is awesome needed to say that at the end as well so with that i'd like to open for questions thanks very much everybody you

Channel: GOTO Conferences

Views: 5,510

Rating: 4.1445088 out of 5

Keywords: GOTO, GOTOcon, GOTO Conference, GOTO (Software Conference), Videos for Developers, Computer Science, Programming, Software Engineering, GOTOpia, GOTOpia Chicago, Klaus Bucka-Lassen, Agile, Agility, Agile Software Development, Scrum

Id: q6sq5ktP_3g

Length: 37min 5sec (2225 seconds)

Published: Wed Sep 08 2021

Reddit Comments

[u/knightelite]

Really excellent video. Starts off a bit slow, but really gets interesting a few minutes in and remains so until the end.