Why Budgeting Kills Agile And Innovation by Steve Denning

Budgeting, as most corporations practice it, should be abolished.”

—Jeremy Hope and Robin Fraser, Harvard Business Review, 2003

The budget often constitutes one of the last—and largest—stumbling blocks to creating a truly Agile organization.

Budgeting as practiced in most large organizations today is cumbersome, expensive, time-consuming and wasteful. It often cripples innovation. It is riddled with gaming-the-system. It encourages unnecessary spending and fosters sub-optimal targets. It hides accountability. It is demoralizing to the participants, inefficient, ineffective, built on fictions, and fundamentally at odds with the dynamic of business agility.

None of this is new. Way back in 2003, Jeremy Hope and Robin Fraser wrote as much in Harvard Business Review. Yet traditional budgeting remains entrenched in big organizations, even those implementing Agile. Why? A key reason is that budgeting interlocks with other aspects of the internal bureaucracy.

Read more about the budgeting in theory and practice at - https://www.forbes.com/sites/stevedenning/2019/04/28/why-budgeting-cripples-agile-and-innovation/#7bd3e5a58f31

Comments

PDCA & SCRUM (or Agile); Why is it important?

The PDCA (Plan DO Check Act) cycle was made popular by Dr. W. Edwards Deming. This is a scientific cyclic process which can be used to improve the process (or product). This is cyclic in nature and usually time boxed. Plan This is the first stage of the process. During this step the team discusses the objectives, the process and the clear conditions of exit (conditions of acceptance). This stage sets the measurable and achievable goals for the team. DO Team works together to achieve the objective set in the planning phase. Team works with the set of agreed process. Check Once the implantation is done team regroups and verifies the output and compares it to the agreed conditions of acceptance decided during the planning phase. The deviation, if any, is noted down. ACT If any deviation in planned tasks is observed during the Check stage, a root cause analysis is conducted. Team brainstorms and identifies the changes required to prevent such deviatio...

Product Backlog: Should you write everything in user story format?

I like user stories a lot. They help everyone talk the same language and results in a better product. User story alone does not constitute product requirement. User story is supposed to be a place holder for discussion which should happen between the team, Product Owner and the customer. This discussion result in a common understanding which along with the user story content is the product requirement. This format captures the essence of requirement without confusing the readers User Story is only one of the many different ways in which requirements can be represented. This is not mandatory in any Agile “process”. But many have made this mandatory. I have seen many spending countless hours trying to write the requirements in user story format when they could have easily written that in simple one-line sentence in few minutes. I have seen team members refusing to even discuss the requirement until product owner rewrote the requirement in user story format. ...

Why is potentially shippable product quality important

Agile teams work in iterations. During this period, they are supposed to work on product increments which can be “delivered” at the end of iteration. But how you know that the correct product was delivered? Many teams have different kinds of acceptance criteria and Definition of Done (DoD). But in many cases, this “done” is not the real “done” there might be some testing pending, some integration or review pending or anything else which prevents the actual use of the product increment. Many of these teams will need additional iterations to finish hardening their products. Many teams will implement different types of “gates” or approval steps to move to next stage. The free flow of product will be interrupted. They might end up doing mini waterfall within their agile process. Many don’t even realize this. This results in poor quality and requires additional effort to “harden” the product. Potentially Shippable Product increment The acceptance criteria and DoD should be modified...

The Agile School

Search This Blog