In a wonderful interview that BRAND EINS [1] led with Niels Pfläging we can read that classical business planning, that is budgets, strategy and annual plans are absolutely nonsensical and counterproductive. “If businesses plan, they either waste time or hurt themselves.” [2]
His argument is: “[...] whoever wants to be successful today must be able to react with extreme flexibility to keep up with the fast changing conditions of the markets.”
This sounds completely logical but as far as I know, only he says it that radically. This past year, however, has proven him right. We were all surprised by the economic crisis. Yes, some people might have known that Greece is bankrupt, but who knew what consequences this would have for the Euro? Who knew that?
What he says is clear for us as the Scrum Community, isn’t it? Or is it not? Sometimes I start having my doubts. On one hand we want to be agile but on the other hand we don’t want to confront the implication: Planning doesn’t make sense. At least not in the long run.
But how do we direct ourselves if we don’t make any more plans? How do we know we are taking the right road? Don’t we need a plan for that? Pfläging’s answer is brilliant: “For direction we can add some relative goals: we plan to become better than the competitor or another unit within our own company.”
That’s logical. There aren’t any absolute goals. They aren’t really important. Whether the German National Soccer Team plays absolutely brilliantly and shows great soccer, is irrelevant. The victory in a game is always relative.
But if things are relative, we must always give our employees the opportunity to direct themselves towards relative goals. But that’s only possible, if they have the respective data to justify their daily activities: “The most progressive [companies] delegate responsibility to their employees when it comes to customer contact, at the same time they grant them insight into relevant business data.”
Again extremely consequent. In Scrum we would say now that the Product Owner has to know at all times what effect the Return-on-Investment has. The PO has to direct himself. ” If a branch [in Scrum the Project, BG] doesn’t function well, management or control does not jump in. The appropriate team has to react themselfes” — This idea is followed consequently on Facebook. There there is no road map, as far as I know. The teams decide themself, what they have to do.
But…how is the company managed, which rules must be followed, how does everyone know, what he has to do? A few general principles are needed, not a thousand rules. Rules seem bureaucratic, principles leave room for entrepreneurial thinking. Management based on principles. Herein lies the crux of the matter. What company tells its employees why they have certain rules? Rules are established, but the priniciples behind them are not mentioned or explained. If they were priniciples or guidelines the employees could guide themselves.
But how do you do this? Naturally he does not say. But what he does say is ” In order for this transformation [I, BG, think a Scrum-] to take place on a wider basis one must generate better thinking and then quickly change something practical in the company.”
There are numerous examples, of how Big Bang implementation is possible in the world of Scrum.
Pfläging also clearly emphasizes “As long as managers don’t begin to trust that their employees will work without supervision and incentives, but simply because they want to and are able to, companies will remain centers of hierarchy dominated by control freaks and planned budgets.”
What should I add? He is right.
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[1] Brand Eins, www.brandeins.de
[2] Niels Pfläging, Author of the 12 new laws of Management, Beyond Budgeting, and Präsident of the management consulting firm Meta Management Group.