Impacts of traditional project funding models on agile delivery

In one of my previous articles I’d written about the need for change across multiple areas of an organization when undertaking an agile transformation. A key enterprise partner is the Finance department and the organization’s model for project funding will have significant influence over successful agile delivery.

Traditional project funding models are anchored to periodic (annual, semi-annual or quarterly) portfolio re-planning exercises which ingest updated forecasts for active investments and funding requests for new ones. The funding approach for an investment might be one time lump sum, split into two pieces (e.g. seed and remaining), or progressive through the use of funding tranches.

The challenge with all of these funding approaches is that they are based on an estimated cost of a project rather than the funding we wish to allocate to a product, capability or service.

So what challenges arise from a project-centric funding model?

It can result in higher risk, premature financial commitments.

Even in those cases where a funding tranche approach is used, the expectation is that the estimate for the current funding request will be at a high level of confidence. Now nothing prevents project teams from requesting a minimal amount of funding (e.g. one sprint’s worth), but in most cases, project funding approval processes are not lean enough to encourage such behavior. Given this, teams choose to make a funding commitment tied to a major milestone such as a release which might span multiple sprints worth of work. The danger in this is that unless we have a long lived team with predictable velocity working on a well understood product, the level of confidence in the work to be done and how complex that work is will drop the further out we go resulting in a team being at risk of a cost overrun.

Now you might say that agile delivery approaches can work when we fix cost and time and let scope or requirements be the variable. This is true, but how do we know how much to budget up-front to be confident in meeting business needs?

It can also encourage sloppy product management.

When product owners receive funding for a single project and don’t have any guarantees that they will receive funding for follow-on work, it is tempting to throw everything and the kitchen sink into the project backlog and to procrastinate on making tough prioritization decisions. With product-centric funding, the product owner can effectively prioritize the product backlog with confidence that there is available funding for incremental evolution of the product’s capabilities.

Moving from a project-based to a product-based funding model is a challenging people, process & technology change, but will be a powerful accelerator for your agile transformation.

 

 

 

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Categories: Agile, Project Portfolio Management | Tags: , , | 1 Comment

Be disciplined!

If you are sensing a theme here, you probably are.

After writing about the importance of courage for project managers and team members last week, I thought I’d cover another important characteristic, especially for those working on projects which follow an agile delivery approach: discipline.

Merriam-Webster offers a number of definitions for discipline including a few which I’m not overly fond of such as “Control gained by enforcing obedience or order” and “Punishment“.  Neither of these sound well aligned with an agile mindset, do they?

However, the following two definitions hit closer to the value of discipline for agile teams: “Orderly or prescribed conduct or pattern of behavior” and “Self-control“.

So how do agile teams demonstrate these orderly patterns of behavior and self-control?

Some are obvious:

  • Showing up on time for ceremonies while also ensuring that they add value
  • Updating Kanban boards or other information radiators in a timely manner such that they can be trusted by stakeholders as an accurate source of delivery knowledge
  • Adhering to the team’s Definition of Ready and Definition of Done unless there’s a good reason not to do so for a given work item
  • Self-awareness of bias and being sufficiently mindful to not act on impulse
  • Making sure that product knowledge (e.g. training and support documentation) remains current

However others are more subtle:

  • Resisting the temptation to gold-plate
  • Demonstrating courage in coaching senior stakeholders when they want to add more work than the team can complete at a sustainable pace and in a quality fashion
  • Avoiding early commitments
  • Not completing another team member’s administrative work for them unless there is a valid reason for their not doing it themselves
  • Granting a team or a team member the freedom to fail

If there is one lesson I learned from my brief foray into the world of martial arts, it is that self-control is critical to success. Given the parallels which get drawn between learning a martial art and becoming agile (e.g. Shu-Ha-Ri), it is little wonder that self-control is important for successful agile delivery as well.

 

 

 

 

Categories: Agile, Project Management | Tags: , | Leave a comment

Have courage!

When we think of the characteristics of a good team player, we tend to come up with attributes such as demonstrating selflessness, possessing empathy, or being a good communicator. While these are all critical to creating a high performing team, one trait of effective project managers and team members is the ability to do things which take them outside of their comfort zone. In other words, courage.

Why do I consider courage to be so critical?

Courage won’t guarantee that right decisions will get made, but it might prevent some bad ones.

Presented with an unrealistic deadline to deliver fixed scope with fixed resources and budget, if no one demonstrates courage by raising concerns or by negotiating for a feasible commitment, the team might have just signed up for their very own real-life Kobayashi Maru scenario.

Perhaps a sponsor or other senior stakeholder is pushing for the use of a particular delivery approach for political reasons. If it is not the best fit for the needs of the project, it’s rare that the accountability for this bad decision would fall on that stakeholder but it’s more likely that the team will bear the brunt of the issues.

Maybe the business case for your project is no longer attractive. It might be safer to keep your head down and continue to deliver according to approved baselines, but wouldn’t it be better for your company, your team and your own career if you were to bring this concern to the sponsor or other appropriate governance body?

Maybe your organization’s project management methodology requires the completion of a particular artifact. No one on your team believes it adds any delivery or risk control value. If you don’t have the courage to ask “Why?” or to seek an exemption, you’ve likely lost some credibility with your team members.

Courage preserves integrity by enabling us to operate with transparency

It’s hard to tell your customer that there is a unrecoverable variance or other critical issue with their project. But if we candy-coat this message, or worse, avoid telling the customer entirely, the truth will out, and the fall out is likely to be much worse than if we’d summoned the courage to break the bad news in a timely manner.

Maybe one of your fellow team members is behaving in a manner which is irritating others. If we don’t have the courage to provide coaching or constructive feedback sensitively but directly to that team member and give them an opportunity to respond, we aren’t demonstrating respect for that team member or our team.

Courage enables us to grow

Whether your project is being delivered using an adaptive or a deterministic life-cycle, team members and your company as a whole will benefit if they occasionally work on activities which fall outside of their core specialization, if doing so benefits the team. Developing generalizing specialists will take support from both functional managers and from one’s peers, but it also requires a healthy dose of courage for us to try something for the first time, knowing that we might fail. This applies not only to the activities performed by team members, but also the types of projects or work assignments we ourselves take on.

Courage is the most important of all the virtues because without courage, you can’t practice any other virtue consistently.” – Maya Angelou

 

Categories: Project Management | Tags: , , , , | Leave a comment

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