The Scrum Startup

Posted on Thursday 15th December 2011

Summary

The blog posts explains how to setting up a Scrum team as an incubator in an established enterprise helps create a new product, and to pilot an agile way of working.

With the term startup we usually associate starting a new company and pursuing a new idea with a small, creative team. While Scrum has been used for many years in startup companies – companies with a limited operating history – I have found that setting up a Scrum team as a “startup” or incubator within an established enterprise is a powerful approach to create a new product, and to pilot a new way of working.

A Scrum Startup consists of the product owner, the ScrumMaster and the development team. Together, they form is a self-contained unit that is loosely coupled to the rest of the organisation and in charge of developing and releasing the product. The product owner acts as an intrapreneur, an entrepreneur within the larger organisation.

An Enterprise Scrum Startup

The first Scrum project I helped run in 2004 had ambitious plans: It was tasked with creating a new enterprise telecommunications software product. The company had high hopes for the product: It was considered vital to the business group’s future. To create an environment that encouraged innovation and creativity, we opened up a new development site, and assembled a new team.

We also made sure that the product owner was able to act as an intrapreneur and received the backing from senior management. The individual had a vision for the new product and a budget to turn the vision into reality. The Scrum Startup controlled the product under development including the development and test environment, and it experienced few changes to the team composition. The individuals had a personal stake in the outcome: Everybody desperately wanted the new product to succeed knowing that it would shape future of the group.

We didn’t quite realise it, but we had created a startup within a well-established, large enterprise: Siemens, a company which has more than 420 000 employees and which is over one hundred years old. The resulting product became part of OpenScape Unified Communications. It has won a number of awards, and is still selling well.

Autonomy

Setting up a Scrum team as an incubator is so powerful as it disentangles the team tasked with innovating from the rest of the organisation. Think of a Scrum Startup as a new house in the enterprise village, or a new tree in the corporate garden.

The members of the Siemens telecommunications project were free to literally think outside the box, to try out new things, and to be creative. Most importantly, it created a safe environment for experimentation: for testing new ideas and for failing. Our first minimal viable product (MVP), the product increment of the second sprint, turned out to be a failure: We had chosen the wrong component technology, and the product did not live up to the users’ performance expectations.

Our first process experiment ended in failure too: We had started using a heavily tailored, lightweight version of the Rational Unified Process (RUP) that included development practices from Extreme Programming. After a few iterations, we decided to switch to Scrum. The RUP iteration management and collaboration practices simply did not work for us.

Without those early failures and the learning that they enabled, we probably would have not been able to deliver a successful product.

Collaboration

As important as autonomy is, it needs to be balanced with collaboration: working together within the Scrum Startup and with the stakeholders. A healthy, trustful relationship between the product owner and the team, the product owner and the ScrumMaster, and the ScrumMaster and the team is a prerequisite for applying Scrum successfully and for creating a great product. But it’s no less important to invite internal stakeholders to participate in the development process, and to use the feedback from target customers and users to create a product with the right features for the right people.

When we created the telco product, we invited representatives from marketing, sales and service to the sprint review meetings, and we demoed MVPs to other development groups destined to build on the product. Releasing early product increments to employees in other parts of the enterprise is another great way to benefit from the ideas of the rest of the organisation, and to keep people informed about the progress. Exposing product increments early and frequently to target customers and users in form of demos or releases helps to achieve a great product market fit.

Scrum Startup Qualities

To help your enterprise Scrum Startup succeed, make sure it fulfils the following four properties: It should be loosely-coupled to the enterprise and in control of the product; the people working on the product should have a personal stake, and the incubator should be stable. The following image depicts the four qualities:

Summary

Reflecting on more than ten years of experience using agile techniques to create products and helping organisations establish Agile, I am convinced that combing the introduction of Scrum with a new product development effort and setting up the Scrum team as an incubator can facilitate product and process success. Give it a go, and let me know how it’s working for you.