This quick answer to this question is it is up to the team. When starting to use Scrum or other agile frameworks, sometimes the Scrum Master needs to explain benefits to the Scrum team and management. My experience is when developing software, management AND the developers expect to have software available to track the backlog, sprint, and schedule.
Most Scrum Trainers recommend not using a third party solution to manage the Scrum model. Having implemented Scrum in a traditional software company used to the waterfall method, I agree with the trainers.
It is recommended that the Product Owner use Excel to track the backlog and Scrum team can use Excel to help track the burndown in the sprint. See the Scrum Alliance for a spreadsheet template. The Sprint Planning and tracking can be done by using an old fashion cork board. This may seem like you went back in time, but this process has several benefits.
- Buying software to manage the process will set an expectation to all stakeholders that the process is being managed. Not to mention that when a company invests money in tools, they expect to see quick results. This can really set the team up for failure before they have the chance to succeed.
- Story cards on a cork board are inexpensive and engage the team in the process. Remember that, once committed, the team is responsible for delivering the work. The ‘how’ is up to them and the Scrum Master is responsible to facilitate the how. The team is responsible for getting it done.Story cards are also extremely flexible and easy to move around.
- Story cards help to create the conversations that are so important for successful sprint
- Cork boards are highly visible and help to create the transparency that is so important.
- The team can figure out the best processes for them instead of complying with their initial understanding of how the software solution wants them to do Scrum.
Challenges that I have experienced when using software
- The product owner and/or stakeholders end up putting too much detail in the product backlog. This can cause the team to spend more time creating estimates and also have a higher expectation of the accuracy given the additional information.
- The team begins to reduce the conversations because the software can capture more detailed requirements.
- Observers can tend suggest/manage the scrum team in order to attempt for them to become more effective. This can be the most difficult part of implementing a strong agile methodology.
Scrum and other flavors of Agile processes require a high level of trust among team members and the executive teams. It is generally understood by Scrum ‘experts’ that it will take a team about 2 years to really figure it out. This needs to be understood and emphasized early on. While 2 years seems like a long time, it doesn’t mean that the team is less productive than the traditional waterfall. It just means the team needs to make mistakes and figure out how to get better over many cycles.
admin Agile, Scrum
Direct Selling companies have common business practices in an unconventional business model. Companies compete in three ways
- Have a unique product or service with a story to tell
- Have a compensation plan that attracts people into the business and then rewards them for their efforts
- Have excellent customer service to support your sales force and customers
You need a balance of all three to work. If you do not plan to have excellent customer service, then please find another industry because this one has already been beaten up enough.
Unique Product or Service
No surprise here, but the more unique the product or service is, the more control you have over your destiny. This is even more important for those companies using the Multi-level Marketing approach. Other forms have the benefit of having a warmer audience and more time to present the details of your products.
This will give you more flexibility with your compensation plan as well because you have more control over the selling price. This can be a trap for some companies though, keep your retail sales price set at what a customer would really pay for it.
Me-too products can be done, but you need to be aware that it will cause you to have to compete more in the compensation and customer service areas.
Compensation Plans
Compensation plans involve all forms of rewarding your sales force. There are three main forms of compensation:
- Commission Plan – This is the main part of your compensation structure and usually includes people being paid for their own selling and the selling done by people within their sales organization (genealogy).
- Incentive Plan – This is often overlooked by startup companies and yet has the ability to create excitement in the field. Incentive plans are a great way to have short-term contests that can really focus your salesforce on a desired behavior. The best part is when it is done it is done. If it was good, then you can repeat it or maybe even include it in your commission plan. If it was not as good as you hoped, then you end it and everyone is happy. You don’t have this luxury with the commission plan.
- Hostess Plan (Party Plan companies) – For companies using the party plan business model, the Hostess Plan can be almost equally as important as the commission plan. If the hostess doesn’t receive enough benefit, the consultant will have a harder time booking a party. This will cause them to lose interest in your business and go find another opportunity.
Excellent Customer Service
I was at a Direct Selling Annual meeting one time and heard Ron Armes, formerly with Creative Memories, say “Never make your Consultants look stupid.” It is hard to make this any clearer although as Direct Selling Companies, it is easy to do. I will write more about this in a future blog, but here are some common ways that we can make our consultant look stupid:
- Delaying an order
- Shipping problems
- Payment Problems (overpayments)
- Not able to answer questions
- Website problems
- Commission Wrong
- No Product Returns Process
- Bad product
- etc.
Do you get it? There are many ways to have a mistake at the expense of the consultant. Good systems and process will help you eliminate this, but it starts with the mindset at the top of the company.
admin Direct Selling
Most companies would agree that the formula to calculate price for your products or service is Price = Cost + Profit. I challenge you to reconsider as I think this formula only holds true for new products.
The formula companies should live by is Profit = Price – Cost. Some will be quick to point out that this is the same formula. I don’t agree, let me explain.
Price = Cost + Profit implies that you can set your price by determining the cost and some percentage of desired profit and establish the selling price. This way of thinking unfairly gives too much of the burden (and blame) to your sales and marketing team. The only long-term plan when competition comes, are margins will naturally come down unless the marketing team can continue to differentiate and protect the margin.
Profit = Price – Cost helps to focus people on establishing the right price less the cost to establish the profit. In order to increase profit, you are now more focused on eliminating waste in the value chain in order to continually reduce the cost of the product or service.
This is even more important during a slow economy.
Waste comes in many forms depending on your product or services. In Taiichi Ohno’s book, Toyota Production System, he includes the following areas for waste:
- Waste of overproduction
- Waste of time on hand (wait times)
- Waste in transportation
- Waste of processing itself
- Waste of stock on hand (inventory)
- Waste of movement
- Waste of making defective products
Software development also has the same areas of waste:
- Waste of overproduction – More functionality that is needed (complex systems)
- Waste of time on hand (wait times) – People waiting for work
- Waste in transportation – Not having resources readily available
- Waste of processing itself – Poor automated testing and bad code
- Waste of stock on hand (inventory) – backlog of design documents
- Waste of movement – Poor office layout
- Waste of making defective products – buggy software
The long-term solution to higher profit is to build good products and eliminating waste. A key to doing this is to have the entire company understand that Profit = Price – Cost and to continually look for ways to remove waste in your company.
Recommended Reading:
Toyota Production System, Beyond Large-Scale Production, by Taiichi Ohno
The Gold Mine, by Fredy Balle and Michael Balle
Additional Websites
http://www.poppendieck.com
http://www.agilealliance.org
admin Management, Operations
Let’s face it, the economy is tough right now. Companies are looking to reduce costs in a variety of ways and unfortunately some of these have a hidden cost.
Generally IT including, hardware, software, printers, staff, etc. are considered an expense for an organization. When times are tight, it is one of the first places that have their budgets cut. This could be a big mistake.
When times are tough, it is important to maximize the efficiencies of the company. Poor software, hardware, or networking can have a big impact to the overall production of your staff. This cost can be the hidden killer.
If you don’t have a full-time IT person, then consider using a certified professional to do an internal audit of your systems. The cost of this will be easily made up by improvements in your technology.
A friend of mine just completed such an audit for a company that does not have inhouse IT staff. They were running on a NT system which was not only slow, but not supported any more. Had that server or network gone down, the cost to the company would have been huge.
I also recommend meeting with your staff to see if there are pain points that are in the way. This blog posting is focusing on technology, but sometimes there are other issues (refer to my TPS Reports post).
admin Management, Technology
“…All it takes is to do the job right the first time. This crap about releasing a turd to the market and letting a separate support organization deal with the fallout has to stop. It’s costing everyone a grave amount of time, money, energy, and stress, and frankly, life’s too short to deal with all that.”
It is difficult to express it any better. Thank you to Kevin King, Chief Technologist and Rock Star at Precision Solutions.
Read more about this and other rants on Precision Solution’s Forum courtesy of Kevin King.
admin Management, Technology