So, can you afford a good ScrumMaster?
The answer is obviously yes, and in fact they are even in greater need (since there is greater urgency).
Now, let's unwrap this from a financial viewpoint. We will use a simple example, and provide a simple spreadsheet. Hopefully you can take these ideas, use your own local numbers, and have a good conversation so the right thing happens.
A caveat: This post is not suggesting that the ScrumMaster is the end-all and be-all. We are asserting that the ScrumMaster can have a big influence on the productivity of a team. And that better ScrumMasters can have a lot more influence. And that the best ScrumMasters are rare.
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Imagine a team of 8 that costs $1,000,000 per year. Including the Product Owner and ScrumMaster.
That team produces Business Value at some multiple of its cost. Let's take the case that that multiple is 7x. So the team produces $7,000,000 in BV per year. (One can think of BV being NPV (net present value) but it could be measured, originally at least, many other ways.)
Let's take the case that the team has an "ok" ScrumMaster, but the team is increasing velocity at only 10% per year. (Assume at the beginning of the year they are running at 150% of waterfall velocity.) Assume the "ok" ScrumMaster is making, all-in, $125K.
Now assume a "better" ScrumMaster who can double the productivity of the team in one year. (He does this by removing impediments or having them removed.) And assume that the better ScrumMaster (if he is available) costs $250K per year.
(NB. I hope you are noting that the numbers we are using are simple, round and convenient. You have to identify your own numbers. Nonetheless, I will call the numbers in this post, hopefully, inspirational.)
My, my, my. Very expensive dude, isn't he.
Should we invest in the better ScrumMaster?
Well, let's look at this some more. We assume that the Product Owner has or can discover new Product Backlog items so that the average BV of stories will not decline over the year. And let's assume the better ScrumMaster does not improve productivity by helping her (the Product Owner) discover more business value. Let's further assume the better SM improves (enables the team to improve) velocity roughly equally over the year. So that, over the next year the team will produce $10.5 million in business value (rather than $14 million, if the jump were to happen immediately).
I have also assumed the situation (the team, the managers, the company, etc) will allow the better SM to help enable the team to reach a 2x level.
(N.B. The conversation is about value in relation to cost. It is not, and never was, purely a cost consideration.)
So, for an added investment of $125K, the firm will get an extra $3.15 million. Is this a good business decision?
Well, we don't quite know yet.
Let's assume the better SM finds impediments that cost $1 million to fix (training, SW, HW, etc), so that, in simple terms, the firm must invest a total of $1.125 million total to get $3.15 million.
What do you think? Is this a good business decision in a recession?
One could discuss my assumptions endlessly. Discuss a little if you must; then do an experiment where you are. We are all interested in your results.
(To update this algorithm with your own assumptions, download the XLS file here. And revise it.)
N.B. Scrum was built to help teams get 5x to 10x productivity gains. I think a 2x gain in one year is conservative (low, easily reached in a normal situation). So, there is more juice in the orange. There is also the possibility that you have a "dead core" and further productivity improvements are not possible. More on this in later posts.
N.B. A key principle of Agile is sustainable pace. So in Scrum, the gains are not made by driving the team through a "death march". Unfortunately, this still has to be said for some people.