What’s a ScrumMaster Worth?
You may have noticed that some people are feeling a recession out there (these days). So, money can be a bit tighter.
So, can you afford a good ScrumMaster?
The answer is obviously yes. In fact, they are even in greater need (since there is greater urgency).
Now, let’s unwrap this from a financial viewpoint. I will use a simple example and provide a simple spreadsheet. 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. The best ScrumMasters are rare.
Imagine a team of eight that costs $1 million 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 multiple is 3x. So the team produces $3 million 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.)
The team has an “OK” ScrumMaster, but 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, $125,000.
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 $150,000 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. Let’s assume the only thing that improves is because of the SM. We remove more impediments (or reduce the impact of more impediments), and therefore the team doubles their productivity.
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.
(NB. 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 $225,000, the firm will get an extra $1.5 million. Is this a good business decision?
Well, we don’t quite know yet.
Let’s assume the better SM finds impediments that cost $200,000 to fix (training, SW, HW, etc.), so that, in simple terms, the firm must invest a total of $225,000 total to get $1.5 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.)
NB. 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.
NB. 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.