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www.rallydev.com
Architecting and
Confronting a New
System to drive
Business Agility
@RallyON @RallySoftware
Slides: bit.ly/engineerbizagility
Ryan@rallydev.com
@RallyON
#RallyforImpact
http://xkcd.com/859/
The ability of the
business to create, sense
and respond to change
lies with engineers – you
are the key
How many of you
are Engineers = ?
What do you want
to become = ?
CEO
Great Engineer
Chief Engineer
Technical
Founder
I know what you
are thinking!
Wow, that takes
brilliant work
Can I drive
innovation?
Maybe I should be
on the management
track
?
Let’s Explore
your job
What are we
taught?
My Rock Geology
Professor in 1985
Bernard Amadei
In a four year bachelors
of science degree:
Civil Engineer – 1200 to 2000
Eng Physics – 3000 to 5000
You learned the
discipline!
And…
What we assume
h"p://arxiv.org/abs/cond-­‐mat/0412004	
   h"p://www.flickr.com/photos/danielmorrison/428130095	
  
Gaussian
distributions
What surprises us?
Low probability
events have
higher impact
Plausible
An example
hp://www.telegraph.co.uk/news/picturegalleries/howabouhat/6988398/The-­‐worlds-­‐tallest-­‐man-­‐Sultan-­‐Kosen-­‐and-­‐the-­‐shortest-­‐man-­‐in-­‐the-­‐world-­‐He-­‐Pingping-­‐meet.html	
  
8’1’’
2’5’’
3.3 x
hp://www.flickr.com/photos/jurvetson/4368494308	
  
Bill Gates
The
Entire
Room
650 x
What does this
look like in the
Business?
Digital Disruptions
#RallyON14
… the Wall Street Journal noted that from 2007, when the iPhone was first
introduced, to 2012, household spending in the U.S. on communications
increased by 11 percent while spending on cars declined. So if you’re a
carmaker and you’re comparing yourself to other carmakers, you’re missing
this completely.
Competition on Any Front
Yes, this is about your company
Typical Business
Approach
Assumes:
Certainty is high
Goal:
Maximize individual
efficiency
Annual
Budgets
Comprehensive
Analysis
Detailed
Plans
Waterfall
Execution
Create a
plan to
predict
the future
How many
guesses?
First contact
with users
Obscure the
uncertainty with
details of a false
precision
How do we make
sense of this?
Uncertainty
Chaotic SimpleComplicatedComplex
Chaotic SimpleComplicatedComplex
Uncertainty
Engineering with
Uncertainty
http://youtu.be/_vBYjx6ID4g
hp://www.youtube.com/watch?v=HGiHU-­‐agsGY	
  
	
  
Natural/
Social
Systems
Mechanical
Systems
Uncertainty
Flikr by _DJ_
Neurons
Synapses
Transistors
Links
Flikr by Jurvtson
INSTEAD Assume:
Uncertainty exists
GOAL:
Maximize value
delivery
Sense and Respond to Change
Three Levels of Agility Connect
your organization
Optimize for Business Value
Deliver Value Faster
Adaptive
Steering
Disciplined
Exploration
Empirical
Learning
Agile
Execution
companyoperatingsystemCompany:
date:
Corepurpose
Yourcorepurposeisthereasonyourcompanyexists.Itshould
capturethemotivationbehindtheworkyoudo.Itshouldinspire
yourworkwhilebeingbeyondachievement.
Doesthispurposeinspireyou?Areyouproudtobepartofthis
purpose?100yearsfromnow,willitstillinspire?doesthis
purposehelpyouimaginepossibleopportunitiesoutsideofyour
currentsituation?Doesthispurposehelpyouunderstandwhat
opportunitiesyouwon’tpursueinthefuture?Howwillacynic
respondtothispurpose?
Corevalues
Yourcorevaluesaretheessentialandenduringsharedbeliefs.Thesebeliefsaresofundamentalandstronglyheldthattheywill
oftengounchangedformanydecades.
Wouldthesevaluesmakesenseoutsideyourcurrentcontext?Wouldyouwantfuturegenerationstolivebythesecorevalues?
Wouldyouhonorthesevalueseveniftheybecameacompetitivedisadvantage?Willyouhireandfirebasedonthesevalues?Would
youquitbeforecompromisinganyofthesevalues?Ifyoucreatedanewcontext,wouldithavethesevalues?
guidingprinciples
Guidingprinciplesestablishacommonapproachtodecisionmakingthatcreatesaligneddecisions.theprinciplesshouldgiveclear,concise,high-levelguidanceaboutwhattodoandwhatnottodo.Think
oftheseaslongstandingmantrasthatwillguidethedecisionsyoumake.Theprinciplesshouldbecoherentwitheachother,thepowerisinthewhole,nottheparts.
Aretheseprinciplesspecificenoughtoguideyourthinkingandgeneralenoughtostandthetestoftime?Dotheseprincipleshelpyouturnstrategyintoaction?Dotheseprinciplesprovidedecisionmaking
clarityindependentofthesituationsurroundingthedecision?Doyoubelieveintheprinciplestothepointwhereyouwillletthemguideyouingoodtimesandinbadtimes?
BHAG
A“bighairyAudaciousgoal”isahugeanddauntingchallenge
expressedasaclearandcompellinggoal.
IsthegoalSMART(specific,measurable,achievable,relevantand
time-bound)?Isthegoaleasytounderstandandremember?Willit
beastretchtoachievethisgoal?Doesthegoalinspireyouand
others?willachievingthegoalrequireimprovementandgrowth?
vision
Avisionclearlydescribeswhatitwillbeliketoachieveyour“bighairyAudaciousGoal.”
Isthevisionengagingenoughtocreatestrongemotionsforthoseinvolved?Isthevisionarticulatedinawaythatyoucanvividly
picturethisGoal?Doesthevisioninspireyoubypaintingtheachievementofagrandadventure?
Why: Our core beliefs
Create coherent behaviors through shared beliefs
How: Our guiding principles
Create coherent decisions through shared principles
What: Our aspirational Goal
Create energy and alignment through a shared goal
I-2
Change comes
from individual
advocates
Breakthrough
comes from
transformation
Bottom Line Impact  Breakthrough
Who’s Job is it
to change this?
Answer: THE
Business folks!
Typical approach
https://www.flickr.com/photos/wonderlane/7923402476
Magic box of innovation
Answer:
EVERYONES
P
R
E
P
A
R
E
P
L
A
N
Uncertainty
E
M
E
R
G
E
A
N
A
L
Y
Z
E
Uncertainty
E
X
P
L
O
R
E
E
X
E
C
U
T
E
Uncertainty
Balance Execution
and Exploration
Product
Backlog
Iteration
2 Weeks
Daily
Meeting
Iteration
Backlog
Product
Increment
Scrum Disciplined Execution
Disciplined Exploration
http://rallydev.com/ELS
Add Disciplines
of a Scientist
http://www.flickr.com/photos/memekiller/4564410767
Chaotic SimpleComplicatedComplex
Do
Anything
Follow
Recipe
Analyze
Guess 
Learn
BureaucratEngineerFirefighter Entrepreneur
Uncertainty
Chaotic SimpleComplicatedComplex
Do
Anything
Follow
Recipe
Analyze
Guess 
Learn
Uncertainties
Canvas Name: Date:
I-2
Level of UncertaintyLow High
DegreeofImpactLowHigh
Obvious
Actions have a repeatable and predictable effect on
the environment that everyone can understand.

Chose the obvious action to achieve the desired
effect.
Complicated
Actions have a repeatable effect on the environment. Because the relationships within the
environment are difficult to understand, typically only experts experienced in the domain can
understand and predict the relationship between actions and their effect on the environment. 

Consult multiple experts to understand the actions necessary to achieve the desired effect.
Complex
Actions do not have a repeatable effect on the environment. Because there are many independent
actors and interaction points, the environment will coevolve and defy prediction even by experts.

Run multiple, small experiments interacting directly with the environment to encourage the desired
effect to emerge.
Adaptive
Steering
Disciplined
Exploration
Empirical
Learning
Agile
Execution
companyoperatingsystemCompany:
date:
Corepurpose
Yourcorepurposeisthereasonyourcompanyexists.Itshould
capturethemotivationbehindtheworkyoudo.Itshouldinspire
yourworkwhilebeingbeyondachievement.
Doesthispurposeinspireyou?Areyouproudtobepartofthis
purpose?100yearsfromnow,willitstillinspire?doesthis
purposehelpyouimaginepossibleopportunitiesoutsideofyour
currentsituation?Doesthispurposehelpyouunderstandwhat
opportunitiesyouwon’tpursueinthefuture?Howwillacynic
respondtothispurpose?
Corevalues
Yourcorevaluesaretheessentialandenduringsharedbeliefs.Thesebeliefsaresofundamentalandstronglyheldthattheywill
oftengounchangedformanydecades.
Wouldthesevaluesmakesenseoutsideyourcurrentcontext?Wouldyouwantfuturegenerationstolivebythesecorevalues?
Wouldyouhonorthesevalueseveniftheybecameacompetitivedisadvantage?Willyouhireandfirebasedonthesevalues?Would
youquitbeforecompromisinganyofthesevalues?Ifyoucreatedanewcontext,wouldithavethesevalues?
guidingprinciples
Guidingprinciplesestablishacommonapproachtodecisionmakingthatcreatesaligneddecisions.theprinciplesshouldgiveclear,concise,high-levelguidanceaboutwhattodoandwhatnottodo.Think
oftheseaslongstandingmantrasthatwillguidethedecisionsyoumake.Theprinciplesshouldbecoherentwitheachother,thepowerisinthewhole,nottheparts.
Aretheseprinciplesspecificenoughtoguideyourthinkingandgeneralenoughtostandthetestoftime?Dotheseprincipleshelpyouturnstrategyintoaction?Dotheseprinciplesprovidedecisionmaking
clarityindependentofthesituationsurroundingthedecision?Doyoubelieveintheprinciplestothepointwhereyouwillletthemguideyouingoodtimesandinbadtimes?
BHAG
A“bighairyAudaciousgoal”isahugeanddauntingchallenge
expressedasaclearandcompellinggoal.
IsthegoalSMART(specific,measurable,achievable,relevantand
time-bound)?Isthegoaleasytounderstandandremember?Willit
beastretchtoachievethisgoal?Doesthegoalinspireyouand
others?willachievingthegoalrequireimprovementandgrowth?
vision
Avisionclearlydescribeswhatitwillbeliketoachieveyour“bighairyAudaciousGoal.”
Isthevisionengagingenoughtocreatestrongemotionsforthoseinvolved?Isthevisionarticulatedinawaythatyoucanvividly
picturethisGoal?Doesthevisioninspireyoubypaintingtheachievementofagrandadventure?
Why: Our core beliefs
Create coherent behaviors through shared beliefs
How: Our guiding principles
Create coherent decisions through shared principles
What: Our aspirational Goal
Create energy and alignment through a shared goal
I-2
Turn Uncertainty
Into Knowledge
Business
Initiative
http://rallydev.com/FRAME
Frame
By gaining
empathy and
safety
Do Engineers
have Empathy?
https://vimeo.com/5485269
Some rights reserved by Marek Mahut
It is born into us!
We just need to
reconnect with it
How many
USERS have you
ENGAGED with
in the last year?
Interview people
Build empathy
Seek Insights
Frame the
Problem
Frame the
Experiment
Maximize Learning
Feasible
Desirable
Viable
Will rapidly
change
markets
Locking in
Learning and
Sharing
What we

expect

will happen
What

actually

happened
Learning
Whole System!
QUARTERLY These Activities to
Create, Sense  Respond
Portfolio
Steering
PSI Demo
 Release
Planning
Informs
Forecasting and
budgeting
Prioritization

value delivery
Feedback
Feedback Informs
Business
Steering
Organizational Agility as important
as Value Stream Agility
Business strategy 
(3–5 years)
Forecasting and budgeting
(12–18 months)
Prioritization and value delivery
IT/Engineering
(3 months–9 months)
Long-range business commitments 
(1–3+ years)
Synchronize These Activities to
Create, Sense  Respond
What is the new
system?
Business Agility Practices:
All are based on Lean Thinking
Customer
Development
Design
Thinking
Scaled Agile
Development
Lean Product
Development
Developer
and Team
Flow
DevOps
Agile Portfolio and Steering
Innovation Pipeline
Organization Guiding Principles for Sr.
Managers, Executives and Boards
•  Serve by leading and lead by
serving
•  Follow the work, not the worker
•  Respect people (customers,
employees, suppliers, and the
community)
•  Balance execution and exploration
Portfolio Guiding Principles for
Departmental Leaders
•  Plan first level of execution roughly
right over precisely wrong
•  Fund capacity and adjust scope
over project funding
•  Fund at the team level over FTEs
•  Optimize value delivery over
resource utilization
Execution Guiding Principles for Teams
•  Self organize around the work
•  Inspect and adapt continuously
•  Collaborate and commit through
trust and transparency
•  Work on the few things that matter
most
- 112 -
Transform Your Work System
•  Ideal (future state)
•  Failure (Not Learning)
•  Efficiency (Flow)
•  Leadership (Servant)
•  Smooth Fast flow
•  Work Visualization
•  Lean and agile
•  Collaborative to leverage wisdom
Guiding Ideas
Organizational 
Technical
Infrastructure
Tools, Techniques
 Methods
Execution and Exploration
Market
Experiments
Experiments Too
*Experiments (business spike)
can validate backlog, just like a
technical spike
The ability of the
business to create, sense
and respond to change
lies with engineers – you
are the key
From “T”
To “E”
Empathize
Explore
Execute
Frame 
Empathize
Build 
Ship
Test 
Measure
Learn 
Share
How effective can you become at
this WHOLE cycle?
1. Become a Disciplined Explorer
2. Take Time to Empathize
3. Share your Learning up and out
4. Think Globally, Act Locally
Make your Vector Math of your
BUSINESS work
*Christopher Avery’s –Responsibility Framework
TAKE
Responsibility*
Intention
Awareness
Confront
Global/Citizen
Engineer
Rally’s Social
MISSION
Create and
Mobilize
Citizen
Engineers
•  Technically
•  Environmentally
•  Socially
Responsible Engineering
Feasible
Desirable
Viable
Will rapidly
change the
world
Copyright 2011- FakeGrimlock
http://www.youtube.com/watch?v=z1x3BZjU5Pw
Dent the World!
Dave
Douglas
David
Snowden
Kembel
Brothers
Dean
Leffingwell
Bernard
Amadei
Don
Reinertsen
Steve
Blank
Eric
Ries
Shoulders of whom I am standing on
Thank you
@RallyOn #rallyforimpact
Slides: bit.ly/engineerbizagility
)

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