Attract the right customers with another #ExtremeContracts principle: Customer Channel

This is a guest blog post by Jacopo Romei. Author of the Italian version of the book Extreme Contracts, and author of an upcoming book on the same topic in English.

We all know how easy it is to leave Netflix after having subscribed to their service.

Whenever you want to cancel the subscription, you just click a button and you are free, no questions, no tricks, no cheating.

You are free to use the service until the date you had paid for and you will be free to rejoin again, whenever you want. This feeling of freedom is a crucial part of Netflix branding, and was a key attractor for their first users. You read it on their homepage, clear and bold: “Watch anywhere. Cancel anytime.” It is a promise, second only to the one about the chance to see your favorite movies in full mobility on any device.

Now, imagine for a minute, what would happen if Netflix were to not keep their promises. Imagine that Netflix would ask for extra documentation before the user was allowed to leave, perhaps even setting a mandatory notice period, preventing users from quitting when too close to the subscription expiry date.

Imagine what would happen if Netflix wouldn’t actually allow you to “cancel anytime.” If this nightmare scenario was a reality, tons of disappointed friends would tell you that Netflix is not up to expectations, they would abandon the service with no intention to return, and they would actively discourage other people from subscribing in the first place! In the end, Netflix would see fewer users and less engagement.

The Anti-Netflix contract

The plot thickens…

Continue reading Attract the right customers with another #ExtremeContracts principle: Customer Channel

Keep your negotiation value-centered and finish them in a second! – an #ExtremeContracts principle

This is a guest blog post by Jacopo Romei. Author of the Italian version of the book Extreme Contracts, and author of an upcoming book on the same topic in English.

A few years ago I managed to work less than a week for a 5-digit fee. The best part is that my customer was very happy to pay and didn’t even try to negotiate the price down: they just accepted my proposal as-is. Do you want to know how I did it? I just made my agreement value-centered. Read on for the details!

A not so tender… tender!

In May 2015 I was contacted by Xrother, a communication agency based in Rome. They had been working with a huge automotive group for a few years and they were facing a new challenge. The group was re-validating all its suppliers by means of a request for tenders and Xrother had been asked to submit their proposal too.

Xrother owners and managers had heard about my agile approach to strategy and processes in a few previous workshops and so, less than two weeks ahead of the tender’s deadline, they called me and asked for help setting their proposal up. They were hoping I could raise their chances of winning the bid.

Due to a good collaboration with that automotive group during the previous years, Xrother supposedly had a good chance of renewing the contract with the, but they didn’t feel 100% sure of that. Winning the bid was worth a three-year agreement, many millions of euros, and was a key milestone in Xrother’s strategy. It was not a matter of life-or-death yet, but the outcome would influence many decisions in the years to come.

A wicked problem

In this scenario—opaque by definition—it was not obvious what kind of agreement I could have reached with Xrother. Having them paying by the hour didn’t seem fair nor suitable for this particular situation. On the one hand, it was very hard to show that the days worked would be the right amount. On the other hand, did the value of winning the contract have anything to do with the number of days spent trying to win it?

For the same result—thus for the same value—wouldn’t it have been the same if I had worked two or seven days? Why should I have been paid more if I were to work longer? Rather the opposite! I should have been compensated for delivering the same value as quickly as possible!

A fixed-price contract did not fit either. How could I ensure I deserved a priori any sum of money? Was it possible to estimate the value of my collaboration up front? Would any unforeseen idea be acknowledged explicitly? How would we attribute ideas ownership during the collaboration? Is it possible to own an idea at all when you work in a team? In football, when the assist comes from the genius midfielder player, is it fair or even possible to attribute the merits of a goal to the forward only?

It was a wicked problem. At the same time, two apparently opposed statements were hanging over me: 1) my help had been requested on the basis of my good reputation, and 2) they couldn’t blindly trust my competence. How could I prove myself to be useful to them in that scenario? What if I didn’t have the needed skills? What if external factors had diverted me from being of any help?

A smart proposal

I wanted an agreement with Xrother to guarantee for me:

  1. Freedom to move toward the goal, with no established rigid plan and no pre-packaged role. I wanted a license to kill to maximize my chances to deliver an effective result.
  2. Freedom to be wrong. I couldn’t promise anything and I didn’t want to brag about my certainty to win the bid. I wanted the agreement to reflect the inherent uncertainty of our shared endeavor.
  3. Proportionate revenues with respect to the value of the deal I’d have helped to make. The economic value at play was high, but this tender was also important due to the allure of that customer: every communication agency would love to have that automotive group as a customer.

So I decided to go for an agreement shaped like this: I would work an unknown amount of time, exclusively decided and planned by myself until the tender deadline. Xrother would pay a very small amount of money by the same deadline. Once the winner of the tender was known, and if Xrother would win the tender, I would receive an amount of money equivalent to 0.5%—5 per one thousand!—of the value of the tender.

After working four days side-by-side with the whole staff involved in designing and writing the proposal, I invoiced my first fee, worth only a few hundred euros. After a few months, Xrother won the bid and I could invoice and collect €15.000. Not too bad.

The key is being value-centred

Despite the elusive meaning of value in some situations, it was the key to this success story. The agreement with Xrother was so easy to reach and valuable at the same time because it started by putting value front and center. It started by asking: what’s valuable for Xrother? Was it the time I’d have spent working on their proposal? Was it a given number of working days? Was it the guarantee to work in their offices, so to rest assured I’d have worked for real? No. Value for them in that context was about winning the tender and nothing else. That had to be obtained and that had to be protected in our deal.

Keeping this in mind, the exit criteria for the collaboration was sharp, objective and clear: either we win the tender or we don’t. Either we created value or not. That’s it. My effort trying to help them win the tender was worth a few bucks, paid unconditionally. My compensation for having helped win the tender was not a sure shot, but still clear. The proposal was worth millions of Euro for Xrother and, once secured due to that, legitimately worth, a 0.5% share of that value for me.

Here’s how this applies to you: for knowledge workers, we can state that, in general, the cost of our work is not its value. While we are used to buying goods and services with no awareness of their cost for the supplying firms—do you really know how much the cost was for producing your last dishwasher?—all of a sudden knowledge work is the domain in which you hear saying “it only takes 1 hour, you can’t charge that much!” and that happens because knowledge workers are terrible at making a distinction between “cost”, “value” and “price”. Keeping this distinction alive throughout all the steps of our negotiations is a must and Extreme Contracts lovers call this principle being Value Centred.

The value of my work for Xrother was seven-figure. The cost of my work was my own business and no evaluation of this should have entered my conversation with Xrother. The price of my work, taking into account the uncertain nature of our goal, had to reflect this uncertainty and was split into two parts, featuring different sizes and probability to pay. We kept the negotiation value-centered and we happily worked together toward success.

Think of your next contract or the one you are negotiating right now. How would you clarify the value for your customer, and therefore the value of your contribution?

About Jacopo Romei

Jacopo is an independent strategy consultant, with a strong background in Agile product development.

Jacopo is also an entrepreneur & writer. After having founded a couple of IT companies and practiced agile software development, he started as a full-time freelance agile coach, coaching teams in Italy, Germany and UK.

He has worked with eBay Italia team to set their agile process up. Product ownership and agile UX are added skills acquired in the field.

As a writer, Jacopo published a couple of books on agile coding practices and the Italian version of “Extreme Contracts: knowledge work from negotiation to collaboration“.

Jacopo is a frequent public speaker in international conferences and events about how the way of working is changing in the software industry and organizations management.

Susanne Taylor: The critical ingredient you might be missing to move your Scrum team from micro-management to self-organization

Working with a team of leaders, Susanne was facing a tough situation. The team was not able to collaborate. When investigating the situation, listening to the team members, and doing her own reflection, she realized what the problem was. In this episode, we talk about a critical need for teams to successfully self-organize, and how the move from micro-management to self-organization is a multistep journey.

Featured Book for the Week: Yes to the Mess: Surprising Leadership Lessons from Jazz

In Yes to the Mess: Surprising Leadership Lessons from Jazz by Frank J. Barrett, Susanne learned to recognize the importance of having a clear framework for the team, but also letting the team members build on each other’s contribution. She learned that, once you have the right constraints in place, the team has an easier time being creative and clear in their decisions.

About Susanne Taylor

Susanne is a transition coach, which translates to roles as: change management facilitator, organizational development consultant, scrum master, agile coach and community manager. (Often simultaneously.) Susanne has learned to be adaptable and resilient after having lived in Alaska, Japan, Taiwan and now Germany. She is passionate about accompanying people on journeys of transformation. (And she considers herself an introvert.)

You can link with Susanne Taylor on LinkedIn and connect with Susanne Taylor on Twitter.

Susanne Taylor: Organization change techniques you can apply in your Scrum team

This organization was proud of their achievements. However, their culture was not allowing them to collaborate, and move the organization to the next stage. That move was critical for them to survive a changing market.

In this episode, we discuss a non-conventional way to approach organizational change, and how that helped this particular organization. Listen in, to learn about why that approach worked and how you can apply that approach in your Scrum team.

About Susanne Taylor

Susanne is a transition coach, which translates to roles as: change management facilitator, organizational development consultant, scrum master, agile coach and community manager. (Often simultaneously.) Susanne has learned to be adaptable and resilient after having lived in Alaska, Japan, Taiwan and now Germany. She is passionate about accompanying people on journeys of transformation. (And she considers herself an introvert.)

You can link with Susanne Taylor on LinkedIn and connect with Susanne Taylor on Twitter.

Susanne Taylor: The dangers and the losses from over-planning and how to overcome those

When organizations bring people together in a team and then add a “planning” factor on top of them to “steer” them in the right direction, they might be losing the most powerful contribution of a team.

In this episode, we discuss what Susanne learned from a situation where she overplanned things, and did not give the team enough freedom and space to bring in their skills and knowledge. A brilliant reminder that we, as Scrum Masters, must focus on the team, not the work! Let the team focus on the work, while you focus on the team.

About Susanne Taylor

Susanne is a transition coach, which translates to roles as: change management facilitator, organizational development consultant, scrum master, agile coach and community manager. (Often simultaneously.) Susanne has learned to be adaptable and resilient after having lived in Alaska, Japan, Taiwan and now Germany. She is passionate about accompanying people on journeys of transformation. (And she considers herself an introvert.)

You can link with Susanne Taylor on LinkedIn and connect with Susanne Taylor on Twitter.

Izis Filipaldi: What makes the Proxy Product Owner as a success pattern?

Although Proxy Product Owners may be an anti-pattern, there are cases in which that ability to be a bridge and translate the customer requirements will help the team. 

We also talk about the case of the PO that needed to learn to speak the team’s language.

The Great Product Owner: The translator Product Owner Proxy

It’s easy to be tempted to hire a very experienced Product Owner. However, in some situations, what the team needs is a hard-working Product Owner with a good understanding of technology, to help translate user/customer requirements into small enough stories. In this segment, we talk about the newbie PO, that was technical-minded and was able to translate the customer requirements in a way that helped the team.

The Bad Product Owner: The business PO, who did not speak User Story-language

When a Product Owner joins a team, and has little knowledge of the product, the team may need to step in and help the Product Owner. However, that help can detract from the PO’s need and ability to learn the product. In this segment, we discuss such a case, and how Izis was able to help that Product Owner step up and take on more responsibility.

Are you having trouble helping the team working well with their Product Owner? We’ve put together a course to help you work on the collaboration team-product owner. You can find it at: bit.ly/coachyourpo. 18 modules, 8+ hours of modules with tools and techniques that you can use to help teams and PO’s collaborate.

About Izis Filipaldi

Izis’ mission is to help people to improve their knowledge and professional value inside organizations, applying the agile way of working. She has been working as an Agile Coach for more than 7 years, helping people to deliver products, developing an environment free of judgments where they can fail fast and learn faster. Continuous improvement of: people knowledge, product delivery, and work environment, are her 3 main focus on work. And she loves what she does!

You can link with Izis Filipaldi on LinkedIn and connect with Izis Filipaldi on Twitter.

Izis Filipaldi: The importance of action points as an Agile Retrospective outcome

As Scrum Masters, we aim to help teams progress in their ability to deliver value. However, it is important that we ask a few questions about the team behavior when reflecting on our own performance. We discuss some of the questions that Scrum Masters can ask to assess their own impact on the teams they serve.

Featured Retrospective Format for the Week: Focusing on action points

Although Izis prefers to use the 3-question retrospective format, she tends to not follow that format strictly. In this segment, we also discuss the importance of having a strong focus on defining and following-up on the action points from retrospectives.

About Izis Filipaldi

Izis’ mission is to help people to improve their knowledge and professional value inside organizations, applying the agile way of working. She has been working as an Agile Coach for more than 7 years, helping people to deliver products, developing an environment free of judgments where they can fail fast and learn faster. Continuous improvement of: people knowledge, product delivery, and work environment, are her 3 main focus on work. And she loves what she does!

You can link with Izis Filipaldi on LinkedIn and connect with Izis Filipaldi on Twitter.

Izis Filipaldi: Scaling the Scrum Master role

Scaling the use of Scrum in any organization is not easy. In this episode, we discuss Izis approach to that challenge from the Scrum Master perspective. Scrum Masters in larger organizations end up having to work with multiple teams. We explore an approach that may help Scrum Masters serve more teams, while amplifying their impact. 

About Izis Filipaldi

Izis’ mission is to help people to improve their knowledge and professional value inside organizations, applying the agile way of working. She has been working as an Agile Coach for more than 7 years, helping people to deliver products, developing an environment free of judgments where they can fail fast and learn faster. Continuous improvement of: people knowledge, product delivery, and work environment, are her 3 main focus on work. And she loves what she does!

You can link with Izis Filipaldi on LinkedIn and connect with Izis Filipaldi on Twitter

Izis Filipaldi: The new role of leaders in Agile teams

In Agile teams, Leadership has a different role. In this episode, we talk about the traditional approach to leadership in teams. From the technical lead to the line manager, and how those roles should change to enable Agile teams. 

Featured Book for the Week: How to Win Friends and Influence People, by Dale Carnegie

In How to Win Friends and Influence People, by Dale Carnegie, Izis found a set of tools that help her in her daily work as a Scrum Master. The book was written in the 1930’s, on the back of the Great Depression, and shares some of the techniques that successful people used to achieve in their lives. Dale goes through many of those techniques and outlines simple approaches that can help Scrum Masters also achieve their goals and help their teams. 

About Izis Filipaldi

Izis’ mission is to help people to improve their knowledge and professional value inside organizations, applying the agile way of working. She has been working as an Agile Coach for more than 7 years, helping people to deliver products, developing an environment free of judgments where they can fail fast and learn faster. Continuous improvement of: people knowledge, product delivery, and work environment, are her 3 main focus on work. And she loves what she does!

You can link with Izis Filipaldi on LinkedIn and connect with Izis Filipaldi on Twitter.

Izis Filipaldi: The signs that your Agile Transformation is about to fail

Some Agile transformations are doomed to failure. In this episode, we talk about the signs that indicate when Agile is not likely to be adopted in an organization.

We also talk about the importance for Scrum Masters to work at different levels of the organization, not only at the team level.

About Izis Filipaldi

Izis’ mission is to help people to improve their knowledge and professional value inside organizations, applying the agile way of working. She has been working as an Agile Coach for more than 7 years, helping people to deliver products, developing an environment free of judgments where they can fail fast and learn faster. Continuous improvement of: people knowledge, product delivery, and work environment, are her 3 main focus on work. And she loves what she does!

You can link with Izis Filipaldi on LinkedIn and connect with Izis Filipaldi on Twitter.

BONUS: Does Agile play well in Leadership teams in organizations? – Diana Larsen and Jutta Eckstein

Diana and I were kicking around a few topics for this episode, and we ended up selecting “Agile and Leadership, friends or foes?” The idea is to talk about how Agile and Leadership play together (or not)

In this episode, we talk with Diana Larsen and Jutta Eckstein about what problems Leaders try to fix with Agile, what challenges they have when they try to adopt Agile, and we will do this with the focus on the Scrum Master role, and what they can do by working with the leaders of the organizations they work within.

Let’s start by defining some of the major challenges we see happening out there.

The 3 biggest challenges on how Agile plays (or not) with Leadership

Some of the challenges we mention in this episode are not new. You are probably familiar with many of them. We talk about how Agile requires us to think about leadership as a distributed responsibility that team members need to take on, which is itself a major challenge for Scrum Masters as they help their teams understand what that means in practice. 

We also discuss how important it is to understand that leadership is not simply a “role”, but also something we need to earn, including Scrum Masters.

Finally, we talk about the important role that leaders play for the teams they work with. Specifically in setting the direction that helps the teams adopt quicker processes like Hypothesis-Driven-Development, for example.

How Scrum Masters can cope with these challenges

We then discuss how Scrum Masters can understand, and learn to cope with these challenges. Not surprisingly, Agile Retrospectives come up as a critical tool for Scrum Masters to use when working with teams and their leaders. 

Regarding collaboration with leaders, we discuss how Scrum Masters can help teams focus on the right goals, which need to be defined in cooperation with leaders in the organization.

But there’s a second tool we discuss that complements perfectly the work we do with the retrospectives and helps the teams and leaders understand where they can contribute the most: visualization as a way to establish a shared context.

Do Scrum Masters really need to protect the team from their leaders? 

Stop me if you have heard this one before. Way back when I was taught that Scrum Masters need to protect the team from interference. Although it made sense to me at the time, with the passing of time, and after collecting more than a decade of experience, I have come to value a different approach. 

In this segment, we talk about the need (or not) to protect the team from Leadership interference. 

The goal, of course, is to generate a real collaboration between the team and the leaders in the organization.

The key resources on leadership and Scrum by Diana Larsen, Jutta Eckstein and Vasco Duarte

Given that leadership, and the collaboration between teams and leaders is a critical topic for Scrum Masters, we discuss some of the resources (books, podcasts, articles) we’ve found useful and informative on how to tackle that collaboration. 

Here are the resources we mention: 

 

How about you? What have been your major challenges when working with leaders in your organization? Leave a comment below and share the tools/books/podcasts you’ve found useful. 

About Diana Larsen and Jutta Eckstein

Diana Larsen co-founded and collaborates in leadership of Agile Fluency™ Project. Diana co-authored the books Agile Retrospectives: Making Good Teams Great; Liftoff: Start and Sustain Successful Agile Teams; Five Rules for Accelerated Learning; and the seminal “Agile Fluency Model: A Brief Guide to Success with Agile” article.

You can link with Diana Larsen on LinkedIn and connect with Diana Larsen on Twitter

 

Jutta Eckstein works as an independent coach & consultant. 

As a developer, she started with XP in 97/98, started scaling agile in 2001 (and published about that in 2004), and am now Jutta focuses on company-wide agility.

You can link with Jutta Eckstein on LinkedIn and connect with Jutta Eckstein on Twitter

You can learn more at Jutta Eckstein’s website, and check out Jutta’s books on Amazon and LeanPub.

Jutta’s Agile Bossanova book is available here.