Scrum Talent Management

1. Course Introduction: Hi everyone. My name is Will Jeffrey and welcome to my course. I had been a certified agile coach and professional Agile trainer for multi-discipline teams. I've been teaching them for more than 15 years how to work smarter together. My workshops, Dr. ground-up collaboration for much better and more integrated results. I'm happy to help you improve and do what you love. As enjoy Kumar Molly said, if you realize that an employee is highly talented and valuable just after their resignation, there is a big problem in your talent management process. Kindly fix it. It is crucial to design and to find the right performance management system that supports your business objectives and encourages the development of each individual employee. This course shows in a practical way how you can measure and improve the performance of Scrum team and how to achieve and implement a culture of performance management at the organization level. This course is designed for everyone who needs knowledge of managing performance in an agile environment. This includes everyone working in a Scrum Team, Scrum Masters, product owners and developers, and also HR generalists at all levels of their careers, as well as specialists who focus on performance and compensation and all managers from all functions who have to manage performance of Agile teams. I hope you will find this course helpful in your Agile journey. 2. A New Era in Performance Management: Learn how to re-invent performance management by replacing the ineffective, traditional annual process with a simpler one focused on critical outcomes like feedback, coaching, goal setting, and manager and employee relationships. Join leading organizations that are scrapping their annual evaluation cycle and replacing it with this new model. According to Deloitte University Press Human Capital Trends Report 2015, the performance review was conceived at the turn of the 19th century. At the time, employees were viewed strictly as workers whose performance could be accurately measured by output, number of railroad ties installed, hours worked. Other numeric measures. Today, more than 70% of all employees work in service or knowledge related jobs. Their performance is driven by their skills, attitude, and by their ability to innovate and drive change through Teams. These skills must be built over time and performance management that is successful. We'll be focused on constantly developing these capabilities rather than ranking them at a moment in time. In his book, Think again, Adam Grant rights. Leaders commonly say, we only hire a players. We don't tolerate the players. The reality is that the players can become a players if you treat them in a way that makes them feel truly grateful. Today's business climate and priorities seldom follow the annual evaluation cycle. Goals shift, strategies evolve, and employees often switch between multiple projects under various team leaders. The Agile movement has permeated business, changing how companies set goals and manage people. Agile performance management creates a player's through a continuous cycle of positive interactions among employees, managers and executives. Coaching and collaboration between manager and employee. Observing and highlighting the right behaviors. Recognizing the best actions, values, and attitudes immediately and publicly. Building community and belonging. All of these interactions required trusted two-way human connections. Pretty much the opposite of the old command and control idea, in which a manager writes a yearly backward-looking assessment of how the employee is doing. Continuous, meaningful conversations among managers, peers, and executives provide a new model for the human workplace. Agile performance management is designed for the New World of Work. It shifts the focus from annual evaluation and rankings to continuous feedback and development. It is more collaborative, social and faster moving. This course provides tools for how to think about and conduct performance management in this new, more agile way. It will support you as you begin to make the case for this change in your own organizations. 3. Performance at the Scrum Team Level: Scrum drives us toward enacting the first principle of the Agile Manifesto. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software. We are invited to look for ways to actually deliver value. Although value in itself is hard to quantify, we can absolutely measure to improve how we effectively deliver it. In the past project driven world, success was achieved if a completely defined set of features and functions was designed and delivered on time and start preset budget. Practitioners worldwide made Scrum the most preferred definition of agile. Shifting our focus to our products is a definition of Scrum. Scrum. Now, a simple framework for complex product delivery. A simple framework for addressing complex problems. When iterative, incrementally evolving a product with Scrum, the project criteria for success no longer apply, if ever they did. We consider what value is, what valuable product versions are, and how to know whether we are actually delivering value. 4. Inspect to Adapt: If our ability to deliver value defined success, how to assess success? Value is not a straightforward characteristic of a product like footprint, size, or weight. Value cannot be reduced to one parameter only. Like money. Value cannot be predicted during product creation as it needs to be validated upon releasing. Value is reflected in the impact of a product. Value is in the outcome of our work. Team's productivity is not an indicator of value. The ability to produce large amounts of product is not a guarantee of value. Value is not in volume. We need to measure at least one level up. We need key value areas, kVA, to inspect and determine whether we are actually delivering value. More to come later. Scrum implements empiricism to increase in organizations agility. We inspect in order to adapt an organization's work outcomes, the best place to look to determine whether or not it's delivering value. These observations should then inform the organization on how to optimize the way the product is created and maintained. An empirical management approach requires inspection and adaptation on value. The kVA is indicate whether value is delivered or not. If not, are not as expected, a closer look as needed at how the value is tentatively produced, the processes, practices, and tools being applied. Every sprint is an investment in an observable outcome new product increment. Every sprint Review offers an opportunity to assess whether value is being delivered through observation, business hypotheses are validated for negated with the option of potentially radically changing course or direction in-between sprints as the increment been released? Or does it have all the qualities to be releasable? How much value has the team potentially delivered during the sprint? We move away from judging individuals for hours spent on tasks and instead drive the improvement of the working environment forward. Our purpose is to identify and align with the highest value to work towards next. 5. Don't Obsess on Velocity: Managers make wrong assumptions about velocity and don't know its real purpose. Let's hear from a scrum master. At work, my management tracks team velocity as a performance objective. My team has recently started working on new complex and critical work, but team velocity has gone down from what was it before. As it is a critical piece of work management has provided three more people in the last sprint, but still velocity has not improved. On the worst side, it has gone down. I have my annual performance review tomorrow, I'm afraid it is not going to be good. What should I do? Velocity is one of the tools for the scrum team to self-organize itself. It is an average amount of work that the team can turn into done during a sprint. Velocity is calculated by dividing amount of done work by number of sprints. Story point is widely used estimation metrics. For example, if a team has delivered 30 done measure of work in three sprints, the velocity is 10. Team velocity is a helpful tool for the scrum team. It helps three roles in the following ways. Development Team and sprint planning to identify how much work they can pull from the product backlog. Generally, the team uses empirical evidence from the previous sprints and creates a target velocity. It also helps teams in their own inspection and identifying continuous improvement actions to increase velocity without compromising quality. Product owner. In release planning and managing stakeholders expectations, he or she uses the historical average to create future projections. For example, the velocity is 10 in there, 100 points worth of work. Then the product owner can apply simple mathematics to come to a figure of ten sprints to complete the work. However, a good P0 will make sure that stakeholders slash customers are aware that it is still an estimated projection and we'll include this risk into his or her communications. Scrum Master. Velocity gives scrum master some aspects that should be made transparent to the team so that they can inspect and adapt. Remember it as Scrum Masters responsibility to make the team more productive. Using velocity data. The Scrum Master can build some insights that will help the team to be more productive. Velocity is helpful, but we don't want to remember that the velocity is not a measure of value. Management's obsession with velocity can lead to unnecessary stress. Over time. We can workings conflicts. This going to affect team members mental health. Velocity is a very good tool. But if not used correctly, this good tool can become a detriment to a team's morale and can also build some bad practices such as gaming the numbers. This reduces transparency. Without transparency, inspection can't be right and the right adaptation can't be done. In a nutshell, empiricism is lost. Without empiricism, Scrum fails. Everyone must understand that velocity is only valuable when it is used only by the Scrum team with its intended usage. This is not a measure for performance management. Agile ways of working are about delivering value and make the workplace more enjoyable and happier by having motivated and empowered people. 6. Key Value Area (KVA): The ability to deliver value is typically reflected in a combination of parameters, like the capability to regularly satisfy an empress users and consumers at a reasonable cost and a positive financial return for the organization in a sustainable and enjoyable way for those creating and sustaining the product. This converts into indicators to measure and evaluate this capability. How to do that in Scrum projects? Evidence-based management, EBM is a framework created by scrum.org To help scrum team measure, manage, and increase the value they derived from their product delivery. Evm looks at four key value areas. Defined measures will vary by organization, but all four areas contributed to an organization's ability to deliver business value. For key value areas for Scrum, our current value, unrealized value, ability to innovate and time to market. We're going to detail each one of those values in the following sections. 7. KVA - Current Value: The first kVA as current value. The purpose of looking at current value is to understand the value that an organization delivers to customers and stakeholders at the present time, it considers only what exists right now, not the value that might exist in the future. Questions that organizations need to continually re-evaluate for currentValue are. One, how happy or users and customers today is their happiness improving or declining? To how happy you are your employees today? Is their happiness improving or declining? Three, how happy or your investors and other stakeholders today, is their happiness improving or declining? Considering current value helps an organization understand the value that their customers or users experienced today. Let's illustrate this with an example. While profit, one way to measure investor happiness, will tell you the economic impact of the value that you deliver. Knowing whether customers are happy with their purchase will tell you more about where you may need to improve to keep those customers. If your customers have few alternatives to your product, you may have high profit even though customer satisfaction is low. Considering current value from several perspectives will give you a better understanding of your challenges and opportunities. Customer happiness and investor happiness also do not tell the whole story about your ability to deliver value. Considering employee attitudes recognizes that employees are ultimately the producers of value. Engaged employees that know how to maintain, sustain, and enhance the product are one of the most significant assets of an organization. And happy employees are more engaged and productive. 8. KVA - Unrealized Value: The second caveat is unrealized value. The potential future value that could be realized if the organization met the needs of all potential customers or users. Looking at unrealized value helps an organization to maximize the value that it realizes from a product or service over time. When customers, users, or clients experience a gap between their current experience and the experience that they would like to have. The difference between the two represents an opportunity. This opportunity is measured by unrealized value. Questions that organizations need to continually re-evaluate for unrealized value R. One. Can any additional value be created by our organization in this market or other markets? Too? Is it worth the effort and risk to pursue these untapped opportunities? Three, should further investments be made to capture additional unrealized value. The consideration of both current value and unrealized value provides organizations with a way to balance present and possible future benefits. Strategic goals are formed from some satisfaction gap and an opportunity for an organization to decrease unrealized value by increasing current value. Let's discuss it. A product may have low current value because it is an early version being used to test the market. But very high unrealized value, indicating that there is great market potential. Investing in the product to try to boost current value is probably warranted given the potential returns, even though the product is not currently producing high current value. Conversely, a product with very high current value, large market share, no near competitors and very satisfied customers may not want much new investment. This is the classic cash cow product that is very profitable. But nearing the end of its product investment cycle with low unrealized value. 9. KVA - Ability to Innovate: The third kVA is ability to innovate the effectiveness of an organization to deliver new capabilities that might better meet customer needs. The goal of looking at the ability to innovate is to maximize the organization's ability to deliver new capabilities and innovative solutions. Organizations should continually re-evaluate their ability to innovate by asking one, what prevents the organization from delivering new value? To? What prevents customers or users from benefiting from that innovation. Improving ability to innovate helps an organization become more effective in ensuring that the work that it does improves the value, that is, products or services delivered to customers or users. A variety of things can impede an organization from being able to deliver new capabilities and value. Spending too much time remedying poor product quality. Needing to maintain multiple variations of a product due to lack of operational excellence, lack of decentralized decision-making, and ability to hire and inspire talented, passionate team members and so on. As low value of features and systemic impediments accumulate, more budget and time is consumed maintaining the product or overcoming impediments, reducing its available capacity to innovate. In addition, anything that prevents users or customers from benefiting from innovation, such as hard to assemble slash install products or new versions of products will also reduce ability to innovate. 10. KVA - Time to Market: The last kVA is time to market the organization's ability to quickly deliver new capabilities, services, or products. The reason for looking at time to market is to minimize the amount of time it takes for the organization to deliver value without actively managing time to market. The ability to sustainably deliver value in the future is unknown. Questions that organizations need to continually re-evaluate for time-to-market are. One. How fast can the organization learn from new experiments and information? To how fast can you adapt based on the information? Three, how fast can you test new ideas with customers? Improving time to market helps improve the frequency at which an organization can potentially change current value. Reducing the number of features in our product release can dramatically improve time to market. The smallest release possible is one that delivers at least some incremental improvement in value to some subset of the customers slash users of the product. Many organizations also focus on removing non-value added activities from the product development and delivery process to improve their time to market. 11. KVA - Summary: And recap. Here are the four key value areas for Scrum. Current value measures value delivered to customer or user today. Unrealized value measures value that could be realized by meeting all potential needs of the customer or user. Ability to innovate measures the ability to deliver a new capability that might better serve a customer or user need. Time to market, measures the ability to quickly deliver new capabilities, service or product. How can we make them work together? The first step in the journey toward a strategic goal is understanding your current state. If your focus is to achieve a strategic goal related to unrealized value, as is typically the case. Then measuring the current value your product or service delivers is where you should start. Of course, if your product or service is new, then its current value will be 0. To understand where you need to improve, you may also need to understand your effectiveness, ability to improve, and your responsiveness. Time-to-market. All knowledge is imperfect and incomplete. The exact figures are less important. A set of metrics is important. The evolution of the metrics is important. All indicators are updated and check regularly, revealing patterns and trends. The insights gained from measuring into valuable organizational optimizations count the most 12. Engagement is Key: Engagement is the most ignored aspect of value, yet one where huge gains can be made to increase the ability to deliver value. Imagine a situation with a high customer satisfaction rate and high financial return. How sustainable is that when your organization also has a high rate of absenteeism, what happens when the product creation people suffer from physical and mental burnout or when they ultimately leave. These problems are further compounded by the difficulty of attracting new talent. Scrum has the potential to create better products while humanizing the workplace. Build on your experience with Scrum for your product development activities to inject empiricism in your managerial practice. Improve your ability to deliver value. Stop trying to control individuals, manage using the boundaries of the Scrum framework. Foster a sustainable environment of creativity, mastery, and connectedness. Focus on the unusual suspect first, team engagement. Engagement is the key to unlock an increase in customer satisfaction and financial benefits. Employees who are engaged actually care a lot more about customer outcomes and profitability. 13. Adapt: Adapting the performance management process to match this way of working. Foot include sprint or project-based performance reviews led by managers. Using a purpose-built platform gives team leads the flexibility and power to set up reviews on an as needed basis in minutes, eliminating hassle, requesting feedback at the end of a sprint. The best people to receive feedback from our those you work with most closely, allow your employees to take ownership of their development, giving them the ability to request feedback from their team members, either during the official review or on an ad hoc basis. Real-time feedback, agile teams present a unique opportunity for upskilling and growing your talent organically. Make the most out of this by facilitating the exchange of real-time feedback outside of performance reviews, colleagues can share praises and tips with each other at anytime, increasing opportunities to learn. As teams share and gather feedback on a more regular basis. This also gives you better insights into how teams are performing across the organization. You will also be able to see patterns emerge on how teams impact one another. Meanwhile, gathering more frequent performance feedback allows managers to make their teams more efficient and get the most out of individual contributors. As is the point with running retrospectives. To ensure these habits become ingrained across teams. This should start at the top. Great scrum masters regularly ask their teams for feedback after retrospectives to see how they can be improved. Leading by example helps show the rest of the team It's okay to ask for and receive feedback. 14. Performance Appraisals in Scrum: After adopting Scrum, any organizations continue doing performance appraisals using their traditional methods. For example, stack ranking employees or curve based ratings. In these systems, like back in college, the employer generally sets the number of a, b, c's, et cetera, to assign to the employee's performance. These competition based approaches might be effective in certain job contexts. For example, within sales team. But within software teams, they undermine the teamwork and collaboration that are the foundation of team effectiveness. It is not uncommon to see a development team shift from a we mindset. Do Amy versus new mindset in the month or two leading up to performance appraisals with a corresponding decrease in overall team performance. This is particularly unfortunately, since the goal of doing these appraisals is to improve results, the most successful organizations evolve their approach to evaluating and rewarding employee performance as part of their adoption of Scrum, the goal is to shift the evaluation and rewards away from a competitive model and towards a more collaborative one. Let's see an example. 50% of each employee's individual performance appraisal is based on the team's overall performance. The other 50 percent is based on the employee's individual performance. Half of that rating comes from the employee's manager and the other half from ratings given by teammates. This approach puts a strong focus on the overall team performance and on recognizing team contribution as opposed to encouraging competition between teammates. 15. Performance at the Organization Level: Traditional organizations designed primarily for stability that involve a static siloed structural hierarchy. Goals and decision rights flow downward with the most powerful governance bodies at the top. These organizations operate through linear planning and control to capture value for shareholders. Although such a structure can be strong, it is often rigid and slow moving. In contrast, agile organizations are designed for both stability and dynamism. They are made up of a network of teams within a people-centered culture that features rapid learning and fast decisions cycles enabled by technology and guided by a powerful common purpose to co-create value for all stakeholders. Such agile operating models allow for quick and efficient reconfigurations of strategy structure processes, people and technology toward value creating. The acronym VUCA, volatile, uncertain, complex, and ambiguous, was coined in the 1990s. It represents the experience of many people in their workplaces extremely well. In this kind of climate, it can be hard to feel like you are surviving, let alone thriving. And such challenging context at the organizations at velocity and adaptability to stability, creating a critical source of competitive advantage. According to McKinsey, five trademarks distinguish these organizations. A Northstar embodied across the organization. Leadership sets broad direction and priorities against which teams Dean their own objectives. Iterating at pace. A network of empowered teams, flat organizational structure with limited hierarchy and no middle-management. Empowered and autonomous teams with end-to-end accountability and clear purpose. Rapid decision and learning cycles. Risk-taking, failing, and learning faster encouraged, continuous people development aimed at improving the level of performance. A dynamic people model that ignites passion, culture that empowers the agile way of working. Craftsmanship II, development of expertise as a cornerstone. Next-generation enabling technology. Performance management isn't materially different just because of enabling tech. 16. Tribe Model Management: Before going further, we need to define what the model management is. Tribe model management is part of an Agile scaling strategy, first used to help Spotify's growing Development Department. The approach involves breaking engineering teams into autonomous squads that work together on specific aspects of the product. Cerebral squads working in the same business area. Search technology, for example, are then grouped into a larger team called a tribe. What are the main components of tribe model management? Spotify's trive engineering model includes several components, including a squad that is the smallest unit of development in the tribe model. Squads consists of a group of engineers who work closely together on a specific area of the product. They are designed to be autonomous teams that can have broad business objectives and can release products to the market whenever they are ready. A tribe is a collection of squads grouped by a common business focus. For example, a tribe for Spotify and might include a group of squads working on the mobile version of the music player chapter. A chapter is a small group of developers within a tribe, but who work across different squads. These are often developers who have similar skills, but who were using them to work on slightly different aspects of the product. Let's see guild now, while chapters are always confined to a single tribe, a guild as a broader community that can include members in multiple tribes. What unites the members of a guild is an interest in sharing knowledge, best practices, and tools. When does tribe model management makes sense for an organization? For an organization to consider implementing the tri modal framework, it must first be prepared to adopt an agile product management strategy. The organization must be willing to work iteratively, updating and releasing product functionality regularly and adjusting based on feedback from the market. Another reason an organization would consider tribe model management is that the company is large or growing rapidly. Therefore, Spotify develop its model of squads and tribes after it had built out dozens of engineering teams, the company designed its tribe model based on the famous Dunbar number. According to this concept developed by anthropologist robin Dunbar, people can maintain stable social relationships with only about 150 people. Spotify designed It's tribes to include no more than 100 people. If your organization or engineering department is small, the tribe model might not make sense for your team. What are the benefits of the tribe model? The tribe model can help a growing organization develop autonomy, concentrate expertise where it is most valuable, and speed product development. By rolling out a tribe engineering model, a product organization can realize several benefits, such as shortened time to product release and updates. Improved domain expertise in each area of a product or a portfolio. Minimize dependencies. Production of unnecessary processes, increased transparency and accountability, and enhanced opportunities for innovation and creative problem-solving. 17. 3 Changes for Agile Organizations: Performance management is tough enough in traditional organizations. In agile organizations, three changes are essential to success. The evidence is clear. A small number of priority practices make the difference between an effective and fair performance management approach and one that falls short. Organizations that Lincoln Floyd goals to business priorities, invest in managers capabilities and differentiate rewards for the extremes of performance. 84% more likely to have performance management approaches that their employees perceive and recognize as being fair. Furthermore, these practices are mutually reinforcing, implementing one practice well can have a positive effect on the performance of others. Which leads to positive impact on employee and organizational performance, which in turn drives organizations to outperform peers. But how did these priority practices work in the context of agile organizations, which feature networks have empowered teams and rely on a dynamic people model. Colleagues rightfully ask a number of related questions. Why do I need individual goals when the locus of organizational performance is my squad, chapter and tribe. Who will coach and evaluate me when I have no boss. How can I evaluate or understand my performance when he or she doesn't see my workday today. How can we maintain a team spirit while still fairly differentiating the highest and lowest performing colleagues. The good news is that there are answers to these questions. And going further, agility can be a springboard to improve performance management practices that traditional organizations struggle with. Nearly all organizations, for example, feel the need for more frequent feedback. Working in agile sprints of a few weeks each creates a cadence into which collective and individual feedback naturally fits. Similarly, a culture of more autonomy and risk-taking opens opportunities for employees to stretch, take on more responsibility, and find out quickly how they can improve. Mckinsey has identified three practices that correlate most closely with the key factor of performance management effectiveness, the perceived fairness of the system. The first practice of the three, linking individual employee's performance goals to business priorities not only correlates with a higher level of perceived fairness, but also helps companies achieve their strategic goals. The second practice is investing in managers coaching skills. Not only that, effective coaching is the strongest driver of perceived fairness, but also that there is a direct relationship between effective managers and the effectiveness of a company's performance management system. The third practice is differentiating consequences. Differentiate individual contribution to team performance based on desired values, mindsets, and behaviors. Agile organizations will however, need to adapt each of three core performance management practices to make the recommendations actionable in the agile operating model. These adaptations are discussed in the following sections of this course. 18. #1 Goals & Business Priorities: Transparently linking employee's goals to business priorities and maintaining a strong element of flexibility or core practices of agile ways of working. They are also significant practices if employees are to have a sense of meaning and purpose in their work. But agile organizations may worry about how the emphasis on individual goals marries with the autonomous teams that characterize agility. There are three approaches that can help agile organizations to adapt and ensure that goals remain meaningful and linked to business priorities. The first approach is introduced team objectives in addition to or instead of individual targets. The second one is its objectives as a team, discuss results frequently, and pivot as required. And finally, create transparency of targets and performance. Let's take a look at them. 19. #1.1 Introduce Team Objectives: Introducing team objectives in addition to or instead of individual targets. Empowered and autonomous teams are central to agility. It therefore makes little sense to manage performance solely, or even primarily on an individual level. Successful agile organizations focus on team performance, setting goals and evaluating performance, often allowing teams to define their own goals to drive ownership. At one bank, for example, performance objectives are a combination of team goals, individual contributions to the team, mastery of competencies required at the level of individual jobs, and alignment of professional behavior to the banks values. The weighting of these components varies by role. With specialists in particular, more inclined towards team performance to encourage collaboration. And other financial institution experimented with replacing individual objectives in contact centers with team objectives. Within a few months and saw productivity gains of more than 10 percent compared with control group centers. In addition to a noticeable increase in teamwork and cohesion. 20. #1.2 Set Objectives as a Team: Setting objectives as a team, discuss results frequently, and pivot as required. Teams in agile organizations work autonomously and at pace with a clear focus on output. They follow broadly set directions and strategic priorities rather than detailed top-down instructions. Agile organizations typically rely on a tightly run process, often quarterly business review, QBR to ensure alignment among the autonomous teams. This is where Objectives and Key Results OKRs popularized at Intel in the 1970s and now used in many organizations. The Bill and Melinda Gates Foundation to Google come in every quarter. A clear cascade from strategic priorities. Two objectives at the team level is created, while performance versus Key Results is made transparent and disgust. To allow for changing priorities coming out of the QBR, team and individual objectives need to be dynamic rather than fixed in a once a year exercise. Setting objectives collectively can have other benefits too, particularly with regard to engagement and ambition. Unsurprisingly, commitment to goals that you have set for yourself is typically stronger than to those set for you by others. And B2B sales organization, shifting to bottom-up goals setting versus top-down setting by executives resulted in 20 percent higher overall targets. An OKR objective sets out what we want to achieve. Okrs aren't enough though, because they miss out a vital element of strategic planning, the outcome. As such, their measures don't give Executive of view of whether investment initiatives or a value or not. Where people use OKRs to measure progress of explicit activities and deliverables. Pbms focuses on value, outcome and impacts. As previously explained, EBM has four key value areas, kVA, to describe the outcome. The outcome is described as a hypothesis. Importantly, at its strategic level, it represents an outcome that is worth investing in. Evm is a timely reminder that profitability and market survival in the 21st century isn't dependent on just current value, but also unrealized value and internal ability to improve, innovate and react to changing needs in an agile way. We're OKRs fail to provide an holistic perspective of product management and delivery performance. Pbms key value areas provide a balanced perspective of both customer facing and internal facing factors that support improvement in the face of ubiquitous disruptive change. 21. #1.2.1 Example: Let's illustrate why Agile organizations need to adapt their goals setting approach. Let's imagine that your organization decides to expand business in China. Executive Board sets goal to expand business into China, communicates strategic direction to Chapter and tribe leads. We will be in China next year. Then business expansion goals are assigned to one tribe. Tribe leads, provide feedback and further shape organization goal. We will achieve 150 sales in China by end of year, Jason will lead this project is assigned to chapters and squads. Tribe in Chapter leads translate project into tribe chapter and individual OKRs. We will have our office opened and our first customer in China by end of quarter. Mary will take care of opening office and John of business development. Then project is assigned to one squad. Product owners provide feedback and further shape tribe and chapter goals. Mary announced, we will open our first office by end of quarter. Product owners translate the project into OKRs. Tangible OKRs are set like we will hire 45 people in five functions, have regulatory requirements, risk management fulfilled, have an office space rented, and all IT infrastructure bought and set up by end of quarter. Chapter leads or product owners made with individuals to set goals. Assess individuals on the impact against business goals and desired behavioral attributes. For flow to work and Mano skilled teams, chapter leads meet with all part-time members to set goals. And for their cross-functional squad for opening the office, product owner mates with individual squad members, sales, government relations, supply chain, HR, IT to set goals. As shown in this example. The regular review of goals helps ensure that individuals in the organization continue to believe that the system is fair and also has a positive impact on performance management. 22. #1.3 Create Transparency: Create transparency of targets and performance. The decentralized nature of agile organizations creates a risk that devolution and, and empowerment might drift into chaos. One way to avoid this is to introduce extreme transparency of objectives and performance. At Google, all OKRs, starting with a CEO's, are visible to all other employees. At LinkedIn. The CEOs executive team reviews OKRs weekly. This kind of transparency also has several benefits. Surfacing interdependencies among teams and units, creating urgency and mindshare and reinforcing the non-hierarchical culture and mindset that characterized truly agile organizations. 23. #2 Manager Coaching Skills: Research shows that managers, typically line managers are important stewards of effective performance management. Investing in their coaching skills to help them become better arbiters of day-to-day fairness is often the most powerful intervention and performance management transformations. The Agile organization, however, challenges the traditional model of the line manager, who then acts as the day-to-day arbiter of fairness and whose capability needs to be built. Agile organizations can address these questions through three approaches. Clarify the roles that leaders play in development and evaluation. Focus on continuous feedback and ongoing development conversations. And frequently collected input from multiple sources when evaluating performance. 24. #2.1 Clarify the Learder Roles: Clarify the roles that leaders play in development and evaluation. In a prior section, we described three different types of managers in agile organizations. In the context of performance management, each performs different roles. Chapter leaders evaluate, promote, coach, and develop their people. Tribe leaders set directions linked to business priorities. Match the right people to opportunities or squads. Coach their teams on how to enable collaboration across organizational boundaries and empower people. Squad leaders strive to maintain a cohesive team by inspiring, coaching and providing feedback to everyone. 25. #2.2 Focus on Continuous Feedback: Focus on continuous feedback and ongoing development conversations. As in any organization, individuals in agile organizations develop through receiving feedback and being exposed to development opportunities. And successful agile organizations, feedback as the heartbeat and a culture of taking risks, failing fast and pursuing continuous personal development at all levels. These organizations encourage employees to ask for and give feedback constantly. The most valuable feedback is recognition that someone has just made a positive contribution to the work. Whether that's closing a great sale, streamlining of process, solving a problem or helping us struggling teammate. Any employee can recognize another as long as they are specific, publicly noting what someone did, why it matters and who benefits. Capture thousands of these moments in a database and you write a narrative of activity that is the real record how work gets done. Making this happen as often hard, managers and non-managers alike may need to overcome mindset and capability barriers to giving and receiving feedback more frequently, not just up and down the hierarchy, but also to peers. A European financial institution, for example, invested in dedicated capability building for teams on how to have courageous conversations in a pure like way. 26. #2.3 Collect From Multiple Sources: Frequently collect input from multiple sources when evaluating performance. The line manager has traditionally been the conduit for all information about the employee. But without the line manager who acts for the employee, miss requires a single person to gather feedback on an individual from several sources, synthesising it and working with other peers to make sure that evidence and decisions are calibrated. At Telco systems. For example, a chapter lead evaluates the development of an individual within the chapter. He gathers and synthesisers input from the product owner's team members and agile coaches that the individual has worked with. The chapter lead then presents the individual's case to a people Review Board made up of Chapter leads. The board makes a collective performance decision and provides advice to the individual on how to develop further, which is then relayed by the chapter lead. Technology can help here. A leading e-commerce player developed an app for its employees at facilitates feedback and allows employees to share feedback with others. After every interaction. The aim being for each employee to collect more than 200 feedback points during the year. 27. #3 Differentiating Consequences: Employees are more likely to view their performance management approaches fair if outcomes are differentiated, particularly at the two extremes of performance. In some ways that this can be harder and agile organizations at which collaborative and highly interdependent teams mean that it is difficult to trace results to individual efforts, to practices can help maintain differentiation and the accompanying sense of fairness without detracting from the Team Spirit. Differentiate individual contribution to team performance based on desired values, mindsets, and behaviors, and increase the emphasis on intrinsic motivation and non-monetary rewards. 28. #3.1 Individual Vs Team Performance: Differentiate individual contribution to team performance based on desired values, mindsets, and behaviors. Successful agile organizations embody agile methodologies and ways of working that are tangible and visible in day-to-day work. Less tangible. But our critical stable practice of Agile organizations is culture, the strong shared values, mindsets, and behaviors that underpin and enable those methodologies and ways of working. Successful agile organizations evaluate and manage performance of individuals, not just against hard targets, but also by the extent to which the individual has shown and live the desired values. Mindsets and behaviors. Potential rewards are consequences should be well aligned with these goals. In the case of a telco, for example, rewards for sales teams are based on achievement against individual and team targets, in addition to how well and how often employees offer coaching and mentoring to their team members. These contributions should be well codified and recognized because they both motivate individuals and create pull for the next opportunity. Conversely, organizations should make clear choices with employees who don't actively live and show the desired values, mindsets, and behaviors. As in the case of a FinTech company at which individuals not aligned with its core cultural values and define associated behaviors are simply let go. 29. #3.2 Emphasize Nonmonetary Rewards: Increase the emphasis on intrinsic motivation and non-monetary rewards. Work at most successful agile organizations is characterized by a sense of fulfillment and fun. It is common to hear employees describe how their daily activity does not feel like work. Netflix offers flexible benefits, such as unlimited vacation days. Employees stay because they are passionate about their work and the unique culture. While individuals expect to be paid fairly for their contributions, offering flexible benefits gives agile organizations and opportunity to place greater emphasis on intrinsic motivation and frequent non-monetary rewards, including special assignments, opportunities to present externally or attend special events, high recognition in the workplace, awards and celebrations, and time for pro Bono work. For example, in North America based FinTech company offers unique leadership exposure opportunities and mentorship programs to reward performance and increase retention. 30. Conclusion: Organizations embarking on Agile transformations cannot afford to ignore performance management. Even Scrum teams undergoing pilots need to be ring-fence from traditional approaches to ensure that Agile practices and mindsets have the freedom to take hold and are appropriately recognized and rewarded. Done well, performance management that is customized to the agile goals and context of an organization will enable full capture and sustainability of the benefits promised by agility. Use Agile performance management to make Agile measurable. Stop measuring team's velocity is not the indicator you want to focus on. Instead, measure progress and value. Use OKRs for measuring progress of explicit activities and deliverables. And use IBM's key value areas for measuring value outcome and impacts. Scrum team engagement is key. Create a more humane work environment to unlock your biggest unused competitive advantage. Your workforce. A major part of creating a successful and comfortable environment is by taking time to celebrate success as a team. Let people know that their hard work won't go unnoticed. There is no one size fits all performance management process. Instead, it's time to build an agile process that empowers managers to remain flexible to the needs of their Scrum teams.