Agile Management | NOOP.NL

Make A "Social Contract" With Your Team

I have told you how to define goals, rules and boundaries for the people in your organization, and hopefully your team is on a great and inspiring mission.

But what do your team members get in return?

Why should people subscribe to your vision? What’s in it for them? Only a salary?

Israel Gat described how he used the idea of a social contract to define the obligations that the manager feels he has towards his employees:

Team, my overarching organizational objective is to preserve our team and its institutional knowledge for our corporation and its customers for years to come. We will achieve this goal by enhancing our software engineering prowess to the level that the resultant benefits will outweigh the repercussions of the current financial crisis. […] Whether you will or will not be with the company in the future, I acknowledge your need to develop professionally as Agile practitioners and commit to invest in your education/training.

In this social contract Israel Gat described not only (part of) a mission, but also what he acknowledged to be his own responsibilities toward the team members. In this case it was investing in education to address their need to further develop themselves professionally.

Social contract theory is a philosophical concept describing how groups of people maintain social order by giving up some of their freedoms to an authority. It is an agreement by the governed on a set of rules by which they should be governed, and it usually applies to societies and their governments. But the idea translates quite well to organizations, even though the “governed” do not have the right to elect their “governors.” What is similar is that the contract lists the obligations of the authorities toward the people, and that everyone is automatically assumed to agree on the contract, or else they are free to leave. (Which, I am sad to add, can be a bit troublesome in the case of some countries.)

A social contract should address the basic necessities of people. In a society, they are not only things like food, shelter, and safety, but also freedom of speech, basic education, equality, and (if you’re fortunate enough to be born in a modern country) healthcare. In an organizational context we’re talking about similar things, like the freedom to voice your opinion, professional development, non-discrimination, and a little help when you’re not feeling well.

This brings us back to a topic I have frequently touched upon before, which is that management is all about people, and that it needs to acknowledge their basic intrinsic desires. A social contract is a simple but effective way of making this explicit for all involved.

(image by madmolecule)

This article will be part of the book Management 3.0: Leading Agile Developers, Developing Agile Leaders. You can follow its progress here.

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Latest, greatest and favoritest posts: Protect People Yes, Good Managers Are Manipulators People Don't Listen

Quality: You Don't Get What You Don't Measure

I am not a saint. There have been some awful quality problems in the products that I was directly or indirectly responsible for.

No, I was not responsible for accidentally sending that email to 1,000,000 people instead of just 10,000 registered users. And it was not me who messed up the home addresses of a few thousand on-line buyers so that their products could not be delivered. And I had nothing to do with the bug that allowed 9 out of 10 players in a lottery to win the main prize. But I will eagerly tell you about my own programming errors. If you show me yours, I’ll show you mine.

The problem with quality is that it is often simply assumed by everyone. This is exemplified by the well-known triangle of constraints, which lists all important constraints, except quality. Customers just assume they will get quality products, and managers assume that employees know how to build them. And, unfortunately, 80% of people actually believe that the quality of their work is above average. Obviously it isn’t.

Self-organization can solve many quality problems, as long as you put the right constraints in place. It is sometimes said that managers get what they measure. If you make it a point that products must be delivered to customers before their deadlines, then self-organizing teams will do exactly that. They will push (sometimes crappy) products out the door on the day of the deadline. If you make it a point that products have to be reliable, scalable, well-performing, and secure, self-organizing teams can build exactly that. They will deliver high-quality products many months after the customer gave up waiting for them and went elsewhere. And if you manage your constraints to have products delivered on time and of high quality, again you get exactly what you want. But the products will contain less than half of the features the customer originally asked for.

I prefer to depict these choices in my favorite adaptation of the iron triangle, where quality is added to turn the triangle into a square. Part of your job as a manager is to think hard about the kind of constraints you place on self-organizing teams. You not only get what you ask for. You also don’t get what you don’t ask for. Too often, managers forget to define clear constraints for quality in their products. And if you don’t define it, you are not going to get it.

(image by Nick J. Webb)

This article will be part of the book Management 3.0: Leading Agile Developers, Developing Agile Leaders. You can follow its progress here.

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Latest, greatest and favoritest posts: Yes, Good Managers Are Manipulators The Do-It-Yourself Team Values Kit Where There's People, There's Problems

Protecting Fish and System Administrators

I work for a company with a big open office space, in the Van Nelle Factory in Rotterdam. About 100 people work in an office that was the first of its kind in Europe, when it was built in 1929. And 80 years later architecture lovers from all over the world still come to visit and admire it, taking pictures and making drawings. We sometimes wave at them.

A big open office space has many advantages, and some disadvantages. The main disadvantage is that it is a shared resource for all who work there. Climate, sound, and light are hard to manage in a space like that, and the optimal configuration for the whole is never optimal for all. But our office manager does the best she can in trying to maximize pleasant working conditions, while maintaining tight rules to keep things under control. A shared open office is not the ideal environment to give people full responsibility over their own working space.

When shared resources are not managed by a central authority, self-organization often results in the Tragedy of the Commons. The name refers to a situation in which multiple self-organizing systems, all acting in their own self-interest, overexploit a shared limited resource, even when they all know it is not in anyone’s interest for this to happen. The impact that humanity has on CO2 levels in the air, trees in the forests, and fish in the sea, is right now the most debated and intensively researched case of the Tragedy of the Commons.

Organizations also have shared resources, like budgets, office space, and system administrators. We could see them as the business-equivalent of the air we breathe, the landscape we change, and the fish we eat.

It is imperative that you instill some form of governance to protect these shared resources. (I realize that most modern day governments are not setting a good example of how to do that.) In the case of shared resources, whether it concerns money, space, or system administrators, someone outside of the development teams must act as a ruler, keeping an eye on long-term organizational stability instead of short-term individual gains.

The Tragedy of the Commons proves that multiple self-organizing teams cannot share authority over a shared resource, because the systems will optimize for themselves, and not for the whole. They can only solve this problem by installing a form of governance… that is… a (resource) manager. You perhaps?

This article will be part of the book Management 3.0: Leading Agile Developers, Developing Agile Leaders. You can follow its progress here.

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Latest, greatest and favoritest posts: Protect People Self-Organization vs. Emergence Agile is NOT a Risk Management Strategy

Good Managers Sometimes Have to Play Assholes

This is a guest post by Pawel Brodzinski. Pawel has his own blog called Software Project Management, where he writes about dealing with software projects in real life. (If you are interested in writing blog posts for development managers and team leaders, like this one by Pawel, then be sure to check out the new Management 3.0 site that I am developing with several other writers. We welcome your ideas and blogging material!)

I have a task for you: think about a manager you respect. One you’d like to work for. How would you describe her or him?

Leadership. Strong motivational abilities. Courage. Care about people. Great organizational skills. Openness. Tolerance. Great communication abilities. Support. Mentoring skills. I guess you counted at least a few of these.

Has "being an asshole from time to time" made it to your list? I didn’t think so.

Think about it a bit more. How did the manager of your choice act when there was a serious slip in production, and a team member asked for a couple of days off? Were they still so agreeable? Or did they put project success over comfort of one of the team members? What happened when budget cuts came and they had to fire someone? And how were they described by a person who got fired? How did they answer when you came with the idea to introduce a cool new technology in the middle of development? Were they supportive? What was their reaction when the team had so much fun making some soft jokes at a newbie (as you always did)? Was it fun to listen to their reprimand?

All of these situations have something in common. There is a point where a bad policeman appears. Someone who blocks our private plans, or fires us, or prevent us from learning new things, or simply kills our entertainment. A kind of asshole really. A manager.

Now, these things are crucial when becoming a good manager and a true leader. Managers aren’t needed so much when everything goes fine, a company has loads of money, people are highly motivated, and know which borders shouldn’t be crossed. However when something goes wrong it is a manager who should react first. Very often someone has to play the role of an ass to fix the problem. Guess who it is.

Probably the most difficult example of the issues mentioned above is firing people. It is nothing pleasant. Personally I hate it. That’s a classic asshole-moment. I have to play this role on occasions because, after all, my employer pays me for that. Of course, from the team’s perspective, things look better when you decide on merits and let go someone, who doesn’t suit your group, but think how many times people are fired just because of budget cuts? And that’s still the role of the asshole... I mean the manager. A person who otherwise might be praised by the team.

When it comes to manager-team relationship these (rare) moments when a manager plays a bad policeman remind people about rules to be followed and borders not to be crossed. If the atmosphere gets too loose it’s usually sufficient to experience a flash asshole-moment and, magically, everyone recalls that there are some rules that need to be obeyed.

The interesting thing is, the further we go into agile management territory the less typical the managerial job we expect. Teams are self-organizing and cross-functional, and sometimes we think a manager should just get out of the way. By the way, surprisingly often this is exactly the best choice. But whenever one of the asshole-moments is needed, it is time to show up and do what has to be done. Otherwise the atmosphere starts rotting as people wait for someone who will fix things. Someone who will do something about this guy adding a new technology every time he reads some nice article. Someone who will deal with that lass taking a few days off because she doesn’t really care about the project being late and the team working their butts off to get back on the right track. That’s always a job for a manager, and a harsh one, no matter how self-organized the team is.

If you dig deep enough in the story of the manager you initially thought of, you should be able to recall a few moments such as these. Odds are, from a perspective of time, they even look like pretty good decisions. However, back then, when it was all fresh, your thoughts most likely included “what an asshole” epithet when you were thinking about the manager.

Thanks to Pawel for his guest post! If you have some ideas to share of your own, feel free to contact me about it.

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Protect People

The first three years on high school were the worst of my life. Some guys in my class had chosen me as the center of attention in their need for bullying and harassment. I was regularly the victim of vicious jokes, bad treatment, name calling, destruction of stuff I owned, and my schoolbag flying over my head across the room. I was unable to stand up for myself because, at that time, I didn’t know how.

A class room full of kids is a fine example of a self-organizing system. True, the teachers have some constraints concerning children’s presence, homework, and tests, but despite plenty of school rules and directives, whatever else happens in and around school is left to the kids themselves to handle. And there are always a few that suffer from this.

Self-organization is not necessarily a good thing. A group of thugs mistreating a timid kid is an effect of self-organization that needs eradication. Self-organization implicitly assumes that people take care of themselves, which is something not everyone is capable of.

Management literature has plenty of examples of people being mistreated by their colleagues at work. They too can be the victims of vicious jokes, bad treatment, name calling, destruction of stuff they own, or their lunch boxes flying over their head across the room.

As a manager you are responsible for both promoting self-organization and protection of people, like my school was responsible for allowing kids to play and protecting them at the same time. (They didn’t do a spectacular job, I must add.)

But how do you find out if someone is being mistreated?

Honestly, I’m no psychologist. But from personal experience I can tell you that it probably won’t help asking someone “Are you being treated well?” Because everyone, including the kid with the black eye, will say “Yeah, sure”. Some organizations have a counselor to whom employees can turn with their personal problems. But my school had a counselor too. Of course, I never went there. What did they expect? That I would enter his office saying “Hi, I just came by to report how sad I feel that the other kids caused a carton of chocolate milk to burst in my schoolbag?”

I think there are two other approaches that might work. The first is asking someone “Who are your friends here?” (This happens to be question #10 of the 12 best questions to ask an employee.) At school I wouldn’t have been able to answer that question (if they had bothered to ask), because truth is I didn’t have any. Note carefully whether the interviewed person can produce a couple of friends’ names at the blink of an eye, without sweating and swallowing heavily. Of course, lack of friends at work doesn’t have to indicate something bad going on. But you might start by showing genuine interest in the person, like “Well, that doesn’t have to be a terrible thing, but why don’t you and I have a drink later this week, and talk about other things besides work?” It could make a big difference to someone. I know for certain my defenses would have crumbled quickly in front of a friendly face.

The second approach could be to ask the other people. Sure, I could have kept my defenses up and named a few neutral class mates as my “friends”. But my teachers could have asked them “Are the other kids in class being treated equally well?” or “Which of the kids in class are having a hard time?” Plenty of other kids knew about my unfortunate position in the pecking order. Unfortunately, nobody ever asked them. And I spent my time in the boys’ dressing room, using my t-shirt to wipe the chocolate milk of the burst carton from the pages of all my school books.

But you still have a choice. You can ask.

By the way, there’s no need to feel concerned about me now. I have learned to bite back so hard, that my teeth needed renovation.

(image by ratexla)

This article will be part of the book Management 3.0: Leading Agile Developers, Developing Agile Leaders. You can follow its progress here.

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Communicate Your Goals!

Many years ago, during a board meeting, I once heard someone ask: “What was our corporate shared value of this year again?” And the CEO answered that it was courage. I didn’t even know there was a “corporate value of the year”. And it was almost Christmas! Perhaps the year-end results of the business had been a little better if a few more people in the organization had actually known that courage was valued and supported. Who knows? Who knew?

Let me share with you my secret technique that occasionally helps me in achieving my goals… I tell everyone about my goals!

I tell my friends about the goals that I have. When people know what my goals are, it tends to strengthen my own resolve to actually achieve them. I regularly get questions like “When is your book coming out?”, “How is that new business unit of yours? Any customers yet?” and “How far are you from becoming a billionaire?” These questions remind me about the goals that I set earlier. By communicating goals to friends and colleagues I make sure that the environment gently pushes me and keeps tab on my progress. It’s like handing over management of myself to the environment. It also helps that I do not want to hear someone saying “I knew it. I always thought you wouldn’t achieve it.” Keeping a goal to yourself is the easy way to failure. Because if you fail, cognitive dissonance kicks in and you simply convince yourself that your goal was never serious in the first place. So you tell people about your goal because you don’t want to fail. And that takes courage.

Someone once said to me that, according to research, documented goals had no measurable effect on the success of software projects (source unknown). My response was, “Of course, but the same applies to toilets.”

What matters is not the act of writing goals on paper. I can write anything I like on a piece of paper, and I’m sure that it will have no effect whatsoever on my project. Goal setting is about making sure that everyone in the organization acts in accordance with your boundaries and directives. Every day. All the time. As steering wheels, maintaining direction in an organization, your paper, plaques, and posters are totally inadequate. People must not just read about your goal. They must feel it in everything they do, weighing every action against it.

How?

By talking with people about your goal, and reviewing their actions. Also by asking questions, like “Do you still know what your goal is?” and “How is this action going to help us in achieving our goal?” A goal only works when the people in the system use it to evaluate their actions. It is a goal when they can recite it. It’s not a goal when only you can, at the end of the year, just before Christmas.

Therefore, when people are unable to answer such questions, take it as a hint that your approach to goal setting needs a little rework. And maybe some courage too…

This article will be part of the book Management 3.0: Leading Agile Developers, Developing Agile Leaders. You can follow its progress here.

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Checklist for Goals and Resolutions

Do you have resolutions for the new year?

Are you defining new goals for your project or team?

If the answer is yes, then you would do well to run each of them against the following checklist.

I created it by combining various sources, including the famous S.M.A.R.T. criteria, and various wisdom tiles from my grandmothers bathroom:

1. Is the goal specific/understandable enough so that people know what you mean?
2. Is the goal simple/concise enough so that it fits on a small card or sticky note?
3. Is the goal manageable/measurable so that success can be determined?
4. Is the goal memorable/reproducible so that people can easily communicate it to others?
5. Is the goal attainable/realistic so that people have a chance of actually achieving it?
6. Is the goal ambitious/broad enough so that it isn’t (too) easy to achieve?
7. Is the goal actionable/assignable so that it can be turned into specific actions?
8. Is the goal agreed-upon/committable so that people actually feel responsibility for it?
9. Is the goal relevant/useful enough for people so that they really care about it?
10. Is the goal time-bound/time-specific so that people know when to do it?
11. Is the goal tangible/real so that people can see the effects of achieving it?
12. Is the goal excitable/motivational so that it motivates people to do their best?
13. Is the goal revisitable/assessable so that you can reassess its applicability later?
14. Is the goal inspiring/visionary so that it helps people to see a bigger picture?
15. Is the goal value-based so that it builds on top of company values, team values, or personal values?

There are also a few things that you should stay away from when you’re setting goals. Susan M. Heathfield described five possible dangers.

• First of all, goals should not be created to intimidate people and to threaten them with loss of their jobs if they’re unable to achieve them.
• Goals should not be defined merely to impress shareholders or people watching the organization from the sideline.
• Goals should not favor short-term wins over long-term losses.
• Goals should not distract people from a desired outcome by focusing only on an action plan.
• Finally, you should aim not to have too many goals.

And particularly that last one sounds like a fine goal to me!

I wish you all the very best for 2010.
And thanks for reading...

(image by oskay)

This article will be part of the book Management 3.0: Leading Agile Developers, Developing Agile Leaders. You can follow its progress here.

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Yes, Good Managers Are Manipulators

Are managers manipulators? Yes, I think so.

Nobel Prize-winner Ilya Prigogine discovered that a complex system can only self-organize when there’s a boundary around it. And I believe him, because back in the old days a person actually had to achieve something to win a Nobel Prize.

Self-organization requires that the system is surrounded by a containing boundary. This condition defines the “self” that will be developed during the self-organizing process. [G. Eoyang & D.J. Conway, 1999]

A football team self-organizes within the boundaries of the playing field, and the rules as they are laid down by the football association. A herd of wildebeest self-organizes within the boundaries imposed on it by the South‑African ecosystem in which it lives. Al Qaeda self-organized as a result of Soviet and American interventions in Afghanistan, and within the context of Islamic Sharia law. Without a boundary a system lacks the drive and constraints to organize itself.

The need for boundaries does not imply the need for management. It is a common misconception that a system without governance has no boundaries. There are always boundaries. I should know. I’m sitting here, trying to write a book within the boundaries imposed on me by my publisher, my employer, my spouse, my intellect, and (worst of all) my computer. And yet, as a freelance writer, I have no manager.

The universe itself is a boundary. Our planet forms a boundary. Natural resources form boundaries. And cultural constraints in a group of people also form a boundary. What we can learn from this is that there’s always plenty of opportunity for self-organization to take place, and quite often at least something will emerge from that. But now that you’re a manager, having defined the system in the first place, and governing the system to protect it, you might just as well take the opportunity to make sure that what emerges has value to you and the environment.

The message of complexity science is not simply to stand back and wait for the right solutions to emerge. Too little control is just as misguided a business strategy as too much. Some structure is necessary. The degree and nature of control that CEOs establish in their companies strongly influences what emerges, in terms of culture, creativity, and adaptability. [R. Lewin & B. Regine, 2001]

As a manager it is your job to manage boundaries and constraints, so that the right solutions can emerge. You don’t manage the people. You manage the system.

The good-to-great companies built a consistent system with clear constraints, but they also gave people freedom and responsibility within the framework of that system. They hired self-disciplined people who didn’t need to be managed, and then managed the system, not the people. [J. Collins, 2001]

In biology this is called directed evolution. Biotech companies exploit the power of evolution to design drugs. They take charge of selective pressure and then allow nature to self-organize and do the rest. Directing evolution is a matter of changing boundaries so that nature produces molecules that are valuable. Directed self-organization in organizations is a matter of manipulating the constraints so that a group of people produces results that are valuable to the manager.

So yes, it’s true. Managers are manipulators. But they must be manipulators of the system, not the people.

(image by Jenny Downing)

This article will be part of the book Management 3.0: Leading Agile Developers, Developing Agile Leaders. You can follow its progress here.

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Managing Leaky Organizations

In a complex system each hierarchical level has novel and irreducible properties. This has far-reaching consequences for managers of complex systems, like you and me. It means that those who know all about one level of a hierarchical system may be unqualified to deal with lower or higher levels in that same system, because those other levels require different kinds of knowledge.

A molecular biologist may be unqualified as a gardener, because understanding how biology works on the level of eukaryotic cells, genes, and RNA, does not imply an understanding of how to tend a garden; while a gardener need not know a thing about chromosomes and genomes to do a good job at gardening. Similarly, the CEO of an organization needs to know a lot about managing businesses, but he could be a complete no-no when it comes to communication, coaching, and other people management skills. (I’m sure plenty of readers can acknowledge first-hand experience with such circumstances.)

Managing organizations requires other kinds of knowledge and experience than managing people, though some knowledge of the underlying levels might be useful. Joel Spolsky proposed The Law of Leaky Abstractions as an explanation of how parts in a system can manifest themselves in counter-intuitive ways in the higher levels, which are supposed to abstract away the lower-level implementation details. Higher-level programming layers that suffer from events in their underlying implementations are considered leaky. Obscure error messages presented to users are another common effect of leaky abstractions in software.

We can see similar problems in other complex systems. My conscious mind occasionally suffers from black-outs, déjà-vu’s, forgetfulness, random memories, and other weird effects, that can only be explained as lower-level irregularities in my neural network leaking through to the higher level that I call my mind. But I don’t have to analyze my neural pathways to put my consciousness to good use, although it is nice to learn from neurologists that the embarrassing quirks in my mind are actually quite common. Likewise, you don’t need to fully understand assembly programming in order to write good higher-level programs, though some lower-level knowledge could make your life easier at times. With management it is the same. One doesn’t need to be a good people manager in order to manage an organization. But some people skills could come in handy, in case things get leaky.

(picture by eflon)

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How to Roll Code 24 Hours a Day and Sleep Like a Baby (guest post)

This is a guest post by Chad B. Harris. Chad is a healthcare entrepreneur and CEO of the No Insurance Club. He has also lived and worked in Asia in investment banking and trading for 6 years and speaks Chinese. You can find him blogging about branding, marketing and entrepreneurship at http://franchisewhale.com when he has free time or hanging out with his wife and four kids in Phoenix Arizona.

As I rode down the ramp from the airport terminal, I turned on my Blackberry to see what I missed. Just as I got to the bottom, an express train was waiting to take me downtown. Fifteen minutes later I pulled into the Amsterdam Central station and my first thought was, “How am I going to make it to Kiev by Friday night.” It was Thursday morning and I had a weeks’ worth of work to do before heading to Schiphol 60 hours later.

That was 1 new baby, 64 baseball games, 48 Fridays out with my wife ago and too many airports to count.

2006 is when it all changed for me. That was the year I realized, the freedom of calling my own shots had changed into a prison of air miles. I was licensing ideas around the world and missing my life around my own house. The answer was so laughable obvious I was surprised ‘I” did not think of it. “Why not find the best people in the world that are overworked and under paid. Put them in a position to automate processes and free up my time to be with my family. First, I needed to make my offering so compelling I would not need to travel to “sell” it. That will require more systems and web development.

Step One: Location, location, location

If you want to build big on a small budget you need to go abroad. Warning: Mumbai is New York with better curry. Don’t go abroad if you are going to work out of an expensive city. The worker bees that work in the Fortune 500 white collar sweat shops live in the slums and spend 15 hours a week taking trains to work just to make $150 per month as a two year college grad, Excel, phone skills guy. The trick is to dig for talent in the cheapest mine possible. Once you find the unpolished gem, move them to the suburbs as far as the broadband will go and give them a fat raise, an apartment, new PC and now you are ready to recruit. The setup is so good; they would die not working with you. You gave them a 100% raise, 15 hours a week of their life back and a free house and you still are under $600 per month all in with room for 6 more to work out of the same flat. Win/win.

Step Two: Hire head programmer close to your home

Just like finding the gem half way around the world, you need to find the same undiscovered talent close to home to make it all work. Look for talented programmers that make $100,000+ per year that are completely stuck in a horrific work environment. Now that we are still in recession, it is easy picking right now. Your head programmer works in a white collar sweat shop but they do not live in the slums. Their prison exists behind well groomed lawns in the suburbs, three car garage, dance classes and baseball for the kids, gym memberships, alimony and eating out. Their joy is found in “how many vacation days left” not in Monday mornings. The person you want needs a voice but they have no megaphone. Give them a voice!

To get started, you will pay them $1,500-$2,500 per month and you have them nights and weekends. You are selling them the idea that, “You will be able to build your own future on your terms and at the same time; we will pick up your mortgage payment.” What drives them to your offer an idiot boss or company that treats employees like another piece of paper they can easily get from a recruiter, not a valuable asset.

How many places do you know are like this within 50 miles of your home or office? That’s right, companies that existed before 1995 have not adapted to the new reality. The mass production broadcast media industrial complex is dead. Niche production, narrowcasting media is the new way based on consumers saying, “Build this” not producers saying “Buy this” It’s about people, not corporations. Entrepreneurs are in a golden era of creativity. We have gobs of talent still stuck in the old corporate structures. Give them what they want, “Freedom to create their own destiny, without jumping head first into the abyss.” That’s your job!

Step Three: Find a confident honest Indian manager

India is the great temptress.” I can crank code at .10 on the dollar and all I need to do is wire money once a month, I’m a genius!” Wrong! I remember trying several programmers on basic design and PHP projects and it was frustrating. I have come to the conclusion that God spreads talent around the world to keep us from killing each other. We need China’s factories, China needs European and American creativity and we all need India’s back office. We don’t kill each other because we can’t afford to! Indians as a whole are not creative. Sure you have some that are and go on to be fabulously wealthy but for the most part, they are terrified of making a mistake and it takes a very long time to build a confident team. Even at rates of $450-$550 per month for 2-3 year programmers, the confidence curve eats up a lot of patience equity. You need to start with a Manager that is an entrepreneur, non-programmer, part operations, and part sales person. A utility guy. They work, live and play at the same spot. He will recruit and manage the team but your Head programmer will test and run the team.

Step Four: Lather, rinse, repeat

Now that you have your global code factory, let’s light this rocket! You still don’t even have a corporate headquarters yet and don’t need one. A “Garage” start up is so 80’s, you have now started a global talent arbitrage machine that leverages the freedom out of three flats anywhere in the world the broadband can be pushed.

You have your Indian Manager now; recruit for programming languages and lifestyle changes under the direction of your head programmer. They simply repeat what interested them in the enterprise. Freedom, adventure and you are valued. Since you have 3 time zones to work in, your head programmer will quickly realize, he can work at night, lay things out for them, check the test server in the morning, give new instructions and off to his day job. When he comes back, he has hours of grunt work all done for him. As he sees his baby start to crawl he will steal away at lunch time, not to see his girlfriend but to push out some new code. His dreams of leaving the “Man” are becoming brighter each day. He can see, feel and savor the sweet taste of freedom.

Step Five: System, tracking and ROI

I assume you are reading this blog because you have an “Agile” mindset. This is why as a reader; I was attracted to this blog. As a guest writer, I need to insert this disclaimer: “Your results may vary”. I can only share with you my hits a misses. In addition to programming, we needed database miners and call center teams so we have ongoing skill sets we need even if the programming does not flow flawlessly. In other words, we build our teams around tasks and not around the enterprise. Imagine it like flexible pods you can click on like Lego’s as needed. We flex a lot. We can take our teams and put them on other projects with a click of a mouse. This is the right approach especially in the beginning because you will want to keep your teams busy even if the core of your business is changing more than Paris Hilton changes boyfriends. Don’t worry, it will smooth out as things develop and you listen to the market not your ego. Stay light and stay fast.

With that in mind I leave it up to the managers to track their teams. They use, Basecamp project management software, (I believe it is $25 a month for our entire company) and gives us unlimited users and enough storage to post what we need to collaborate on. They also use Gmail chat and Skype. That’s it. It is really simple. We built a nice test server for under $1,000 that has up to 4 terabytes of storage we can run the code around the track Our programmers are really busy with a base of ColdFusion, PHP and lots of java scripts, HTML for the web and API’s to the vendors to make our dashboard experience all seem very tight and integrated. Our dashboard is what functions as an internal CRM for us and is command and control for the web experience for the public and web experience for our partners. We create marketing content, deliver it over the web, clear payments, create contacts, track accounting and run reports all internally. Any outside software that already does what we want and saves us programming time, it qualifies for consideration only if they have API already. If not, we build it ourselves.

I assign a burn rate by project based on what Base camp shows as billable hours. Base camp has a time tracker in it. You will need to have people login and out on each project in order to have more accurate costing information. I know this is very rough but it will give you a good idea how many man hours for each project you are working on. We default Base camp as the browser homepage for programmers so they login before they gets started each day.

That’s it! Don’t forget each piece of the puzzle you put together creates more shareholder value. Building equity is the third leg we did not have time to discuss but will be increasingly more important once your enterprise starts to take flight as you need to raise money to multiply what is working. Get started, stay agile and I look forward to seeing you on the web.

(image by mshades)

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