Acme, a software company, has a technical excellence problem. Its customers report more problems than the product teams do. Two managers, Cindy and David, want to bring specialized training in for product teams. (They want to help their teams learn to use Test-Driven Development, TDD, and Acceptance Test-Driven Development, ATDD. Cindy and David suspect that when the teams use these techniques, they will prevent defects and discover them faster.)
Cindy and David emailed their boss, Harry, and explained their thinking. At the management meeting a few days later, Harry asked how much the training would cost.
Cindy and David explained that the trainers under consideration charged somewhere between $20,000-$30,000 for a week of training.
Harry said, “That's a a lot of money. Can we do it cheaper?”
Cindy said, “Every time we miss a defect, we irritate our customers. As a result, we've already lost about 2% of our customer base this year. In a few months, we won't have to worry about the cost of training. We might be out of business.”
David added, “We're also slower than we want to be. We can recover those customers if we fix the defects and release some of the features faster.”
Cindy said, “It's not about the cost of the training. We need to think about the investment in our people.”
Harry said, “Hmm. Cost vs. investment. I think I can work with that.”
Clarify How You Think About Cost vs. Investment
Because we use cost accounting tools, many managers think only about how much something costs. However, what if we could reframe cost and investment this way:
- Cost: Something you can depreciate. In layman's terms, you can spend money now and not gain value over time. When companies buy hard goods, such as computers or desks, they can depreciate those items over time. Companies can receive tax breaks and manage their operating and capital budgets better.
- Investment: Something that appreciates value over time. For example, any change you make that reduces the time to release or decide is an investment that returns more value over time. (This newsletter is about learning as that value.)
The big problem in organizations: It's easy to measure and track costs. How can you show the benefit of the investments? I have some ideas.
Consider These Options to See the Benefit of Potential Investments
Here are some options for seeing the benefits, especially for training as an investment:
- Measure the cycle time as a whole for any team, the project/program, or the department. How long does it take that entity to release working features or the product? Where are the delays and cycles back for any given feature? (See Unearthing Your Project's Delays for how you might visualize those cycles.)
- How many defects bounce back to the product team after release? And what is the duration and cost to fix those defects?
- How many items do you have in the backlog for the “must-do” features or projects? All the delays in the immediate work create delays for future work.
For training, measure this data for at least a month, preferably three. Then, you can see how fast the investment in training might pay off for the team and the organization.
Consider Low-Cost Investments
What if you think you don't have much money to spend? In that case, create a book allowance for every person and team.
Books, especially when people study them as a cohort, offer low-cost investments with potentially high returns. That's because the people and teams can choose where to create experiments.
Some experiments will “fail,” as in they didn't work. That kind of failure narrows the universe of things that might work.
And, if you really think you have zero money to spend on books (really??), ask people to take a book out of the library. If the library doesn't have the book, they will order it in the appropriate format.
Invest in the People You Lead and Serve
After a little thinking and persuasion, Harry “found” the money and invested in training for all the teams. Within a month, they reduced their defect levels. Within three months, they halved their cycle time. Six months in, and they're finishing more backlog items and continuing to make things better for the customers and the team.
Long ago, a manager said, “If I invest in these people, they might leave.”
I said, “True. And if you don't invest, those same people might stay. Which circumstance would you rather have?
(This newsletter touches on topics in Create Your Successful Agile Project and Lead an Innovative Organization and is part of the series of leadership tips.
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Pragmatic Manager: Vol 19, #3, ISSN: 2164-1196