Scrum Team & their Velocity : From MIT AI Laboratory to Bangladesh Butter Production!

Let me begin this post by introducing you all to one Mr. David Leinweber, author of ‘Nerds on Wall Street : Math, Machines and Wired Markets’.

During his research in 1998 in First Quadrant, he found an interesting study where the single best predictor of the S&P 500’s performance was the production of butter in Bangladesh.

In his exact words,

I looked for more details, of course, and learned that between 1983 and 1993, “when butter production was up 1%, the S&P 500 was up 2% the next year. Conversely, if butter production was down 10%, you could predict the S&P 500 would be down 20%.”

The Bangladesh Butter Production Index or the amount of butter that was being produced in Bangladesh was a great predictor of where the S&P was going to be in the next month.

He obviously did that as a joke to highlight the fact that just because two sets of data move together does not mean that one impacts the other.

David even mentioned in an Forbes article 20 years later, saying that he still get calls asking data on butter production in Bangladesh.

Does this sound a bit unusual and funny?

If yes, the same should be your state of mind when hearing Scrum Teams (Squads) talk about better planning with Improving / consistent Velocity trends.

Improvement in Planning might show some signals alike in Velocity trends, but that doesnt mean one impacts the other.

Velocity is (one among the many) planning indicators and doesnt squarely own or impact the planning effectiveness.

There is no wrong in measuring Velocity so long as it gets invited as an input (one complimentary practice) to your planning cadence.

If so, what could be set of factors to consider in understanding the effectiveness of planning?

• Did the Squad collectively crafted and committed to an outcome driven Sprint Goal?
• Is the Sprint Goal crafted during the planning takes the Squad one step closer to Quarterly Objective / Product Goal?
• Did that Sprint Goal promote enough focus and flexibility to match growing uncertainty with time?
• Is work pulled into the Sprint enabling the Squad members to practice self-management?
• Is everyone in the Squad clear (if not for the entire Sprint but for work associated with the Sprint Goal) how will the chosen work get done?

In the absence of your Squad not ready to talk about Planning effectiveness in the right context, its time you start searching for butter prices from Bangladesh to correlate.