Game Theory says PMOs can't possibly work. But there's a way – via Throughput Accounting, Open Book Management, and Business Agility. Two quick games show how and why.

1. The Tragedy
Of The PMO

2. Does it?
The PMO should promote collaboration,
minimize tech debt, and maximize
portfolio throughput.

3. The Bonus Dilemma
Two managers,
One Minty each.
If both collaborate,
both win a Minty
If both cheat,
neither wins.
If one cheats,
they win the other’s
Minty + a bonus 2.

4. The N-Party Iterated Bonus Dilemma
Pairs take 6 turns
each. Negative
scores allowed.
The remaining 50%
play each other
Each new round,
Managers start with
one Minty each.
After 6 turns, cull
the lowest 50% of
all managers.

5. Many variations on this greasy pole!
Try “The Evolution of Trust”:
http://ncase.me/trust/

6. So much for collaboration. What about
Throughput and Tech Debt?
Let’s play PMO Poker …

7. 1919
1919
4
BonusTech Debt

8. 1919
1919
4
BonusTech Debt
4 Managers each with a 20 chip P&L
Shuffle and deal 10 Features to start
• Each feature has 2 cards:
• a red card –> feature cost
• a black card –> feature return
Managers ante one chip each to form
a release bonus.
• Bonus paid to highest scoring
manager at the end of the release
Managers take turns delivering one
feature each.
• A Manager may R&D up to 3 new
features a turn @ 1 chip each
• A new feature they don’t deliver is
available to all other Managers

9. 1919
1919
4
BonusTech Debt
Tech Debt:
• The red card for each feature you
deliver is added to the tech debt
• At the start of the next release every
Manager must pay 10% interest on
their PMO’s total tech debt
• At any time, any Manager can pay
off any tech debt card at a cost of
50% its face value.
A Release ends when no Manager
wishes to spend more P&L
• Bonus is paid to the Manager with
the highest return. They spend it on a
new Ferrari – it doesn’t go to P&L.
• Each Manager starts the next release
with a 20 chip budget minus the
tech interest. Tech debt endures ...

10. 1919
1919
4
BonusTech Debt

11. 19
4
11
1919
BonusTech Debt
Manager one delivers a feature.

12. 18
4
11
610
BonusTech Debt
The other managers deliver features.

13. 1
4
1
12
BonusTech Debt
Play continues until the end of the release.

14. 14
4
14
1414
BonusTech Debt
60
4
Next release everyone has a new budget but all pay 10% interest on tech debt.

15. That didn’t work.
Let’s try “Lean Startup”!
(Same game but P&Ls start with the return
from last release – their black card score)

16. That didn’t help either.
Now what?

17. Throughput Accounting
Open Book Management
and Business Agility
Throughput

18. 19
19 4
Bonus
Tech Debt
76
P&L
This time we’ll try Business Agility. We have no winners’ bonuses and just one P&L. We all
get a one chip bonus if there’s positive return, and none of us get it if there’s negative return.

19. 19
19 4
Bonus
Tech Debt
76
P&L
Stream one eliminates features that can’t yield net profit after paying tech debt.

20. 19
19 4
Bonus
Tech Debt
73
P&L
… and then immediately analyzes three features ...

21. 19
19 4
Bonus
Tech Debt
69
P&L
… yielding three worth delivering.

22. 19
19 4
Bonus
Tech Debt
63
P&L
Stream 2 analyzes three new features …

23. 19
19 4
Bonus
Tech Debt
63
P&L
… but none are worth delivering after accounting for tech debt.

24. 19
19 4
Bonus
Tech Debt
60
P&L
Stream three has better luck …

25. 19
19 4
Bonus
Tech Debt
54
P&L
… and gets busy delivering two features.

26. 19
19 4
Bonus
Tech Debt
51
P&L
Stream 4 also discovers two features worth delivering …

27. 19
19 4
Bonus
Tech Debt
41
P&L
In real life they all do this in parallel.

28. 19
19 4
Bonus
Tech Debt
29
P&L
Everyone has done the R&D part of their next turn.

29. 19
19 4
Bonus
Tech Debt
20
P&L
And now there’s enough P&L available to eliminate the tech debt …

30. 19
19 4
Bonus
Tech Debt
2
P&L
0
11
11
Before releasing all these features and starting the next release cycle ...

31. 〉eXponential return
〉 Simple design
〉 Continuous throughput
〉 Autonomous teams
〉 Learning: triple-loop
〉 Ecosystems thinking
What’s the difference
between Agile
Organization and
some other kind?

32. … if it uses Business Agility.
A PMO can promote collaboration,
minimize tech debt, and maximize
portfolio throughput …

33. 〉Products are service ecosystems
〉Product return curves are sigmoids
〉Don’t chain the curves; stack them
eXponential
return

34. 〉Design means the elegance of minimum
〉Not look and feel; how the ecosystem works
〉Design, Delivery & Devops work hand-in-glove
Simple
design
BUILDLEARN
MEASURE
TESTS
DATA CODE
REFACTOR

35. 〉At one time there’s one bottleneck constraint
〉Work on other constraints is premature
〉Because it won’t increase Throughput
Continuous
throughput
Throughput

36. 〉Self-organising teams don’t have masters
〉Self-managing streams don’t have owners
〉Leadership as a Service + Chapters & Councils
Autonomous
Teams

37. 〉Value flow, work flow, and flow of learning
〉Self-organizing transformation: steel threads
〉Continuous Delivery x Continuous Adaptation
triple loop
Learning
Learn
Build
Measure
Simplify
Portfolio
Squad
Stream

38. Ecosystems
thinking
〉Ecosystems as networks of mutual benefit
〉Whole board: think globally, act locally
〉Avoiding hill-climbing: iterative and reductive

39. X S C A L E
Xmas
Watch out for the
Special!
Coming Soon!
X S C A L E
A l l i a n c e
X S C A L E A l l i a n c e . o r g
Learn
Build
Measure
Simplify
Learning Flow
Work Flow
Value Flow