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Jurgen Appelo calls himself a creative networker. But sometimes he's a writer, speaker, trainer, entrepreneur, illustrator, manager, blogger, reader, dreamer, leader, freethinker, or… Dutch guy. Since 2008 Jurgen writes a popular blog at, covering the creative economy, agile management, and personal development. He is the author of the book Management 3.0, which describes the role of the manager in agile organizations. And he wrote the little book How to Change the World, which describes a supermodel for change management. Jurgen is CEO of the business network Happy Melly, and co-founder of the Agile Lean Europe network and the Stoos Network. He is also a speaker who is regularly invited to talk at business seminars and conferences around the world. After studying Software Engineering at the Delft University of Technology, and earning his Master’s degree in 1994, Jurgen Appelo has busied himself starting up and leading a variety of Dutch businesses, always in the position of team leader, manager, or executive. Jurgen has experience in leading a horde of 100 software developers, development managers, project managers, business consultants, service managers, and kangaroos, some of which he hired accidentally. Nowadays he works full-time managing the Happy Melly ecosystem, developing innovative courseware, books, and other types of original content. But sometimes Jurgen puts it all aside to spend time on his ever-growing collection of science fiction and fantasy literature, which he stacks in a self-designed book case. It is 4 meters high. Jurgen lives in Rotterdam (The Netherlands) -- and in Brussels (Belgium) -- with his partner Raoul. He has two kids, and an imaginary hamster called George. Jurgen has posted 145 posts at DZone. You can read more from them at their website. View Full User Profile

Story of a (Fictional) Doomed Software Business

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This is the story of a doomed software business. Any resemblance to existing businesses is purely coincidental.

Once, in a land far far away, there was a software business with unhappy customers. (This is, fortunately, a fictional story.) Customer satisfaction in this business was low because both the productivity of teams and the quality of their products were low. Productivity and quality were low because, to be honest, the skills of the people involved were not very high. And their discipline in daily practices also left much to be desired. (See Figure 1)

Causal loop diagram (document) 1
Figure 1

The result of the dissatisfaction among customers was that it increased pressure on the software teams. Having to attend to their customers’ needs every minute of the day led to a decrease in the time available for education, which, over a period of time, further reduced the team members’ skills. And, combined with an increased stress level among employees, it also had an impact on their discipline. (See Figure 2)

Causal loop diagram (document) 2
Figure 2

Working with unhappy customers also made the employees themselves unhappy. And their motivation dropped even further because of the increased pressure, and their feelings of not having the means and skills to deal with the situation. Finally, low motivation among employees led to a further decrease in the productivity of teams. (See Figure 3)

Causal loop diagram (document) 3
Figure 3

The diagram in Figure 3 is called a Diagram of Effects (DOE), or a Causal Loop Diagram (CLD). It illustrates that this (fictional) software company suffered from various vicious cycles. Low quality and productivity led to low customer satisfaction and high pressure, which led to reduced education, discipline and skill, which then reinforced the low quality and productivity. Also, low productivity led to unhappy customers and increased pressure, which led to demotivated teams, which then reinforced the low productivity.

Causal Loop Diagrams

The bubbles in a CLD represent variables that can go up or down. The arrows indicate the effects these variables have on each other. When an increase of a variable causes another one to decrease, and vice versa, we draw a black dot in the middle of the arrow. Another possibility is a delayed effect, which we indicate with two dashes in an arrow. (See: Weinberg, Gerald. An Introduction to General Systems Thinking: Silver Anniversary Edition. New York: Dorset House, 2001)

The CLD in Figure 4 shows the influence that management had on this (fictitious) situation. The problem of reduced customer satisfaction confronted management with reduced revenues. But, while managers increased support for various improvement efforts in teams, like the adoption of Scrum and Extreme Programming, they also felt the deteriorating financial situation called for cutting budgets, including the budget for education.

Causal loop diagram (document) 4
Figure 4

Meanwhile, the environment of this software business wasn’t making things any easier. The economy was in a turmoil, which increased pressure on the company’s revenues. And at the same time technological progress kept accelerating, which further eroded the skillsets of the people in the business, who found themselves unable to keep up with technological innovations. (See Figure 5)

Causal loop diagram (document) 5

Figure 5

And so it seemed that this (fantastical) software business was doomed. No matter how it tried to free itself, the monster of evil vicious cycles kept this business firmly locked in a castle of misery.

But then, some managers decided to take a course on Agile Management. They learned to tame the beasts of Nonlinearity and Unpredictability, and freed the software business of its misery. And the people worked happily ever after…

Published at DZone with permission of its author, Jurgen Appelo. (source)

(Note: Opinions expressed in this article and its replies are the opinions of their respective authors and not those of DZone, Inc.)


Emma Watson replied on Fri, 2012/03/30 - 3:11am

That's a lovely thicket of thorns! At the risk of reducing book sales, consulting fees and speaking gigs, can you sum up what Agile Management's solution to this is? Does it center on certain bubbles in your diagram or is it a more holistic approach that is supposed to change the working culture?

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