The (Software) Poverty Trap

A poverty trap is "any self-reinforcing mechanism which causes poverty to persist." If it persists from generation to generation, the trap begins to reinforce itself if steps are not taken to break the cycle.
https://en.wikipedia.org/wiki/Poverty_trap

People in a poverty trap are often in a low paid job getting paid every fortnight; after getting each paycheck they look through all the things they need to pay for; food, travel, shelter; everything goes on living and no investment is made for the future.

A Scrum team develops software in two-week sprints each with a set budget and a backlog of priority items. The priority is set on those items that will get the quickest reward, and not usually consider investment for the future.

There is something similar to how Scrum is getting used and the hand-to-mouth living of an individual in a poverty trap.

Falling into a debt spiral

A debt spiral refers to a situation where a country (or firm or individual) sees ever-increasing levels of debt. This increasing levels of debt and debt interest becomes unsustainable, eventually leading to debt default.

When someone is in a poverty trap it is easy to take the step onto a debt spiral. The car breaks down; without it, you can’t get to work, so no pay for food or rent, so you take a loan to get it fixed, but then how do you pay off that debt? 

Sounds similar to that time when the feature had to get out the door because of a deadline so there were some shortcuts made in the development, but the demands of the backlog mean the other new features are the priority, so when do you go back and pay off that technical debt in that feature?

Escalation of Commitment

We must finish this project we have already invested $X and Y months of work...

Sometimes the only option is to go bust and start again.

The sunk cost fallacy describes the phenomenon where people justify increased investment of money, time, lives, etc. in a decision, based on the cumulative prior investment ("sunk costs"), despite new evidence suggesting that the cost, beginning immediately, of continuing the decision outweighs the expected benefit.

Paying off the debts

Debt is not always a bad thing, many individuals, business & countries borrow to invest, but this is only a success when the benefits outweigh the costs and the debt can be repaid.

But just like anyone with debts pay off the highest interest first, but consider some quick wins to get rewards.

Balancing the Books

So how do we solve these problems and run successful projects? In this session, I will look at these issues in more detail and opportunities to prevent projects falling into a debt spiral and how to balance the books for those with debts to pay off.