telerik “Deliver more than expected”

Kavia Venkatesh Agile Practices

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• Software development business started in Sofia

(2002)• Products developed-ASP.NET AJAX, ASP.NET MVC, Silverlight,

WinForms and WPF controls and components, as well as .NET Reporting, .NET ORM, .NET CMS, Code Analysis, TFS and Web Application Testing tools

• Open, flexible and informal culture

• Numerous awards

• Client Base-Vodafone, Citi, World Bank, Harvard

and many more

• What they do: telerik Products and Technologies

telerik Solutions: Highly customizable and off the shelf components

• Where they work: Physical environmentCulture of Transparency, Availability and involvement

• How they work: Software development process

• New idea, New team created• No 5 year plans, they have Project Plans• Ownership to product- Autonomy and

decision making• Scrum-ongoing communication and

problem solving• Spike-learn more about product

features• Product team in close contact with

customer

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2011 2012 2013 2014 20150

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

Operating revenue

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2011 2012 2013 2014 20150

100

200

300

400

500

600

700

Employees

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Progress acquired telerik• Progress Software acquired telerik on December 1, 2014 for $263 million.• More than 4 million users and 47,000 businesses in over 175 countries run

applications on the Progress OpenEdge platform and database.• With telerik, Progress becomes a destination site for the largest developer

population on the planet.

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Software Agility at telerik

• 3 releases a year

• New idea meant new team

• Empowered teams delivering quality software rapidly

• Explicitly driven by intimate and immediate customer

feedback

What are the critical factor in the organization culture as telerik?

• Quality (delivering good product or project outcome)

• Scope (meeting all requirements and objectives)

• Time (delivering on time)• Cost (delivering within estimated cost and

effort)

Critical success factors

Organizational

People

Process

Technical

Project

• Organizational• Cooperative and collaborative culture

• People• Highly motivated team

• Process• Strong communication and customer

commitment• Technical

• Continuous delivery• Project

• Emergent scope and requirements

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What are the most important components of culture that must be maintained as telerik grows?

• Values: Respect, dedication, precision, innovation, leadership, speed, quality, involvement, care

• Open and Transparent culture: Family like environment• Trust built on communication, transparency and accessibility

• Orientation process-New Hire is assigned a mentor and coach• Mentor-cultural assimilation• Coach-Domain specialist- Technical content

• Performance management- Quarterly review• Bonus in each review, long term benefits• “13th Month salary” end of year, every employee

• Common sense: Behavior and Business• “Don’t Be Stupid”

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Is agile development a software design or an organizational design tool?

“The capacity to quickly and efficiently create, redeploy, reconstitute, and reallocate the resources of the organization in a manner which optimizes their use in an environment or allows them to create new environments.”

Mische: Strategic Renewal

“Continuous delivery is often described from the perspective of the technicians. This is understandable because that is where it started, but it does the process a disservice. Continuous delivery is a holistic approach. It requires change across the organization and it encourages such change, to the betterment of the groups that practice it”—Dave Farley, author of Continuous Deliver

“Adopting Agile software development practices is not just an IT change, it is an organization-wide change.”—Jeff Nicholas, Director, PB & WM IT Digital Banking APAC, Credit Suisse

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What skills must employees and manager have to be able to work well in an agile development environment?

The Agile manager—more shepherding less directing• Effective communication to ensure the team is synchronized on information.

• Analytical thinking to help the team brainstorm solutions when a challenge

is encountered.

• Diplomacy skills to ensure tactful communications that do not offend or

touch upon sensitivities.

• Great listening skills to not only ensure accurate understanding, but also to

enhance relationships with others.2 x more likely to outgrow competitorsIn research2 conducted by Deloitte for Google Australia, they found that companies who prioritize collaboration are twice as likely to outgrow competitors.

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Is agile development sustainable with growth?

• Agile is flexible and adaptable• Responsibility of an individual to deliver on the day-to-day requirements.• Allows for rapid change when scope & circumstances change.• An open and transparent organizational structure. • Focus on staff engagement, developing staff as a mechanism to drive improved

customer outcomes. • Business growth comes from applying profitability to customer growth. Profitability

comes from delivering services to your customers, accurately and efficiently.

YES

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What are the strengths and vulnerabilities of telerik’s communication strategy and practices?

Strengths Vulnerabilities

Factor Advantage Vulnerability

Physical proximity Closely connected teams As the teams, projects grow difficult to keep the team closely connected different across geographies

Work culture Friendly environment, team members between ages of 20-30 same frequency.

No senior member in the team, lack of experience and diversity

Temporal proximity The teams focused on product in a particular Technology. Reduces induced administrative overhead. Reduces context-switching overhead. Increases domain knowledge, team cohesion, visibility and clarity on progress

Stagnation of technical skill sets. Boredom and its associated morale problems. Reduced opportunities to learn about other areas of the company’s business, with the risk of developing a narrow perspective on the workMissed value from deep specialists.

Family like environment

Comfortable environment and they have close friends at work, make them stick around longer. I think it also facilitates communication and employee input across all areas of the company.

The main one is it can be too friendly at times and people can want to stand and chat with their buddies instead of getting their work done.

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What recommendation would you make to improve telerik’s communication system?

• telerik needs to look beyond Bulgaria• Open an office in USA

• Domestic market• Funding• Partners• Better environment to scale

• Boulder good choice• Highest percentage of software engineers in USA• Close to California• Great community and eventsTHE TEAM NEEDS TO FIND PEACE USING TECHNOLOGY (Skype, FaceTime) TO COMMUNICATE

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How does telerik attract high-quality talent in a competitive market?

• telerik has a low employee turnover rate of 4-5%, mostly occurring in first four months (industry standard 25%, Central Europe 88%)

• Fantastic physical environment (open, well lit, fun environment)• Review quarterly with bonus and year end bonus• Fully funded Professional development of staff• telerik Academy, free software training for individuals• Closely connected to educational bodies, weekly lectures

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What is telerik’s overall strategy for development of talent?

• telerik employs the best employees,

• Happy employees

• Pay more than others

• Attractive bonus and perks for retention

• telerik academy, is free and the best are offered a position in telerik

• Fully funded professional development

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How does the telerik reward system reflect the culture of telerik?

• Motivates employees to perform with merit based compensation

• Employee retention, every one likes to be appreciated

• Welcoming culture for new employees, orientation program

• Keeps employees healthy, reflecting care

• Concierge services, increase productivity with care quotient

• Fully funded professional development, boosting growth

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What human resource challenges will telerik face in the future?

• Managing talent and team processes

• Highly reliant on employee for product and development

• Increased competition, retention of employees

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What challenges will telerik face with continued growth?

• Building sustainable business

• Raising capital

• Exit options,

• Best partner, create value to position better

• Preserving company values and culture with growth

• Dynamic change in technology space

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What changes will be necessary for telerik to successfully mange the future growth of the company?

• Preserve the organizational culture with the rapid growth

• Scale agile practices• Refine value streams and rearrange trains to overcome large

geographical distribution• Derive global priorities from business value• Empower the teams and get the teams in charge of engineering

quality• How to handle release management in SAFe

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Recommendation

What do we do?• Telerik is closely knit, family like environment, preserve it• The company is recognized globally, with global sales------ need to

look beyond Bulgaria• Moving to USA would mean more investor recognition• USA has more opportunities for growth

0 5 10 15 20 25

-10

-5

0

5

10

15

20

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ScalabilityLifestyle

How can we do it?• telerik needs an Exit strategy

• Go Public (the average cost around $750,000,18 months + Lot of effort)• Acquisition (Sell to big fish---evaluate net value)• Aquihire (Worth a consideration----- Since we have strong talent)

• Both of which has its perks, open doors to new opportunities• Both of which require Proactive engagement of the right people• Drive improvements where required• Pay attention to all the external and internal factors gating success.

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AGILE Transformation

Scrum for 3-5 distributed

teams

Scaling up Scrum from 3

to 9 teams

Introduce SAFe for

Scrum teams

Introduce SAFe to all

teams

2010 ….. 2013 2014 2016

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SAFe in Transformation

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References

• http://proquest.safaribooksonline.com.du.idm.oclc.org/book/software-engineering-and-development/agile-development/9780133903690/firstchapter#X2ludGVybmFsX0h0bWxWaWV3P3htbGlkPTk3ODAxMzM5MDM2OTAlMkZjaDAxX2h0bWwmcXVlcnk9

• http://blogs.wsj.com/independentstreet/2008/12/01/bringing-a-family-like-feel-to-the-workplace/

• http://reader.eblib.com.du.idm.oclc.org/(S(2ovhbmxdlb0iuzzqinoxwsyy))/Reader.aspx?p=743916&o=975&u=4mhV5cfIsv90XF84P%2fMXNw%3d%3d&t=1470519953&h=2028D642890553A16F418179A37E9F92BC4AA1A9&s=47205816&ut=3201&pg=1&r=img&c=-1&pat=n&cms=-1&sd=2#

• http://www.ccunix.ccu.edu.tw/~kcchen/PM/Presentations/2012.05.25/Team4.pdf

• http://www.methodsandtools.com/archive/archive.php?id=70

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THANK YOU

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• EXTRA Slides

Key financials & employees

Unconsolidated data (USD)

31/12/2015 31/12/2014 31/12/2013 31/12/2012 31/12/2011

12 months 12 months 12 months 12 months 12 months

Local GAAP Local GAAP Local GAAP Local GAAP Local GAAP

Operating revenue (Turnover) 29,593,878 28,379,756 40,300,211 42,685,361 31,434,905

P/L before tax -13,937,211 -12,315,344 -13,251,586 4,764,762 7,095,131

P/L for period [=Net income] -13,333,334 -13,151,579 -12,271,318 4,333,378 6,423,657

Cash flow -12,729,457 -12,393,061 -11,369,274 5,229,172 7,212,226

Total assets 43,400,928 78,407,111 26,861,170 27,463,603 23,027,257

Shareholders funds -16,755,489 -3,330,639 -379,140 25,165,139 20,702,568

Current ratio (x) 0.67 0.96 0.60 9.38 7.06

Profit margin (%) -47.10 -43.40 -32.88 11.16 22.57

ROE using P/L before tax (%) n.s. n.s. n.s. 18.93 34.27

ROCE using P/L before tax (%) n.a. n.s. n.s. 19.03 34.24

Solvency ratio (Asset based) (%) -38.61 -4.25 -1.41 91.63 89.91

Number of employees 597 568 663 582 418

27Mint Global, 2016

• Improved quality

• Cross site and cross functional collaboration

• PI Planning provides both vertical and horizontal alignment

• Transparency through Rally, reports & SAFe ceremonies

• Agile Portfolio estimation & planning drives realistic Portfolio plan

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Gains through the introduction of SAFe

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