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Scrum – When can you ask the team to stop using Scrum and move back to the previous development model ?

This one is a slightly more depressing article for the practitioners of Scrum, especially for the Scrum Master who told me this story of his team, and the failure. He considered it his failure, although the rest of us were somewhat more charitable and attributed the failure to human nature, and morale issues. Let me explain a bit more:
We had a team that was working on a radical new feature, something which was going to take 75% of the total available resources, and the remaining 25% were to work on different features that were smaller in scope. In addition, the main new feature required a lot of support from Product Management and User Design team. For some time now, we had been moving the team towards a model whereby we would set monthly milestones, get them to commit to features within a milestone, track those features for the milestone, do demos at the end of the milestone, do an introspection at the end of the milestone, processes that we felt was moving the team towards a Scrum based methodology.
In the meantime, there were some organizational issues that started cropping up. The company faced a tighter competition, growth was sluggish, the economy was taking a down turn, and as a result, the stock was starting to fall, with profits down. The company had to take steps to reduce its costing, which meant cutting down on some of the bonuses and other payouts that were over and above the salary. This was the first time that such a belt-tightening was seen, and for many employees, this was the first time that they had seen something like this, and it was also a general belief that the company really did not explain things all too well. As a result, it was becoming increasingly obvious that morale was down, and the activism shown by individual employees was down as well.
Normally, one would not connect the introduction of Scrum with this morale issue, but soon after the introduction of Scrum, we found that tasks were not getting done as per schedule, and the sense of ownership that we would expect the team to have was not really coming through. As a result, within the first 2 Sprints, even when we had lots of discussions with the team, we were not getting any level of satisfaction and at a management level, we decided that things needed to be reverted; it was a painful decision to revert Scrum, but the driving that we expected that from the team was not coming through, and we went back to our method of working.

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