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What’s the difference between incentive stock options (ISOs), nonqualified stock options (NSOs), and Restricted Stock? May 27, 2010

Posted by HubTechInsider in Boston Executive Moves, Definitions, Investing, IPOs, Management, Staffing & Recruiting, Startups, Venture Capital.
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What is the difference between the types of stock options? How many different kinds of stock options are there?

I am often asked questions about negociating stock options as part of a Boston high tech or IT job compensation package for an executive or management position. I am a successful entrepreneur and businessman who has handed out and received stock options. I have found to my surprise that prospective employees that I have spoken with regarding this topic leave me with the distinct impression that they have sat through job interviews listening to a company executive or recruiter talk about subjects such as “incentive and nonqualified stock options”, “vesting periods”, “strike price”, and “dilution”, nodding their heads in mute agreement, as if they understood everything.

First off, if you are serious about assessing equity incentives, and stock options in particular, you need to familiarize yourself with the lingo. I have included the Hub Tech Insider’s Glossary of Stock Options Terminology below, at the conclusion of this article. If you want to know the difference between incentive stock options (ISOs), nonqualified stock options (NSOs), and Restricted Stock, then I will attempt to shed some light on the confusion by writing about the different types of stock options.

Incentive Stock Options qualify for preferential tax treatment – the key preference being that the recipient can delay paying taxes on stock acquired by excercising the option until the stock is actually sold. If the recipient sells the stock right away, any gain is treated as ordinary income, which gets taxed at the same rate as your salary; but if the stock is held for a year, any gain qualifies as a capital gain, which is taxed at a maximum of 20%.

It is important to note that incentive stock options can only be granted to employees (as opposed to consultants or other contractors). Nonqualified options can be handed out to consultants, contractors, outside directors, and anyone else the company wants, but the recipient pays taxes on the difference between the excercise price of the option and the value of the shares as ordinary income as soon as the shares are acquired, rather than when the shares are sold. That means the recipient may wind up paying taxes before receiving any money.

Restricted stock can best be thought of as a mirror image of incentive stock options. Instead of being made available for purchase over a period of time, as incentive stock options are, restricted stock is given out all at once when an individual joins a company, usually with the restriction that it be sold or given back to the company if the employee leaves the company before a certain period of time has gone by. The reason more companies are making restricted stock available to certain senior executives is that it offers a potential tax advantage: because executives get their hands on the stock as soon as they join the company, they have a god shot at fulfilling the one-year holding period necessary to qualify for capital gains treatment on any profits from the eventual sale of the stock. Given how fast some companies are going public or are acquired, the capital gains treatment can result in significant tax savings.

The Hub Tech Insider Glossary of Stock Option Terminology:

Above Water – Options allowing the purchase of shares of stock for less than the market price are said to be “above water”.

Authorized Shares – The number of shares of stock available for a company to issue.

Bearish – Having a negative opinion about the future of the stock market.

Bullish – Having a positive opinion about the future of the stock market.

Capital Gains – The profit gained from the sale of an investment, such as stock, which is taxed at lower rates than ordinary income.

Cashless Exercise – Allows an individual to temporarily borrow the money needed to excercise options by selling some of his/her stock in order to cover the cost of the remaining shares.

Cliff Vesting – Allows option holders to excercise some or all of their options at once, such as after the first year of employment, instead of incrementally over a period of several quarters or years. (See Vesting Period)

Equity – Common stock in a company.

Exercise – The act of acquiring stock promised by an option.

Exercise Price – The price at which an option holder may buy shares of stock. Often referred to as the strike price.

Expire – Options are typically granted for a definite period of time. If individuals do not excercise the options before a specified date, they expire (meaning they are forfeited).

Forfeit – Employees forfeit or forego their right to exercise their options by leaving a company before all the options have vested – or by not exercising them before their date of expiration because they are “under water”.

Founders Stock – Shares in a company held by the initial founders, usually subject to certain restrictions as to their disposition.

Fully Diluted Capitalization – The total number of shares outstanding or set aside for issuance (such as shares in a stock option plan).

Immediate Vesting – When one company has been bought by another, all options that have been issued by the acquired company are automatically available for immediate excercising, or vesting.

Incentive Stock Options (ISOs) – ISOs can only be granted to employees, as opposed to outside consultants or contractors. Their advantage is in allowing holders to acquire stock without paying taxes on their gain in value until they sell the stock.

Incremental Vesting – Period of time during which options become vested gradually, such as quarterly, which is specified in an option agreement. Such vesting is also referred to as vesting on an incremental basis.

Initial Public Offering (IPO) – An IPO is a company’s first sale of stock to the public.

Insider – An insider is any officer, director, advisor, or investor of a company that is public or about to go public. Because of his or her inside knowledge of a company’s financial plans, an insider is restricted in trading the company’s stock based on information not disclosed to the public.

Liquidity – How easily an investment holding can be converted into cash. Shares of stock are liquid if there is a ready market for those shares, meaning that the shares are available to be bought and sold. If a company is privately held, the stock is sai to be illiquid.

Lockup Period – A period of time that insiders of a company are required by an underwriter to hold onto shares of stock gained from exercising options before being allowed to sell. Once individuals exercise options, they may not sell these shares for the entire lockup period, often one year.

Long-term capital gains – Profits from an investment held longer than one year. These gains are subject to tax rates that can be as high as 20%.

Nonqualified Stock Options (NSOs) – NSOs can be granted to anyone (employees, outside consultants, contractors, directors, and others). However, the receipient pays taxes on the difference between the price of the options and the value of the shares as soon as the shares are acquired, rather than when the shares are sold.

Offering Statement – A statement prepared by the underwriters and distributed to potential investors before a company goes public.

Option Agreement Letter – Document given by a company to an employee to legally grant options.

Option Grants – The number of shares a recipient can acquire via options.

Ordinary Income – Income subject to regular income tax rates, such as salary.

Par Value – The monetary value shown on a security.

Phantom Stock – Can be converted into real stock at some point in the future when certain predetermined events occur. Often referred to in the context of executive bonus plans tied to increases in a public company’s share price.

Preferred Stock – A class of stock that has advantages over common stock in the event of a sale or liquidation of the company.

Privately Held – A company that is owned by one or several individuals or institutions but not by the “public”. Shares of privately-held companies are said to be illiquid.

Publicly Held – A company is considered publicly held – or owned by the public – if its shares are traded on a public stock exchange (like the New York Stock Exchange or NASDAQ). A company can be publicly held even if the majority of its shares are still owned by the company’s original founders and investors.

Registration Statement – A statement required by the SEC in order for a company to conduct an IPO.

Repricing Options – When companies, usually publicly held, adjust the prices on stock options lower in consideration of a decline in their share prices that may place their employees’ stock options ‘under water’. Companies shy away from this practice because it means incurring an accounting charge against profits.

Restricted Stock – Stock available for purchase immediately upon joining a company, but subject to vesting and other conditions.

Securities and Exchange Commission (SEC) – The federal agency charged with ensuring that the investing public has access to all of the relevant and materail information about every public company traded on a US market.

Shares – Ownership in a company.  Usually referred to as shares of stock.

Shares Authorized – The number of shares of stock that a company is allowed to issue, whether they are outstanding or are held in treasury by the company.

Shares Outstanding – Stock held by investors, as opposed to shares held in the company treasury.

Short-term Capital Gains – Profits from an investment held less than one year. These gains are subject to taxes at regular income tax rates, which often exceed 20%.

Spread – When options are “above water”, the spread is the difference between the grant price and the stock’s market value.

Stock – Equity or ownership ina company commonly referred to as common
stock.

Stock Option Plan – An employee incentive plan that allows employees of a company the option to buy shares of stock in the company at a specified price at some point in the future.

Stock Options – These grant the right, but not the obligation, to buy shares of stock at a specified price within a particular time interval, and with a specific expiration date.

Stock Purchase Plan – A plan to encourage employees to take a personal financial stake in the company by offering shares of stock for purchase at a discount – usually in the range of 10-15% – over their “open market” purchase price.

Stock Split – Companies will often declare a split, often a 2-for-1 split, which will reduce by half the price per share and double the amount of shares outstanding.

Strike Price – The price at which an option holder may buy shares of stock. Often referred to as the exercise price.

Under Water – If an option does not allow the purchase of shares of stock for less than the market price of those shares, the option is said to be “under water”.

Underwriters – Investment bankers who in effect buy a stake in the company and then sell this stake to the public. The underwriter guarantees a minimum price for the sale of the company in return for a premium on the shares sold to the public if demand outstrips supply.

Venture Capital Firms – Investment vehicles funded by wealthy individuals looking to take risky stakes in promising new companies and technologies in return for both control and a share of future profits.

Vesting Period – Period of time during which the option holder is allowed to exercise incrementally more options that have already been granted. Vesting typically occurs over periods of three to five years in corresponding increments of 20% to 30% vested per year.

Warrants – An investment vehicle similar to options, allowing for purchase of stock at a specific price before a particular date or in the future.





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You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Senior Technical Project Manager at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

How many Massachusetts based companies are listed in the Fortune 500? April 23, 2010

Posted by HubTechInsider in Investing, Management, Manufacturing, Massachusetts High Technology, Military Contracting, Technology.
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There are 13 companies listed in this year’s Fortune 500 index of America’s largest corporations. The chart below lists all 13 Massachusetts-based companies that are in the Fortune 500, their headquarters town in Massachusetts, their rank in the Fortune 500, their 2008 revenues (in millions), and number of employees.


We can see that the 13 corporations in the Fortune 500 index of America’s largest corporations that are based in Massachusetts had combined 2008 revenues of $193 Billion dollars and employed a combined 530,000 people worldwide.


Waltham was the Massachusetts city with the most Fortune 500 company headquarters based within its borders, with three of the companies listed being based in the Watch City. Two were based in Cambridge, two in Framingham, two in Natick, two in Boston, and one each in Springfield and Hopkington.


Thirteen Massachusetts based companies are listed on the Fortune 500 index of America's largest corporations

Thirteen Massachusetts based companies are listed on the Fortune 500 index of America's largest corporations


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How to be a High Flying Project Manager (or, “How Programmers View Project Managers”) March 16, 2010

Posted by HubTechInsider in Definitions, Management.
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[A touch of Project Manager humor for you today, Dear Readers –Paul]

A man is flying in a hot air balloon and realizes he is lost. He reduces height and spots a man down below. He lowers the balloon further and shouts:

“Excuse me, can you help me? I promised my friend. I would meet him half an hour ago, but I don’t know where I am.”

The man below says, “Yes, you are in a hot air balloon, hovering approximately 30 feet above this field. You are between 40 and 42 degrees North latitude, and between 58 and 60 degrees West longitude.”

“You must be a programmer,” says the balloonist.

“I am,” replies the man. “How did you know?”

“Well,” says the balloonist, “everything you have told me is technically correct, but I have no idea what to make of your information, and the fact is I am still lost.”

The man below says, “You must be a project manager”

“I am,” replies the balloonist, “but how did you know?”

“Well,” says the man, “you don’t know where you are or where you are going. You have made a promise which you have no idea how to keep, and you expect me to solve your problem. The fact is you are in the exact same position you were in before we met, but now it is somehow my fault.”

Structuring Venture Capital Deals: M.I.T. Enterprise Forum Panel Discussion (Video) December 1, 2009

Posted by HubTechInsider in Conferences, events, Management, Startups, Venture Capital.
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Structuring Venture Capital Deals: M.I.T. Enterprise Forum Panel Discussion (2-Hr Video)

With Joseph Hadzima, Jr., Moderator. Jorge Contreras, Jr., Stanley Fung, Gregory Moore, Paul Severino

Hosted by The Massachusetts Institute of Technology Enterprise Forum

20 January, 2000
MIT’s Kresge Auditorium, Cambridge, Massachusetts

Although this presentation was given at a different era and time in the Boston venture capital ecosystem life cycle, nonetheless the august panel does a superb job of presenting the material concisely and throughly, to the point of making this video a must-watch not only for the methodical outlining of the step-by step preparations an entrepreneur must make before approaching venture capitalists for equity funding for their companies, but also for the exhaustive definitions of venture capital deal terms and deal points given and the illuminating perspectives offered by the various parties involved in a venture capital deal for a venture capital funded company.

This video lasts approximately two hours. I was in attendance at the conference, and if you look very closely, you can see me in the audience in one of the audience questions shots, during the questions-and-answers period after the primary discussions (I’m in a suit and tie).

Please leave comments as to how you think things may have changed in the time since this presentation, how things may have remained the same, and how perspectives and deal flows and volumes may have changed or stayed the same.

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You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. I have been working in the software engineering and ecommerce industries for over fifteen years. My interests include computers, electronics, robotics and programmable microcontrollers, and I am an avid outdoorsman and guitar player. You can connect with me on LinkedIn, follow me on Twitter, follow me on Quora, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m a Technical PMO Director, I’m a serial entrepreneur and the co-founder of several ecommerce and web-based software startups, the latest of which are Twitterminers.com and Tshirtnow.net.

What is Theory Y? How is it used as a management style? November 29, 2009

Posted by HubTechInsider in Agile Software Development, Definitions, Management, Project Management.
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What is Theory Y? How is it used as a management style?

As I have said on these pages before, I needed to write a few short pieces on some of the different management styles I have encountered in my corporate and professional travels. I want to define each of these management styles so that I can compare and contrast them, as well as serving as reference points for the longer articles on this topic which I am in the process of drafting.

As I have previously stated, the purpose of this litany of alphabetic management styles is not to promote one over another; in fact, I don’t recommend adopting any of these naively. But nevertheless, many individual team members and managers will exhibit some behaviors from one of the above styles, and it is helpful to know what makes them tick. Finally, certain individuals may prefer to be managed as a Theory X or Theory Y type (Theory Z, which I will write about at a future date, is less likely in this case), and it is good to be able to recognize the signs. Moreover, some companies might be implicitly based on one style or another.

The second management style about which I will write is one which will be perhaps less recognizable to many people than the aforementioned “Theory X“: “Theory Y”.

As opposed to Theory X, Theory Y holds that work is a natural and desirable activity. Hence, external control abd threats are not needed to guide the organization. In fact, the level of commitment is based on the clarity and desirability of the goals set for the group. Theory Y posits that most individuals actually seek responsibility and do not shirk it, as proposed by Theory X.

A Theory Y manager simply needs to provide the resources, articulate the goals, and leave the team alone. This approach doesn’t always work, of course, because some individuals do need more supervision than others.

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You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

What is Theory X? How is it used as a management style? November 27, 2009

Posted by HubTechInsider in Agile Software Development, Definitions, Management, Project Management, Staffing & Recruiting.
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I needed to write a few short pieces on some of the different management styles I have encountered in my corporate and professional travels. I want to define each of these management styles so that I can compare and contrast them, as well as serving as reference points for the longer articles on this topic which I am in the process of drafting.

I will begin with some of the “Letter Management Styles”, of which there are several. The purpose of this litany of alphabetic management styles is not to promote one over another; in fact, I don’t recommend adopting any of these naively. But nevertheless, many individual team members and managers will exhibit some behaviors from one of the above styles, and it is helpful to know what makes them tick. Finally, certain individuals may prefer to be managed as a Theory X or Theory Y type (Theory Z, which I will write about at a future date, is less likely in this case), and it is good to be able to recognize the signs. Moreover, some companies might be implicitly based on one style or another.

The first management style about which I will write is one which will be recognizable to every person, regardless of professional or personal background: “Theory X”.

Theory X is perhaps the oldest management style and is very closely related to the hierarchical, command-and-control model used by military organizations (of which I am intimately familiar).

One thing I can personnally attest to in regards to the Theory X management style is that it maintains the military organizations’ faith in the fact of the necessity of this approach, as (in the view of Theory X proponents) most people inherently dislike work and will avoid it if they can. Hence, in the Theory X management style, managers should coerce, control, direct, and threaten their workers in order to get the most out of them.

A statement that I recall from a conversation with a prototypical Theory X manager with whom I worked (in a prototypical Theory X organization) with was “people only do what you audit”.

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You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

What is Six Sigma? How is it used, and what does it have to do with the CMM? November 27, 2009

Posted by HubTechInsider in Agile Software Development, Definitions, Management, Manufacturing, Products, Project Management, Technology.
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What is Six Sigma? How is it used, and what does it have to do with the CMM?

Developed by Bill Smith at Motorola in 1986, Six Sigma is a management philosophy based on removing process variation. It was heavily influenced by preceding quality improvement methodologies such as Quality Control, TQM, and Zero Defects. Six Sigma is a registered service mark and trademark of Motorola Inc. As of 2006, Motorola had reported over $17 Billion in savings from their own employment of Six Sigma practices throughout their global enterprise. Early corporate adopters of Six Sigma who achieved well-publicized success through the application of six sigma best practices to their enterprises included Honeywell (previously known as AlliedSignal) and General Electric, where Jack Welch famously introduced and advocated the method. By the late 1990s, about two-thirds of the Fortune 500 organizations had begun Six Sigma initiatives with the aim of reducing costs and improving quality.

My own professional experiences with Six Sigma began in the early 1990’s (I had first read about it in a Forbes magazine article in 1988) when I worked in manufacturing environments at Mercedes-Benz USA’s plant in Tuscaloosa (Vance), Alabama as well as Phipher Optical Wire Product’s plant in Tuscaloosa, the same city where the University of Alabama is located. It was in these environments where I was tasked with learning about six sigma and spent many hours in classrooms and factory floor and management workgroups implementing and training for a six sigma blackbelt. Six Sigma Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects. They devote 100% of their time to Six Sigma. They primarily focus on Six Sigma project execution, whereas what are known in the Six Sigma universe as Six Sigma Champions and Master Black Belts focus on identifying projects/functions for Six Sigma.

Implementing a Six Sigma program in a manufacturing environment means more than delivering defect-free product after final test or inspection. It also entails concurrently maintaining in-process yields around 99.9999998 percent, defective rates below 0.002 parts per million, and the virtual eradication of rework and scrap. Other Six Sigma characteristics include moving operating processes under statistical control, controlling input process variables as well as the more traditional output product variables, and maximizing equipment uptime and optimizing cycle time. In a six sigma organization, employees are trained and expected to assess their job functions with respect to how they improve the organization. They define their goals and quantify where they are currently, their status quo. Then they work to minimize the gap and achieve “six sigma” (in a statistical sense) by a certain date.

Six Sigma focuses on the control of a process to ensure that outputs are within six standard deviations (six sigma) from the mean of the specified goals. Six Sigma is oftentimes implemented using a system with which I have worked many times: define, measure, improve, analyze, and control (DMIAC). Sometimes this same system is referred to as define, measure, analyze and control, or DMAIC.

Define means to describe the process to be improved, usually through some sort of business process model.

Measure means to identify and capture relevant metrics for each aspect of the process model. I have been in classrooms where this is referred to as “Goal -> Question -> Metric”.

Improve obviously implies changing some aspect of the process so that beneficial changes are seen in the associated metrics, usually by attacking the aspect that will have the highest payback.

Analyze and Control means to use ongoing monitoring of the metrics to continuously revisit the model, observe the metrics, and refine the process as needed.

Although some organizations apparently strive to use Six Sigma as a part of their software quality improvement practices, the issue that often arises is finding an appropriate business process model for the software development effort that does not devolve into a highly artificial simulacrum of the waterfall SDLC (Software Development Life Cycle) process.


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You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

What is Scrum? How is it used to manage projects and teams? November 25, 2009

Posted by HubTechInsider in Agile Software Development, Definitions, Management, Project Management, Software.
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As I continue to move in the Boston software development / high tech job market and talk to more and more people in the area, I not only come across the term “Scrum” in many job descriptions, but it is a word that is frequently bandied about by both recruiters and hiring managers. It is clear that there is alot of confusion in the Boston area about what “Scrum” really is, and how it relates to Agile.

There is no substitute for the experience of running Scrum daily for years, as I have done. My heartfelt advice to anyone looking to adopt Scrum in their organization is to be flexible, take it easy on the cutsey names, and keep the daily meetings very brief. If you are the “ScrumMaster”, stay organized and lead the conversation around the room, notating all limiting factors, as that becomes your to-do list. Drop me a line with your own insights or comments on Scrum!

Scrum, as some people already know, is a project managemnt methodology named after a contentious point in a rugby match. The Scrum project management method enables self-organizing teams by encouraging verbal communication across all team members and project stakeholders. At its foundation, Scrum’s primary principle is that traditional problem definition solution approaches do not always work, and that a formalized discovery process is sometimes needed.

Scrum’s major project artifact is a dynamic list of prioritized work to be done. Completion of a largely fixed set of backlogged items occurs in a series of short (many of 30 days duration) iterations, or “sprints”.

Every day a brief meeting or “Scrum” is held in which project progress is explained, upcoming work is described, and impediments are raised. A brief planning session occurs at the start of each sprint to define the backlog items to be completed. A brief postmortem or heartbeat retrospective occurs at the end of each sprint.

A “ScrumMaster” (my advice is to never call yourself this in actual human life in an office of programmers and IT personnel…but know the job well and do it well nevertheless if you are the individual who finds themselves in this role) removes obstacles or impediments to each sprint. The ScrumMaster is not the leader of the team, as they are self-organizing, but rather acts as a productivity buffer between the team and any destabilizing influences.

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Want to know more?

You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

What is “management by walking around”? June 13, 2009

Posted by HubTechInsider in Agile Software Development, Management, Project Management, Uncategorized.
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Sometimes also called “Management by walking around” or MBWA, management by sight is a management strategy that can and should be integrated into any management style or approach. It is very people-oriented and it requires managers to be visible and interact heavily with project team members. Interactions at all levels of the project team foster the quick and efficient gathering of information about the project and the project team members.

Management by sight is very direct and the manager practicing it utilizes observation and visibility to conduct project analysis and project leadership, to monitor the situation, and to provide control when necessary.

I have had a great amount of success using this management technique and I thought I would share with you twelve guidelines for MBWA which were shared with me by @sjohnson717 on Twitter in response to this original MBWA post. These tips are great and I recommend following them when using this very simple and effective management technique.

Simple and effective management techniques are what every manager needs more of these days!

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You’re reading Boston’s Hub Tech Insider, a blog stuffed with years of articles about Boston technology startups and venture capital-backed companies, software development, Agile project management, managing software teams, designing web-based business applications, running successful software development projects, ecommerce and telecommunications.

About the author.

I’m Paul Seibert, Editor of Boston’s Hub Tech Insider, a Boston focused technology blog. You can connect with me on LinkedIn, follow me on Twitter, even friend me on Facebook if you’re cool. I own and am trying to sell a dual-zoned, residential & commercial Office Building in Natick, MA. I have a background in entrepreneurship, ecommerce, telecommunications and software development, I’m the Director, Technical Projects at eSpendWise, I’m a serial entrepreneur and the co-founder of Tshirtnow.net.

management, mbwa, management by walking around, it management, it, information technology, project management

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