A SIX-MONTH CULTURAL

TRANSFORMATION
THE PENTA STORY

APRIL 2020

The Company
Penta Technologies, founded in 1991, is a family-owned
construction software company located in Milwaukee, WI.
They support construction back-office services with an
CASE STUDY accounting and finance ERP system, a labor productivity suite,
and payroll tools customized for the construction industry.

The Challenge
Penta Technologies has, for years, run like a construction
company that operates in the cynefin simple space, rather than a
progressive software company that runs in the cynefin complex
space. The software platform was built to meet the unique needs
of its customers, and the customers would often pay for features.
Because of this model, customers controlled the functionality,
and the product became more and more complex and
challenging to scale. Over time, this led to a mammoth, dispirited
product that was difficult to enhance, implement, and support.
the company Contract negotiation and fighting customer emergencies
ruled the day. Employees were distracted with constant
context switching from one effort to another. The frequency of
delivery was slow and inconsistent. Silos of specialty were

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 CASE STUDY | SCRUM
A Six-Month Cultural Transformation | The Penta Story

only getting more in-depth, which led to a over 20 years, had previously held roles
complete disconnect between creating value leading sales, product management,
and doing work. A change was needed. channel development, marketing, customer
service and consulting, but had never seen
people work so hard for so little progress.
The Solution
When I realized the entire product
In 2018 the ownership recognized the severity development organization needed a
of the situation and went on a mission to redesign, I was eager to take on this new
find software leadership with a proven track challenge as COO. While I understood the
record of building high-performing profitable theoretical difference between waterfall
software businesses. Bill Wagner, now Penta and agile, I didn’t realize how powerful
Technologies President, and Laura Henderson, this transformation would be or how
now COO, joined Penta with the mission quickly it would change everything.”
to stabilize and scale the business. At the
onset, they didn’t realize the full extent of
the cultural challenges, but both were willing The leadership team didn’t start by
to roll up their sleeves, and jump right in implementing Agile processes, but instead
bringing both experience and an open mind. initiated by focusing on identifying the core
problems and the most significant sources
Leadership Changes of waste. In June 2019, at an all-employee
company meeting, Henderson announced
When Henderson and Wagner first joined
that they were going to partner with everyone
Penta, there was a disproportionate number
in the organization to figure out the best
of executives leading the 75-person team.
structure for the business. During this offsite,
While well-intended, this executive team
the employees identified the issues they
of seven created a lot of overhead and
wanted to see fixed in the new organization:
confusion. By the start of 2019, the team
was reduced to three, Wagner, Henderson, • Remove functional silos
and Karl Koenig (the CEO), which simplified
• More ownership in the work
the decision making and allowed space for
the team to identify the most urgent issue, • Remove unnecessary and complex processes
optimizing the product development teams. • Stop micromanagement and improve trust
• More focus on value
How It Began
Over the next 30 days, several employees
researched different organizational structures
Henderson’s Perspective: and collectively decided on a team-
based, servant-leadership organizational
“I felt like I was looking at the business
structure through a move to the Scrum
through a pair of binoculars; the more
framework. With a deeper level of buy-in,
we were able to eliminate waste and get
it was time to start their agile journey.
focused on the real problem, the more
transparent the picture came into focus. While this the decision to move to Scrum may
I had been a technology executive for sound very linear and clean, it’s important to

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 CASE STUDY | SCRUM
A Six-Month Cultural Transformation | The Penta Story

note we started the Scrum journey in a trial and • Alignment around the goal for everyone
error manner. A number of internal projects to be able to speak the same “Scrum
and teams focused around components of language” to be validated by everyone
products just started using Scrum, with the in the organization passing the Scrum.
interpretation they had from self-learning While org Professional Scrum Master I (PSM I)
it was messy (sloppy use of terminology, ad hoc certification assessment
training, follow only parts of the framework, • Performing an exercise with everyone to self-
and people were split across multiple teams) select in the formation of new teams
we recognized the benefits (increased
employee motivation, better cross functional • Alignment on changes to the
communication, better project results). It was organizational structure
apparent that a more intentional, organizational- • Alignment on the measurement of success
wide effort would reap significant benefits.
On the call, Henderson, as she typically does,
had a well thought out and constructed
Getting Started with Help plan; however, because she was so open to
After careful evaluation of the product constructive feedback, she felt a sense of
strategy, the customers, codebases, and relief that she could turn the process over
marketplace the team determined there to someone else who had done it before.
were three products Penta Technologies had
that would yield a return of investment. Henderson, Wagner and Bubolz all knew
from the openness and transparency of the
The first was their core construction ERP discussion; this would be a great partnership.
system, the second was a construction labor
productivity suite, and a third was a new
construction payroll system. Henderson and the Bubolz’s Perspective:
leadership team reached out to a few different
coaches and trainers to find someone to help “During my initial discussion with Bill
and Laura for this engagement, I saw a
them. During the initial call with Jeff Bubolz
company that was hungry for organizational
and Jeff Maleski, consultants with Humane
change. Often organizations think of
Consulting and Scrum.org Professional Scrum
team self-selection as a radical change.
Trainers, they provided direct constructive Still, after hearing the problems with
feedback around the approach. They helped engagement and the culture of micro-
set a different direction on how to restart management that had taken place in the
their agile journey. Major changes included: past, I knew that self-selection would be
• Everyone in the organization needed to a very impactful activity that would show
understand the impact of moving to Scrum the Development Teams that leadership
was serious about organizational change.
and how it would change how they worked.
This included putting the entire team When I met with the executives, directors,
through the 2-day Scrum.org Professional Product Owners, and Scrum Masters,
Scrum Foundations (PSF) training I found that many of them had seen
me speak multiple times before. Very
• Fully committing to Professional Scrum for
quickly, I had built up a lot of rapport. I
the first 90 days with no deviations
was quickly able to jump into a coaching

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 CASE STUDY | SCRUM
A Six-Month Cultural Transformation | The Penta Story

and advisory role. I wanted them to know There were several passionate debates on
what they were getting if they decided who should be on which team, but by the end
to move forward with me, helping them of the time-box, the Development Team had
on their agile journey. If they were self-selected into teams within the leadership
looking for someone who was only going teams guiderails. Interestingly, both the
to work at the team level or someone development manager and Henderson were
who would not address the broader out during this week, allowing freedom and
systematic issues, I was not their person.” space for this effort to happen on its own.
After team self-selection the three products
Kicking Off the Journey
looked like the below picture (figure 1),
Immediately after training, we tackled each product had a unique Product Owner.
team formation. Everyone on the different The Core product had one Scrum Master
Development Teams was brought together that served on both teams, and the Payroll
for a whole day team self-selection event. and Labor Productivity products shared a
In this event, leadership set guiderails for all Scrum Master. Each of the Development
the teams; they included items, such as team Teams were dedicated to their products.
size, skills needed, and being able to deliver
customer value from concept to cash. The next week, the new teams started
working with Bubolz to create their definition
Development Team members then self-selected of “Done”, working agreements and start
into teams aligned around the three product building and refining Product Backlogs for
areas. 80% of the self-selection was easy; the the three Products, and then they were off
remaining 20% had several conflicts where Sprinting. Like many teams that start using
individual Development Team members had Scrum, they had Product Backlog Items broken
every opportunity to solve the conflict on their down into waterfall phases (Analysis, Design,
own. When an impasse was found Bubolz Develop, Test, Deploy) and they needed
and Maleski facilitated conflict resolution. to split work by value and outcomes.

Figure 1.

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 CASE STUDY | SCRUM
A Six-Month Cultural Transformation | The Penta Story

After the first Sprint, all three products had with having everyone in the organization
a “Done,” potentially releasable increment, bought in 100% to the change.
that could be released to production. Some
I worked with many leaders teaching
Product Owners did release their Increment them on how not to define best
to production, and other Product Owners practices for the teams, but rather to
decided not to ship the Increments that had give them space to experiment with
been created as of yet. During the first couple different complementary practices. The
Sprints, Product Owners created outcome- Development Teams were looking for
based roadmaps to tell the stories of the Product Owners, Scrum Masters, and
Product Backlogs. The amount of transparency Leaders to make decisions for them.
in the organization was at a level that people
had never seen from the product organization. I coached the Product Owners, Scrum
Masters, and Leaders to create space, align
on the vision or outcomes they desire, and
set guiderails for self-organization. There
Bubolz’s perspective
were many times when this was going on
“Over the course of 2 weeks, we: that I needed to coach myself with the
same advice and remind myself not to solve
• Ran two, two-day Professional the problem. It is difficult for everyone
Scrum Foundations (PSF) courses to leave space for self-organizations.
• Did team self-selection to align I would ask the Development Team how
around 3 products, with a Product they want to do something regarding the
Owner for each product process, and no one would say anything.
• Refined 3 different Product Backlogs I needed to count in my head for 8 to
with enough work to get started 10 seconds or more at times before
working in a value focused way someone would speak up. I think there
was some disbelieve that they were
• Aligned each product around going to be able to own the process for
a Definition of “Done” how they deliver working products.
• Established a working agreement It felt like the Development Teams were
for how we were now going just waiting for someone to pull the rug
to work together. out from under them and say we were
just joking you don’t get to decide how
This was a lot of change really fast for
you work.. It took time for the teams to
an organization that had been working
trust that this change was happening,
in a waterfall fashion for decades and
and no one was going to make these
despite all of this change each Scrum
types of decisions for them anymore.”
Team was able to create a “Done” working
product Increment that shipped or could
have been shipped to production.
During the first few Sprints, all of the teams
In my, experience having all products did a lot of experimenting with different
get to “Done” this quickly is not the tactical practices. They often tried something
norm. The only way this happened is for a Sprint or two and then refactored the
practices they were using until they found

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 CASE STUDY | SCRUM
A Six-Month Cultural Transformation | The Penta Story

some norms that worked well for the teams. It unplanned work as it happened. These three
took some change of mindset that this was not events were taking around an hour each day.
wasteful, but it was adapting based on what
Refinement was happening in one big group,
they learned about how they worked together.
and then splitting out and doing Refinement
Each of the teams embraced different practices with each team, there was always a person
that worked well for them in their context. missing on the team, and the team felt
The teams shared what was working well and they needed more people in the room. The
what didn’t work well. What they found is that Development Teams struggled with their
many things that didn’t work for one team deep silos of knowledge and not having all
worked well for a different team because the business and technical expertise required
their context was different. This ownership on each team. The Development Teams
of the practices on the teams lead to higher suggested that they merge into one big
engagement and ownership of the work. team of 16 people. Bubolz and Henderson
both had concerns about the team size, and
shared the concerns with the team. They
Henderson’s perspective: brainstormed together to find ways to mitigate
those concerns. Bubolz worked with the
“I had very little involvement during the
teams to come up with some complementary
kickoff phase, just following the training
practices to alleviate these concerns.
and passing my Professional Scrum
Master I certification. I went to Italy to By the end of the third Sprint, the Development
stand up at my brother’s wedding. We Team was able to do Daily Scrums in around
were going through the most significant 10 minutes with a 16-person Development
organizational change I had ever Team and come out of the event, inspecting
implemented. It took courage to simply their progress toward the Sprint Goal and
show my commitment and then turn the adapting their plan for next 24 hours.
work over to the teams to execute without
my involvement. Doing this was a genuine The Development Team moved into one big
endorsement of my level of trust to them. area, created a physical Sprint Backlog, and
walked the board most days. They used the
When I returned, we did allow every team
complementary practice of the 16th minute
to redesign their workspace. We purged
to sync on more in-depth items right after
truckloads of waste, and each team created
the Daily Scrum. Refinement became more
an environment that reflected their team.”
of an activity that smaller groups would self-
organize around and bring back to the larger
Merging Teams group to get a greater understanding.
After Sprint one, the two ERP Core Scrum
While the Development Team was working
Teams found that there was a lot of overlap
this out, there was talk about leadership
because of the deep silos that people had.
interceding and splitting the teams in two.
They found that they ended up having a Daily
Leadership learned about the importance of
Scrum for each team and then had to have
leaving space for self-organization to happen
another full team Daily Scrum and then there
from the past few Sprints, and stayed the
was another support meeting to talk about
course and let the Development Team

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 CASE STUDY | SCRUM
A Six-Month Cultural Transformation | The Penta Story

figure it out. During this time, there were a for two conflicting things from the most
lot of questions in the Sprint Reviews about senior leaders, let go and trust while
how the Development Team would handle still being ultimately accountable.
their size. As the Development Team found Through conversations, I recognized that
more and more ways to mitigate the concerns, there was not a frequent cadence for the
leadership became more and more comfortable leadership team to meet and strategize on
with the team’s decision to combine into one how they were going to handle different
team as they continued to deliver value and problems. I worked with Jeff (Bubolz)
provide transparency to the organization. to set up a cadence for the leadership
team to review their approach and get
Financial Pressures alignment on how to move forward.
During this time, we had some passionate
Everything seemed positive after the first three debates about financial transparency,
Sprints, and then the honeymoon period wore urgency, accountability, and what should
off. As the teams focused more holistically on be shared and not shared and with whom.
the products, the revenue from paid customer
work slowed to a trickle. The two greenfield In these meetings, spirited debate was
products were not ready for the market even the norm as we gained alignment on
though they were making good progress on where we are going as an organization.
getting done functional pieces of software. I often had to remind leaders to fight
the urge to jump in and save everyone,
The business pressure put pressure on which would ultimately hurt all the
Henderson, and the leadership team to momentum we had gained thus far.”
share the finances with more people in the
organization than they ever had. Now the
Customer Validation
Product Owners, Scrum Masters, managers,
and executives all had the same pieces of With the rising pressure of the financials,
financial information. Henderson and Bubolz came more and more pressure to reduce
lobbied with the executive team to give financial risk, by proving the riskiest assumptions on
transparency to the Development Teams, but the greenfield products with real customers.
the level of that transparency was under debate. The teams requested someone to be added
They are working toward budgets aligned to the team to help from a user experience
around products. Once product budgets are perspective. Doing this proved to take longer
in place, they anticipated having financial than the teams felt comfortable with, so they
transparency with the Development Teams. started creating paper prototypes and doing the
UX work themselves. There was a need to get
in front of real customers and the Development
Henderson’s Perspective Team didn’t think this was something they
could do on their own. They reached out in
“While I was amazed at the progress, the organization to find help and what they
we had made in just a few months, I ended up doing was spinning up a separate
had concerns that there was too little cross-functional team of sales, marketing,
communication about what was happening Scrum Masters, and Product Owners to find
in the work with the executive teams. customers to validate the initial designs.
I had full appreciation we were asking

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 CASE STUDY | SCRUM
A Six-Month Cultural Transformation | The Penta Story

After a few weeks, this company cross-functional some of it, but I resisted the urge to do
team was not moving fast enough for the this for the team. I ended up setting up
Scrum Team, so they took this impediment a few different meetings, aligning some
back and asked for someone with deep conversations with consultants that could
user experience skills to be added to the help, and just generally got the ball
team to build up the skill sets in this area. rolling. It was great to see the team take
The Development Team decided that the ownership of the user experience and
simplest thing that could work was to start jump into the unknown with both feet.”
with other employees in the company to get
user feedback. The second thing they did Technical Excellence
was ask the whole company if they had any Many of the people on the Development
close relationships with people that fit specific Team had only worked at Penta, and there
personas in the construction industry and get was a concern on the Development Team
time setup with these people to get feedback. that they didn’t know what they didn’t
They then found out that the list of things understand from an architectural standpoint.
they wanted to validate with customers was Leadership was made aware of this issue,
getting huge, and they needed to prioritize and they worked with the Development
this list just like typical Product Backlog Team to find a couple of outside consultants
Items (PBIs). The Development Team worked to help validate their technical assumptions
with the Product Owner to come up with a and come up with modern approaches to
prioritization technique to prioritize these items great products with technical excellence.
with minimal effort. These user experience PBIs The Development Teams drove the agendas
were then added to the Product Backlog and with the consultants, and they tackled the
prioritized alongside all other features. With riskiest areas first. One consultant that the
this new prioritization technique in place, they team selected had a day job working for an
now had a strategic approach to mitigating industry leading software company, but was
usability concerns with their new product. willing to do some consulting on the side.
Therefore, the Development Team setup a
pizza and beer mob programming session
Bubolz’s Perspective that started late afternoon and went into the
“There were so many great things that evening. The plan for these sessions was driven
were going on at this point, but the one by the Development Teams to help them
thing that kept me up at night when solve the most urgent problems. In these mob
I thought about Penta was customer programming sessions, there were developers
validation. There was not enough of it from many different products, all working on
happening. I was lightly nudging in the a single product problem. Doing this led to
first Sprint about this, but several Sprints shared knowledge and cross-team collaboration.
later as the nudges became more insistent,
little was done to address this issue.
A Lesson on Transparency
I kept bringing it up to pretty much During the 7th Sprint, one of the teams
anyone who would listen. There were a changed their Definition of “Done” because
few times when I almost just started doing it was unclear what they were doing and

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 CASE STUDY | SCRUM
A Six-Month Cultural Transformation | The Penta Story

what they were not doing. In the Sprint and helping them to have empathy for what
Review with the stakeholders, this topic was the leadership team has on their plate.”
quickly covered, and because it was the
holidays, several people were missing.
The Results
After the Sprint Review, it became clear
The positive energy in the company is at
that automated testing was no longer on
an all-time high. Before the change, over
the definition of “Done” and had not been
67% of people thought there was a lot
completed on any of the previous Increments.
of negativity at Penta; 3 months after the
Most of the stakeholders were surprised about
change, only 12% of people said that there
this realization and this eroded trust with them.
was a lot of negativity. People are excited
The Development Team shared a plan to take an to come to work and see how what they are
incremental approach to get back on track with doing is making a difference at Penta.
automated testing with the stakeholders. During
Before the change, 38% of the Development
the next Sprint Review, after the holidays, trust
Team felt empowered to make decisions,
was eroded, but the Development Team took
just three months after the change, 98% of
ownership of the mistake and came up with a
people said that they felt empowered to make
plan to mitigate the gap that was left. It took a
decisions. Teams are consistently creating
while to gain the stakeholders’ trust back, but
“Done” potentially releasable Increments
the key was delivering done working software
every Sprint. Transparency on where the
every Sprint and increasing transparency.
products are going and where the products
currently are has never been higher.
Bubolz’s Perspective: Sprint Reviews have become events where
stakeholders from C-suite to developers on
“When this subject came up with
other products to adjacent departments
the leadership team, I was pleasantly
sync on the progress made and adapt their
surprised at how serious they took the
plan for the next two weeks. Transparency,
definition of “Done” and what it meant
to them. The leadership team didn’t see alignment, and delivery of working products
the definition of “Done” as something have been at the foundation of creating a
just for the Development Team. trusting atmosphere and new culture.

The Development Team didn’t understand No longer are functionality requests

why the leadership team was so upset at commanded down from the executive team or
first. What the leadership team thought mandated by an angry customer. The teams
was happening and what was happening are analyzing the request, looking for the root
were two different things. I tried to help business problem, and the whole Scrum Team
the Development Team take accountability is determining how to solve the problem for the
for that misalignment, but from the time customer. The teams are introducing analytics
when we talked about this to when the in their applications so they can validate their
conversation happened in the first Sprint hypothesized solutions to the challenge and
Review, the message was lost. This led validate that they are solving the root problem.
me to work on speaking more in terms of Using data to inform decision making is
business value with the Development Team

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 CASE STUDY | SCRUM
A Six-Month Cultural Transformation | The Penta Story

becoming more and more common, with a hope I realized that the first part of this
to make this a core competency in the future. change is about executing a lot of tasks,
creating a Product Backlog, getting
Today the budgeting process is being refactored teams established, visualizing the work
to be aligned around P&Ls by product line. in the Sprints, and creating a physical
Product Owners are empowered to be mini environment for collaboration to thrive.
CEOs of their products. The organization is
preparing to have a high level of financial The second part is all about people
transparency aligned around products. and the complexity that comes with
the element of change. Most leaders
Teams now use empirical data to forecast
surrender at this stage and never realize
with Monte Carlo simulations when the new the full potential of self-organizing,
greenfield products will be ready to go to self-lead empowered teams.
market. Marketing, account management,
leadership, and the Scrum Teams are aligned 3. An agile journey is not only for the
around a shared vision to release what they teams building the products. This
believe to be game-changing products to change is for the whole organization,
the construction market. There are still many but it started first with my mindset and
conflicts and problems to overcome, but the the mindset of the leadership team.
transparency and frequent inspection and Because letting go of control and
adaptation cycles put in place have put a trusting others is not what got me and
my peers into a leadership position.
framework that allows the whole organization
to move away from an analysis mindset and
Through the process it often felt
into a feedback mindset based on empiricism.
counterintuitive, even unproductive,
to allow space for the problems and
the resolutions to come out of the
Henderson’s perspective: work. Our natural tendency to step in
There were three powerful things I learned and solve the problems for our people
that will forever change how I lead: robs the organization of learning and
adapting, which makes them very
1. I had a very well thought out plan fragile to change and worse overly
on how to roll out and execute the dependent on leadership.
changes that needed to happen in the
development organization. And after I needed to realize that my place was
meeting with Jeff (Bubolz), who had no longer solving problems but to
done it before, I needed to be able create and protect the environment
to abandon the plan and simply trust that allows others to thrive in solving
the process. problems. If l didn’t own up to the
Checking my ego and habits and behaviors that needed to
surrendering control was the change within, we would never reap the
best way to lead this change. real benefits of an Agile transformation.
2. Changing the way people work - the
first phase is hard, but it’s much easier
than changing the way people think.

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 CASE STUDY | SCRUM
A Six-Month Cultural Transformation | The Penta Story

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