Gresham's Law

"Bad money drives out good."

Gresham's Law, originally from economics, states that "bad money drives out good money" when both circulate together. In an agile context, this principle can be applied to team dynamics, communication, and practices—where ineffective behaviors, poor processes, or low-quality work can overshadow and replace high-quality, value-driven practices. If left unchecked, this can degrade team performance and morale.

Impact of Gresham's Law on Agile Teams

When poor Agile practices take root, they can undermine good practices, leading to:

• Lower quality deliverables:
  • Quick fixes and shortcuts replace craftsmanship.
• Poor communication:
  • Bureaucratic or ineffective communication stifles collaboration.
• Diminished agility:
  • Over-reliance on rigid frameworks over true adaptability.
• Loss of trust and motivation:
• High performers may disengage when poor practices dominate.

Scenario

A high-performing agile team initially focuses on delivering high-quality code with robust test coverage and strong collaboration. However, due to tight deadlines, management pushes for speed over quality, leading to:

• Shortcuts in coding and testing.
• More meetings and documentation replacing face-to-face collaboration.
• Increased technical debt.
• A shift in team behavior where fast, lower-quality work becomes the norm. Eventually, skilled developers either leave or conform to these lower standards, reducing the team's overall effectiveness.

Ways to Mitigate the Effects of Gresham's Law:

1. Reinforce Agile Principles:
   • Ensure the team remains committed to quality, collaboration, and customer value.
2. Guard Against Short-Term Thinking:
   • Avoid sacrificing sustainable development for immediate gains.
3. Promote Psychological Safety:
   • Encourage open discussions to challenge poor practices.
4. Foster a Strong Agile Culture:
   • Align leadership and team members to uphold Agile values.
5. Use Empirical Data for Decisions:
   • Make data-driven choices to highlight the benefits of quality work.
6. Encourage Continuous Improvement:
   • Regularly inspect and adapt processes to eliminate bad habits.

Conclusion:

Gresham's Law serves as a warning for Agile teams: if poor practices go unchecked, they can overshadow and ultimately replace good practices. By fostering a strong Agile culture, prioritizing quality, and ensuring alignment between leadership and teams, organizations can maintain high-performance agility.

Key Takeaways

• Poor Agile practices can erode team effectiveness if left unchallenged.
• Culture and leadership play a crucial role in reinforcing quality-driven behavior.
• Proactive mitigation includes reinforcing Agile values, fostering open communication, and ensuring decisions are backed by empirical data

Summary

Gresham's Law in Agile teams highlights the risk of allowing bad practices to overtake good ones. By recognizing its effects early and actively maintaining a culture of excellence, Agile teams can sustain high performance and avoid the pitfalls of mediocrity.