short link: http://goo.gl/T8nCAG
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Motivation: It is important to avoid a continued project investment if it is unlikely to deliver sufficient value.
Structure: A transparent project will support inspection and adaptation. The Product Owner and the Development Team must be able to inspect and adapt the process. At the conclusion of each iteration, a potentially releasable increment must be delivered by the team to the Product Owner (PO). This increment will then be reviewed, , the development process considered in retrospect and improved, and future work planned. If the PO is not satisfied that sufficient value is likely to be delivered then he or she may terminate the project.
Applicability: Controlled Failure should always be an option on an agile project. It may be used when an inspect and adapt opportunity indicates further work will not prove valuable.
Consequences: When a controlled failure is done well, the losses incurred by a failing project should not exceed those resources consumed in the current iteration. However, any failure - controlled or otherwise - may have political repercussions.
Implementation: All projects should be evaluated by the Product Owner with regard to whether or not the intended value is still likely to be delivered. Reviews, Retrospectives, and Planning sessions all represent suitable points at which a controlled failure may be initiated. It is irregular to implement a Controlled Failure before the current iteration has terminated and an increment is available for evaluation. The implementation of controlled failure requires courage. It can be tempting to continue with an unprofitable venture when resources have already been invested in it (see Death March). A controlled failure should secure the release of any value accrued to date, including as much as possible from the final iteration, identify and harness the lessons that must be learned, and free project resources for other more profitable activities.