Fibonacci & Beyond: Simplifying Agile Estimation for Scrum Teams
It was Fibonacci Day on Saturday 23rd November 2024, yes it is a thing!
For all the Scrum Teams out there grappling with how to estimate work, I’ve created this guide to demystify how relative estimation techniques, including the Fibonacci sequence, can help your team tackle ambiguity, improve accuracy, and align on effort estimations. You don’t have to be a maths genius to get to grips with these methods!
What is Fibonacci Day?
A Fibonacci sequence is a series of numbers where a number is the sum of the two numbers before it. November 23 is celebrated as Fibonacci Day because when the date is written in the mm/dd format (11/23), the digits in the date form a Fibonacci sequence: 1,1,2,3.
I’m going to break this guide down into the following:
Why we estimate work in agile
What's the difference between estimating in hours vs. story points (or ‘relative’ estimations
Steps to estimate story points
Relative estimation techniques including when and how to use:
T-shirt sizing
Fibonacci sequence
Planning poker
Why we estimate work in agile
Why we estimate -
Get a view on effort required to deliver a stated outcome
Take into account various constraints that cause inaccuracy
Provide cost to business stakeholders
Provide understanding of revenue and timeline for delivery
Value of an estimate -
Estimates are created based on a rough understanding of the effort involved. Factors to consider:
Level of understanding
Level of skills / experience
Risks
Ambiguity - Unless the exact same piece of work has been previously done, using the same technology, tools and people, then an estimate is likely to be less than precise. To deal with this ambiguity be clear what the estimate means, and how it has been reached.
Influences on accuracy -
Experience of team
Experience working with technology
Dependencies
Story points = Value
Team maturity
‘The “Cone of Uncertainty” describes the reduction of the uncertainty about scope after each iteration.’ Scrum.org
What's the difference between estimating in hours vs. story points (or ‘relative’ estimations)
“Relative estimation is one of the several distinct flavours of estimation used in Agile teams, and consists of estimating tasks or user stories, not separately and in absolute units of time, but by comparison or by grouping of items of equivalent difficulty.”
Estimating work - Pros and Cons of using Hours vs. Story Points
Steps to estimate story points
Steps to estimating using story points for agile / scrum teams
Relative estimation techniques - Managing ambiguity
T-shirt Sizing
Overview:
Work items are each estimated using standard t-shirt sizing – XS, S, M, L, XL, XXL
The sizes give an overview of the complexity or required effort depending on the team’s preference
Useful for:
Teams new to agile estimation
Early-stage planning estimations to get a ‘top-line’ estimate of work scales (Discovery / Sprint 0)
Large backlogs
How to use:
Determine your scale - how many hours / days / weeks does the team agree constitutes L vs. M vs. S
How much range of scale do you need? E.g. XXL, XL, L, M, S, XS
Make it fun, it can be a very creative exercise, and it really helps get a handle on big programmes of work and large backlogs early on
Example workshop - PO reads out an Epic and asks the team how much effort they think it will take. On a collaborative board everyone adds a post-it note detailing the ‘dog’ they think it equates to. Then they discuss collectively the responses and agree on one size.
Sizing with Dog Scale or Fruit Scale
Fibonacci Scale
Overview:
The Fibonacci scale is a series of exponentially increasing numbers used to estimate the effort
The standard Fibonacci sequence is 0, 1, 2, 3, 5, 8, 13, 21, 34, 55, and 89.
Useful for:
The exponential nature of the Fibonacci Scale makes it easy for the entire team to understand what the assigned numbers mean
By assigning story points higher numbers, it forces the team to realistically look at the complexity and effort required to complete the task, which can lead to more accurate estimates
Generally used as part of Planning Poker
How to use:
Each team member estimates a number of the Fibonacci scale that represents the task’s size
All team members disclose their number at the same time to avoid influencing each other
Team reviews the numbers until they reach consensus about each user story / task
Each user story is added to a bucket which represents a corresponding point in the Fibonacci sequence
Precision and breadth in estimates
Planning Poker
Overview:
A gamified techniques that agile teams use to guess the effort of tasks
To help gauge the number of story points for tasks teams use planning poker cards
Useful for:
Introduces a gamified way of estimating and creating consensus in a collaborative way
Great for newly formed teams
Done after creating the initial backlog
How to use:
Every team member gets an identical deck of cards
These cards can have:
Standard or modified Fibonacci sequence
T-shirt sizes
Both!
Read out User Story, everyone discusses:
How should we handle the work
How many people are expected to be involved
What skills will be needed to work on the story
How should we tackle any bottlenecks that might delay progress
Everyone privately selects a card from their deck that they feel represents the right number of story points
Everyone shows their card, when team members show the same card that creates consensus
Planning Poker Cards - Example
Conclusion
Agile estimation isn’t just about assigning numbers; it’s about fostering alignment, collaboration, and shared understanding within your team. Whether you’re using T-shirt sizing, the Fibonacci sequence, or Planning Poker, the goal is to strike a balance between precision and flexibility.
Remember, the value of estimation lies not in predicting the future with certainty but in empowering your team to navigate ambiguity with confidence. As you apply these techniques, you’ll find that estimating work becomes less of a chore and more of a powerful tool for achieving shared goals.
Let’s keep the conversation going - what’s your go-to estimation technique, and why does it work for your team? Share your thoughts in the comments below!
A Little Disclaimer:
My words are my own. Whilst Chat GPT and other AI tools are amazing resources to check my grammar, suggest better formatting and provide catchy headlines when the brain fog sets it, it cannot provide verifiable data without substantiation. It cannot replace experience or the passions and inspirations which fuel our professional lives. Any data and trends I have included have been substantiated via the sources I provide. The insights given in this article are based on my +21 years professional experience, my +6 years in senior leadership roles in The UAE and my own wide-ranging research. If this article has resonated with you please feel free to comment and share, feedback is always welcome and appreciated.