Eastern Redcedar in crossection, with white sapwood on the outside edges, and red to deep reddish-brown heartwood. To reach sunlight in a forest canopy, trees must build trunk and branch structure that can support their topmost leaves and branches. The inner portion of the tree trunk, called heartwood, fulfills this structural function. Because of occasional storms, the structure that's in place at any given time must be stronger than is required for day-to-day operations. In other words, the tree must invest in support structure at levels beyond what are required at the time it makes the investment. They accomplish this by an iterative process. Each year, the outermost layer of cells of the trunk produce wood and bark. The most recently formed wood layers, the sapwood, conduct nutrients. As the tree ages, new layers of sapwood form, and the older layers die and become heartwood. Thus, the tree generates heartwood as a direct consequence of growth. This ensures that it will have the structural integrity it needs to support itself.
In organizations, retrospectives provide the new knowledge needed to ensure a sound foundation for growth. But unlike the heartwood of trees, organizations can conduct day-to-day affairs without simultaneously generating that foundational knowledge. In other words, the knowledge needed for growth is not produced as an intrinsic result of day-to-day operations. It is produced as an extrinsic activity, rather than an intrinsic activity. And that's why it receives inadequate investment. To ensure adequate investment in retrospectives, they must be transformed into an activity that is an intrinsic part of daily operations. Photo courtesy United States Department of Agriculture.
Most people believe that to learn how to do things better, we have to look at how we do them now. That's the fundamental idea of project retrospectives. But there are three problems. First, we don't always conduct retrospectives. Second, when we do, we don't always do a good job. Finally, we don't consistently use what we discover when we do conduct retrospectives. We can reach a better understanding of the causes of these three problems by examining this question: who pays for retrospectives?
Typically, projects pay for their own retrospectives — or more specifically, the sponsors do. But the interest of sponsors in retrospectives is often lukewarm at best. Many sponsors feel that retrospectives add little to the deliverables they're paying for, and which have already been delivered. They do add to future deliverables of other projects, and sponsors might benefit from that someday — or they might not.
The organization as a whole is the real beneficiary of retrospectives, especially when the issues uncovered are systemic. But typically, organizations don't consciously fund retrospectives — the Chart of Accounts has no line item for them. Since organizations don't pay for retrospectives explicitly, they don't value them. I call this the Retrospective Funding Problem.
But the Retrospective Funding Problem has a deeper cause. The drive for conducting retrospectives usually comes from project teams. Since the organization isn't the driver of retrospectives, the organization is at best ambivalent about them: "You can hold a retrospective, if you want, but we won't pay extra for it. And no travel."
For virtual teams, the problem is even worse. When all elements of the virtual team are under the same financial ownership, there is at least some chance that we can apply to virtual teams any solution to the Retrospective Funding Problem for co-located teams. But even for virtual teams under one owner, divisions and other organizational structures insert a separation of financial accountability that creates obstacles for financial support.
For virtual The organization as a whole is the
real beneficiary of retrospectives,
especially when the issues
uncovered are systemicteams of mixed financial ownership, we have an additional problem: confidentiality. What can actually be disclosed in the retrospective? If an issue arises from the processes of one participating enterprise partner, can team members who hail from that partner talk about it? This tangle reduces the ability to learn, limiting performance in future partnerships between the participating enterprises.
Addressing these problems is difficult, because the retrospective expenditure happens now, and the benefit arrives in future years — three to five years from now. Because the benefit delay coincides with the tenure of most managers, the benefits of retrospectives don't arrive during the tenures of the decision makers who support them.
Until the enterprise pays for retrospectives and truly understands their value, we'll probably just muddle along. 
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