I wasn't really being asked "Does Agile scale?" (By now, though, we know the answer: yes.) What I was really being asked was, "Does Agile work in large, dysfunctional organizations? Can I keep doing all of the ineffective things I'm required to do and still say I'm Agile? I can't have a co-located team--it's out of my control. I can't have active, involved product managers--they're too busy. I can't create cross-functional teams--it would disrupt our reporting hierarchy. How does Agile scale to my situation?"
It doesn't... at least, not well. Welcome to Mediocrity.
Long way of saying you can't get something for nothing.
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