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How would you establish a highly motivated scrum team?

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I think one of the ways to motivate any team is to empower that team to have control over their own work where they own it and are self-governing. Help the PO to vision cast and empower the team.

The work has to be challenging and create an environment in the team in which they can master a particular skill set. Also, aligning the team with a higher purpose will motivate, so having the team aligned with other teams but remaining strongly decoupled with little hand-offs. Being part of a larger vision, engineering strategy will also motivate.

Give the team opportunities to grow – knowledge sharing sessions, lab-like work where they experiment with different ways of doing things including different technologies. Some key items to consider are

Acknowledgment and Recognition

Team Building Activities

Staying Positive During Setbacks

Ensuring Balanced Workload

Being Open to Criticism and Differing Opinions

Having Fun

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