Scrum was first defined as "a flexible, holistic product development strategy where a development team works as a unit to reach a common goal" as opposed to a "traditional, sequential approach" in 1986 by Hirotaka Takeuchi and Ikujiro Nonaka in the "New New Product Development Game".[2] Takeuchi and Nonaka later argued in "The Knowledge Creating Company"[3] that it is a form of "organizational knowledge creation, [...] especially good at bringing about innovation continuously, incrementally and spirally".

The authors described a new approach to commercial product development that would increase speed and flexibility, based on case studies from manufacturing firms in the automotive, photocopier and printer industries.[4] They called this the holistic or rugby approach, as the whole process is performed by one cross-functional team across multiple overlapping phases, where the team "tries to go the distance as a unit, passing the ball back and forth".