Kanban: Thinking tools for portfolio-level problems

LSSC 2012Kanban:Thinking tools forportfolio-level problems Mike Burrows (@asplake) Por*olio Problems mike@djaa.com http://positiveincline.com Kanban for

Why “Portfolio-level problems”?n  Tes$ng the Kanban Method as a thinking tool n  Less about oﬀering solu$ons to copy n  More about framing & solving problems n  Idea & experience sharing Por*olio Problems n  Good & bad n  Contextual Kanban forn  Vision

Typical scenario§  Organisation §  Functional, hierarchical, not co-located, part outsourced§  Defined life cycle §  Well observed §  Specs, signoffs §  Cross-functional appetite for improvement, Por*olio Problems resourced§  Many fixed-date projects Kanban for §  Remaining durations of many months §  Very low confidence of date compliance

Kanban for Por*olio Problems Cole sees dead people

Cole sees dead people Por*olio Problems Kanban forI see enterprise-‐scale problems of overwhelming WIP, ins$tu$onalized at every level of the organisa$on

Characteris$cs of typical top-‐down solu$ons to porIolio level problems n  Narrow n  Compliance-‐driven n  Push Por*olio Problemsn  Disconnect between person & system Kanban for n  Disrespect

Scaling up has its issues too n  “We don’t know what each person is working on” n  So allocate them? n  “We’ve no$ced that people are too Por*olio Problems busy on too many things” n  So add some front end process? Kanban for

No maPer how narrow you make the funnel or how ﬁne you make the ﬁlter… Por*olio Problems Kanban for ...the pipeline will remain full

PorIolio level problems n  They’re very real n  From all sides, solu$ons that don’t help, miss the point or make things worse Por*olio Problems Kanban for

The 6 Kanban prac$ces – are they even relevant here? 1.Visualize2. Limit work-in-progress3. Manage flow4. Make process policies explicit Por*olio Problems5. Implement feedback loops6. Improve collaboratively (using models) Kanban for

1.Visualizen  Visualize work n  Projects1 n  Non-‐projects n  Demand & supply Por*olio Problemsn  Flow, delivery Kanban for1Disclaimers apply

2. Limit work-in-progressn  PorIolio constraints designed to generate ﬂow & provoke improvement n  Number n  Size ($, dura$on expected) n  WIP ($, elapsed incurred) Por*olio Problems n  Burn rate n  Delivery intensity / smoothness Kanban for n  Cost of Carry

At both extremes of scale, limi$ng by number is very eﬀec$ve n  # of developer-‐level work items n  # of ini$a$ves Por*olio Problems Kanban for

At intermediate scales, visualizing or limi$ng by number is less help n  Projects vary in size by orders of magnitude n  Volume Not everything is (or should be) a project Por*olio Problemsn  Kanban for

Some relevant $$ measures for single projects J F M A M J J A S O N D 1 2 3 4 5 6 7 8 9 10 11 12 Burn WIPn  Leverage what you Por*olio Problems have now J F M A M J J A S O N D Cost of Carry (cumulative)n  Derive or es$mate Kanban for before adding new tracking

Size: cost * dura$on n  You probably want to penalize both n  You might wish to trade them Cost Por*olio Problems Kanban for Duration

More ques$ons of cost * $me n  Where is the inventory that we should help out of the door? n  Which projects should we try hardest to split? n  Where has our posi$on worsened unexpectedly? n  What is my porIolio cycle $me? Por*olio Problems n  By IT or business stream? n  By class of service? Kanban forn  What is our inventory cos$ng to hold?

Cost of Carry n  Cost * rate integrated over $me n  Roughly propor$onal to cost * dura$on n  Apply a meaningful rate that reﬂects both ﬁnancing and delay costs n  >> your cost of funds Por*olio Problems n  > 25% p.a. (Reinertsen) n  > 2 * your hurdle rate (me) Kanban for n  Risk-‐adjusted?

Many of these measures can be aggregated, sliced & diced Limit this…to limit this J F M A M J J A S O N D Analyse Design Build Test Por*olio Problems Kanban for Limit to capacity

3. Manage flown  Visual management, DSS n  See inventory & its cost n  See ﬂow as inventory turnover n  See bright spots, rough spots what’s dragging, where to intervene n  Time dimension, backwards & forwards Por*olio Problemsn  A support, not a subs$tute for leadership n  An organiza$onal feedback mechanism, Kanban for “tension” for improvement n  Make the most of what you have now

@alhui nails it n  Provide just-‐in-‐$me informa$on to promote market liquidity and buyer decision-‐making #lssc12 n  Money is not our currency. Its not scarce enough. Time and eﬀort are our unit of currency #lssc12 Por*olio Problems Kanban for

My hope is that these… 1.Visualize 2. Limit work-in-progress 3. Manage flow…lead to these Por*olio Problems 4. Make process policies explicit 5. Implement feedback loops Kanban for 6. Improve collaboratively (using models)

But ﬁrst these… Leadership Agreement Respect Por*olio Problems Understanding Kanban for

Cole sees dead people Por*olio Problems Kanban forI see enterprise-‐scale problems of overwhelming WIP, ins$tu$onalized at every level of the organisa$on

To: kanbandev Subject: #ppm <subject> Your problems, thoughts, experience Por*olio Problems Kanban for

Thank you.Questions? Por*olio Problems Kanban for Mike Burrows (@asplake) mike@djaa.com http://positiveincline.com

Kanban: Thinking tools for portfolio-level problems

by Mike Burrows on May 17, 2012

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