The 3 Revolutions (Agile, Lean, Lean Startup)


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This is the (long overdue) translation of my opening keynote at the Italian Agile Day. I just presented it for IASA Ireland (International Association Software Architects).
The iphone/ipad app I mentioned (on Lean problem solving, 5 Whys, etc) went on sale on the Apple store on Mar 18. The A3 Thinker's Action Deck (physical cards) is going to be on sale shortly...and it is just awesome ;-)

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The 3 Revolutions (Agile, Lean, Lean Startup)

  1. 1. @agilesensei written, illustrated and performed by Claudio Perrone
  2. 2. How do you develop WINNING products?
  3. 3. a few years ago, this would have been my answer…
  4. 4. Waterfall focused on speed & efficiency through specialization
  5. 5. Despite all the best intentions, however, Bringing projects to “success” always required heroic efforts
  6. 6. … And the risk of failing to meet customer expectations was high “ Software and cathedrals are much the same – first we build them, then we pray. --- Samuel T. Redwine, Jr.
  7. 7. Luckily, in 2001, I met someone who OPENED MY EYES…
  8. 8. 1 Agile Software Development
  9. 9. “It was then that I discovered the true nature of the problem.”
  10. 10. “I started by applying XP technical practices”
  11. 11. “… Which I later integrated with scrum”
  12. 12. “My teams and I fully embraced Agile development to grow a world-class software organization”
  13. 13. We syncronized our work daily To DO Doing Done Burndown Work Left Family 1 Days Unplanned Next
  14. 14. We systematically reviewed our process Good Bad Next Do Less Do more Start Doing Stop Doing Keep Doing
  15. 15. The revolution was represented by the “inspect & adapt” approach to development
  16. 16. Our culture was based on “empowerment” rather than “command & control”
  17. 17. We crafted opinionated software “The best software has a vision. The best software takes sides. … Decide what your vision is and run with it.” -- 37 signals
  18. 18. We won awards and respect…
  19. 19. We almost touched the sky…
  20. 20. Almost
  21. 21. “July 2009 was the wettest July on record in Ireland”
  22. 22. “I’ll remember it as the month MATTEO was born”
  23. 23. BUT it is also the month I had to let go of a dream
  24. 24. WITHOUT A JOB
  25. 25. WITHOUT A purpose
  26. 26. WITH A GROWING Family to support…
  27. 27. … I did the only thing that was left for me to do…
  28. 28. I became a Lean & Agile consultant!
  29. 29. On my first mission, a cio asked me a question that haunts me to this day…
  30. 30. “If you were so smart, why did you fail?”
  31. 31. 2 Lean
  32. 32. The adoption of Agile practices at enterprise level proved to be a mighty challenge
  33. 33. Scrum works Except when it doesn’t
  34. 34. “to succeed…” …you'll need to design processes that improve the product development flow…
  35. 35. … Optimize the whole, rather than just focus on unit costs…
  36. 36. … and develop a culture of continuous improvement
  37. 37.
  38. 38. Awesome. Do it!
  39. 39. er…Alternatively, you can buy a bunch of cool cloud-based enterprise 2.0 solutions and/or send your people to a “certified scrum gladiator”tm course.
  40. 40. Teams gained the support of Entreprise transition communities, communities of practice and improvement workgroups Improvement backlog Enterprise Transition Community (ETC) Process Definition Workgroup .. Continuous Integration Workgroup .. Architecture CoP .. Scrum CoP … Automated testing CoP … etc
  41. 41. Customers Lean destroyed the myth that splitting work Kaizen Current State Value-Stream Map in big batches improves the economies xx to yy (high season) Period calculated: from of Acme Reinsurance Push arrow F: 200/month scale. Date: xxx inbox Author: Claudio Perrone Average: 10/day Pull arrow Proc. Lead Time: 71.75h Non VAT 3d Value Adding Time (VAT) 0.25h 2d 2.5d 5h 2h 1h 1h Calculate premium 2h Submit quote Proc. Efficiency 12.9% Train on Kanban pulling Reinsurance placement Request for reinsurance Register 20jobs Clean & analyze data FIFO Reduce batch sizes 10jobs $ value Calculate risk 2jobs due date Clarify classes of service C/T too long Setup Kanban board 5jobs Improve system validation Total Cycle Time: 9.25h
  42. 42. … And provided many “tools” to obliterate Customers the competition Future State Value-Stream Map Period calculated: from xx to yy (high season) Acme Reinsurance Date: xxx F: 200/month Pull arrow Author: Claudio Perrone Average: 10/day Proc. Lead Time: 46.25h Non VAT 2d Value Adding Time (VAT) 0.25h 1d 1.5d 4h 2h 1h 2h 1h Calculate premium Submit quote Proc. Efficiency 17.8% Train on Kanban pulling Reinsurance placement Request for reinsurance Register MAX 5 jobs Reduce batch sizes Clean & analyze data MAX 4 jobs Calculate risk MAX 2jobs Clarify classes of service C/T too long Setup Kanban board MAX 2jobs Improve system validation Total Cycle Time: 8.25h
  43. 43. I Integrated the kanban method to enable an evolutionary approach to change
  44. 44. KANBAN enabled the introduction of agility in otherwise unsuitable contexts Development Ordered Backlog 3 6 Rq. Fixed DOD DOR Expedite 1 PreTesting CD Ready Smoke Test PreTested Done DOD Integration Done Integration Team (Complex configuration) DOD
  45. 45. But it was only the beginning
  46. 46. A war was tragically consuming behind corporate walls
  47. 47. Firefighting, arbritrary targets and autocratic leadership were undermining the opportunity for a real transformation
  48. 48. The traditional agile approach towards management wasn’t going to be effective … You are a “chicken”. You shouldn’t even talk
  49. 49. Does this look familiar?
  50. 50. Do you remember how the story ends?
  51. 51. W. Edwards deming believed that… “ 95% of variation in worker’s performance is governed by the systems ---W. Edwards Deming
  52. 52. Perhaps… “ We should work on our processes, not the outcome of our processes. ---W. Edwards Deming
  53. 53. And I would add… “ Let’s design systems as if tomorrow we were more stupid than today. --- Claudio Perrone
  54. 54. “At Toyota, improving and managing are one and the same” Traditional thinking: Normal daily management + improvement Toyota’s thinking: Normal daily management = Process improvement
  55. 55. “you manage things, you lead people” “ There are three kinds of leaders. Those who tell you what to do. Those who allow you to do what you want. And lean leaders who come down to the work and help you figure it out. --- John Shook, Chairman & CEO, Lean Enterprise Institute
  56. 56. During my work with “a3 thinking”, a Toyota management process to systematically solve problems, improve and mentor…
  57. 57. I discovered that a3 thinking = Lean thinking, a vivid expression of the scientific method!
  58. 58. “The Lean revolution gave a purpose and method to management” “ I want you to use your own heads. And I want you actively to train your people on how to think for themselves. --- Eiji Toyoda
  59. 59. “Hence, I offer you my own definition” “ Lean is a business strategy to make money* THROUGH the development of people (*) replace with “create customer value” or “achieve results”, if you prefer
  60. 60. Using Lean and agile, I brought operational excellence to many clients, from large enterprises to fast-growing companies around Europe
  61. 61. But that old question still remained unanswered…
  62. 62. … Until one day
  63. 63. 3 Lean Startup
  64. 64. I entered a new world
  65. 65. ... A world that recognized the extraordinary challenges I once faced “ A startup is a human institution designed to create new products and services under conditions of extreme uncertainty. --- Eric Ries
  66. 66. It gave me a path to create a sustainable business around products that customers want data, feedback, insights Customer development PROBLEM/ SOLUTION FIT Customer discovery PRODUCT/ MARKET FIT Customer validation stop stop SCALE Customer creation stop Company building Lean & Agile development Pivot hypothesis, experiments, insights Problem: Unknown solution: Unknown
  67. 67. ... A path characterized by frequent scientific experiments… Learn Build (establish an hypothesis) (Build an experiment to test that hypothesis) Measure (Determine a quantitative or qualitative method to evaluate that hypothesis.)
  68. 68. … To accelerate the rate of learning… Learn idea (whether to pivot or persevere) Build (Turn ideas into product) (often a series of MVPs) data Product Measure (How customers respond)
  69. 69. … And measure real progress towards success Acquisition Activation retention revenue referral How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do user tell others? ( see Dave McClure “Pirate” metrics) Cohort analysis
  70. 70. “ It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages --- Henry Ford
  71. 71. Today
  72. 72. I document my business model(s) explicitly Top 3 Problems Existing alternatives Solution Key metrics Cost structure Unique Value Proposition Unfair Advantage Channels Revenue streams Customer Segments Early adopters
  73. 73. my vision is built on opinions untested assumptions
  74. 74. … which I systematically validate with experiments…
  75. 75. … that force me to “get out of the building”
  77. 77. specifically... I execute tasks To develop features That are part of experiments That I run to validate hypotheses That I formulate thanks to observations about the world that surrounds us.
  78. 78. I Use A3 thinking to systematically focus on the “one metric that matters” in the current stage of my business Target Increase conversion rate from 8% to 10% by Mar 31st 2013
  79. 79. I validate my solutions, OFTEN with low fidelity MVPs
  80. 80. … and Activate enthusiastic earlyvangelists with a glimpse of a future that will come
  81. 81. … until, of course, my next pivot  
  82. 82. What will Your future look like?
  83. 83. Final Thoughts
  84. 84. “ Don’t dream of success. Create the conditions to inevitably converge to it. --- Me (1967 - )
  85. 85. “ Talk does not cook rice   --- Chinese proverb
  86. 86. Thank You! Claudio  Perrone  
  87. 87. P.S.: The future is here.
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