Deliver Value: Lean Kanban
for Portfolio Prioritization
Ram Srinivasan
Lean - Agile Coach and Trainer
http://linkedin.com/...
I Help Clients with Product Discovery, Product
Management, Portfolio Alignment, Process
Consulting, and Organizational Coa...
What is Portfolio Planning?
Image Source:http://www.innolution.com/resources/visual-agilexicon
Challenges in Portfolio Management
● Firefighting - reactive execution
● Unstable, unclear, incomplete requirements
● Insu...
System Thinking Perspective
Insufficient
Planning
Improper metrics, metric
systems and KPIs
Insufficient Alignment
and Coo...
Dave Snowden's Cynefin Framework
Disorder
Project Type Characteristics Leader’s Job
Chaotic
High Turbulence
No clear cause and effect
Unknowables
Many decisions and...
Deliver Value: Understand Principles
Give a man a fish and you feed him for a day.
Teach a man to fish and you feed him fo...
Origin of Lean Thinking - TPS
Lean Thinking - Principles
● Optimize the Whole
● Focus on Customer
● Energize Workers
● Eliminate Waste
● Learn First, De...
Kanban Method
● Visualize Work
● Limit Work in Progress
● Measure and Manage Flow
● Make Process Policies
Explicit
● Imple...
Optimize the Whole - Value Stream Maps
References: http://leadinganswers.typepad.com/leading_answers/2011/09/pmi-acp-value...
Three Projects, Three Experiments !!!
Project 1: 1, 2, 3, …. 30
Project 2: a, b, c, d, ….Z
Project 3: 2, 4, 6, ….54
Question to Ponder Over...
If the cost of execution per unit time (day,
week) is the same, what would stakeholders
prefer?...
Lean Thinking - Wastes
● Overproduction of Information
● Waiting
● Unnecessary Movement of Information
● Over-Processing o...
Portfolio Planning Strategy
Image Source: http://www.innolution.com/resources/visual-agilexicon
How Should We Compare Variables?
Focus on Lifecycle Profits
Cost of Delay Profiles
WSJF based on CoD and Duration
Project Duration Cost of Delay(CoD) Weight = CoD/Duration
1 1 10 10
2 3 3 1
3 10 1 0.1
Accuracy vs. Precision
Estimate with Relative Sizes
100%
50%
0%
Effort
ReturnsonEffortInvested
XS S M L XL XXL
Portfolio Planning Strategy
Image Source: http://www.innolution.com/resources/visual-agilexicon
Economic Filters
Image Source: http://www.innolution.com/resources/visual-agilexicon
Manage Project Arrival and Departure Rates
Class of Service- Policies & Capacity
Analysis Planned In Progress Deployed
Expedite Standard Fixed Date
Embracing Emergent Opportunities
Smaller Projects, Frequent Releases
Smaller Projects, Frequent Releases
Portfolio Planning Strategy
Image Source: http://www.innolution.com/resources/visual-agilexicon
Limit WIP - Focus on Throughput
(Not Utilization)
Cycle Time as a Function of
Utilization and Batch Size
Trashing
{
{
High Performing Teams
Reference: Lean Software Develop...
Complete Engaged Teams With
Multi-Skilled Team Members
Maximize flow & Value Delivery - Long Lived Empowered Cross Functio...
Portfolio Planning Strategy
Image Source: http://www.innolution.com/resources/visual-agilexicon
Profit vs. Marginal Profit
Reference: The Principles of Product Development Flow by Donald Reinertsen
Marginal Economics - Other Concepts
● Throughput Accounting
■ Increase Throughput, Reduce Inventory, Reduce
Operating Expe...
Portfolio Planning Strategy
Image Source:http://www.innolution.com/resources/visual-agilexicon
References
email@ramvasan.com
http://ramvasan.com
http://linkedin.com/in/ramvasan
@ramvasan
This work is licensed under a Creative
Co...
Deliver Value:Lean-Kanban for Portfolio Prioritization
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Deliver Value:Lean-Kanban for Portfolio Prioritization

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My talk at PMI Westchester PDD (http://www.pmiwestchester.org/chapter_event_details.asp#299) and at PMI NYC Symposium (http://pminyc.org/sites/default/files/Symposium2013-brochure-FINAL.pdf)

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Transcript of "Deliver Value:Lean-Kanban for Portfolio Prioritization"

  1. 1. Deliver Value: Lean Kanban for Portfolio Prioritization Ram Srinivasan Lean - Agile Coach and Trainer http://linkedin.com/in/ramvasan @ramvasan
  2. 2. I Help Clients with Product Discovery, Product Management, Portfolio Alignment, Process Consulting, and Organizational Coaching
  3. 3. What is Portfolio Planning? Image Source:http://www.innolution.com/resources/visual-agilexicon
  4. 4. Challenges in Portfolio Management ● Firefighting - reactive execution ● Unstable, unclear, incomplete requirements ● Insufficient alignment and coordination of extended enterprise ● Processes are locally optimized and not integrated for the entire enterprise ● Unclear roles, responsibilities and accountability ● Mismanagement team competency and knowledge ● Insufficient planning ● Improper metrics, metric systems and KPIs ● Lack of proactive risk management ● Poor acquisition and contracting practices
  5. 5. System Thinking Perspective Insufficient Planning Improper metrics, metric systems and KPIs Insufficient Alignment and Coordination of the Enterprise Mismanagement of Competency and knowledge Unclear Roles, Responsibilities and Accountability Poor Acquisition and Contracting Practices Unstable, Unclear and Incomplete Requirements Lack of Proactive Risk Management Process Locally Optimized and Not Integrated Firefighting
  6. 6. Dave Snowden's Cynefin Framework Disorder
  7. 7. Project Type Characteristics Leader’s Job Chaotic High Turbulence No clear cause and effect Unknowables Many decisions and no time Immediate action to reestablish order Prioritize and select actionable work Look for what works than perfection Act, Sense, Respond Complex More unpredictability than predictability Emergent answers Many Competing Ideas Create bounded environment for action Increase interaction and communication Servant leadership Generate ideas Probe, Sense, Respond Complicated More predictability than unpredictability Fact based management Experts work out wrinkles Utilize experts to gain insights Utilize metrics to gain control Sense, Analyze, Respond Simple Repeating patterns, consistent events Clear cause and effect Well established knowns Fact based management Use best practices Extensive communication not necessary Establish patterns, optimize them Command and Control Source: “Leadership framework for Decision Making” - Snowden and Boone, HBR 2008 Managing Complexity - Leader’s Job
  8. 8. Deliver Value: Understand Principles Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.
  9. 9. Origin of Lean Thinking - TPS
  10. 10. Lean Thinking - Principles ● Optimize the Whole ● Focus on Customer ● Energize Workers ● Eliminate Waste ● Learn First, Decide Last ● Deliver Fast ● Build Quality In ● Keep Getting Better
  11. 11. Kanban Method ● Visualize Work ● Limit Work in Progress ● Measure and Manage Flow ● Make Process Policies Explicit ● Implement feedback loop ● Improve collaboratively, evolve experimentally
  12. 12. Optimize the Whole - Value Stream Maps References: http://leadinganswers.typepad.com/leading_answers/2011/09/pmi-acp-value-stream-mapping.html http://www.rmcproject.com/pmi-acp/pdfs/PMI-ACP%20Chapter%203.pdf
  13. 13. Three Projects, Three Experiments !!! Project 1: 1, 2, 3, …. 30 Project 2: a, b, c, d, ….Z Project 3: 2, 4, 6, ….54
  14. 14. Question to Ponder Over... If the cost of execution per unit time (day, week) is the same, what would stakeholders prefer? A. Shorter Cycle Time - 40% utilization, working one project at a time, projects delivered in a shorter time, one after another? B. Higher Utilization - 95% utilization, working on multiple projects at a time and projects taking longer to complete?
  15. 15. Lean Thinking - Wastes ● Overproduction of Information ● Waiting ● Unnecessary Movement of Information ● Over-Processing of Information ● Inventory of Information ● Unnecessary Movement of People ● Rework, Defects ● Loss of Tactical Knowledge/Skills
  16. 16. Portfolio Planning Strategy Image Source: http://www.innolution.com/resources/visual-agilexicon
  17. 17. How Should We Compare Variables?
  18. 18. Focus on Lifecycle Profits
  19. 19. Cost of Delay Profiles
  20. 20. WSJF based on CoD and Duration Project Duration Cost of Delay(CoD) Weight = CoD/Duration 1 1 10 10 2 3 3 1 3 10 1 0.1
  21. 21. Accuracy vs. Precision
  22. 22. Estimate with Relative Sizes 100% 50% 0% Effort ReturnsonEffortInvested XS S M L XL XXL
  23. 23. Portfolio Planning Strategy Image Source: http://www.innolution.com/resources/visual-agilexicon
  24. 24. Economic Filters Image Source: http://www.innolution.com/resources/visual-agilexicon
  25. 25. Manage Project Arrival and Departure Rates
  26. 26. Class of Service- Policies & Capacity Analysis Planned In Progress Deployed Expedite Standard Fixed Date
  27. 27. Embracing Emergent Opportunities
  28. 28. Smaller Projects, Frequent Releases
  29. 29. Smaller Projects, Frequent Releases
  30. 30. Portfolio Planning Strategy Image Source: http://www.innolution.com/resources/visual-agilexicon
  31. 31. Limit WIP - Focus on Throughput (Not Utilization)
  32. 32. Cycle Time as a Function of Utilization and Batch Size Trashing { { High Performing Teams Reference: Lean Software Development by Mary and Tom Poppendieck
  33. 33. Complete Engaged Teams With Multi-Skilled Team Members Maximize flow & Value Delivery - Long Lived Empowered Cross Functional Feature Teams
  34. 34. Portfolio Planning Strategy Image Source: http://www.innolution.com/resources/visual-agilexicon
  35. 35. Profit vs. Marginal Profit Reference: The Principles of Product Development Flow by Donald Reinertsen
  36. 36. Marginal Economics - Other Concepts ● Throughput Accounting ■ Increase Throughput, Reduce Inventory, Reduce Operating Expense Net Profit (NP) = Throughput – Operating Expense Return on Investment (ROI) = Net Profit / Investment TA Productivity = Throughput / Operating Expense Investment turns (IT) = Throughput / Investment ● Software Capitalization ● Beyond Budgeting ● Ignore Sunk Costs
  37. 37. Portfolio Planning Strategy Image Source:http://www.innolution.com/resources/visual-agilexicon
  38. 38. References
  39. 39. email@ramvasan.com http://ramvasan.com http://linkedin.com/in/ramvasan @ramvasan This work is licensed under a Creative Commons Attribution-NonCommercial- ShareAlike 3.0 Unported License.
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