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LKIN18 : Enterprise and Business Maturity through Value-added Quantification with Kanban - Masa K. Maeda

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Session Overview :

Enterprises don't care about agility, they care about better business. Lean-Agile is a great way to improve business when the focus is on value generation and delivery, instead of focusing on methodological correctness only. This session is about understanding and applying behavioural economics, quantification and scientific method throughout the entire value chain and at all levels of the enterprise to mature the enterprise and the business.

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LKIN18 : Enterprise and Business Maturity through Value-added Quantification with Kanban - Masa K. Maeda

  1. 1. LeanKanban India 2018 LeanKanban India 2018 Enterprise and Business Maturity through Value-added Kanban Quantification Masa K. Maeda Valueinnova LLC USA
  2. 2. LeanKanban India 2018 Previously: Executive & Enterprise Lean-Agile Coach Steering Committee Steward & Coach Masa K. Maeda, PhD Founder & CEO USA Electric Communities R&DOne of the originators Coordinating Committee Founding team member Senior Consultant
  3. 3. LeanKanban India 2018 LeanKanban India 2018 ©Masa K. Maeda Photo by Jonas Zürcher on Unsplash
  4. 4. LeanKanban India 2018 ©Masa K. Maeda Photo by Charles Deluvio on Unsplash LeanKanban India 2018
  5. 5. LeanKanban India 2018 • December 20, 1951: The first power plant to produce electricity using atomic energy (Plutonium 239) • Testing at EBR-I confirmed that a reactor could create (or breed) more fuel than it consumes • This pioneering reactor operated for 12 years before being shut down for the last time in December 1963. Experimental Breeder Reactor 1 ©Masa K. Maeda
  6. 6. LeanKanban India 2018 Measurements are important ©Masa K. Maeda
  7. 7. LeanKanban India 2018 Kanban Maturity Model ML0 Oblivious ML1 Emerging ML2 Defined ML3 Managed ML4 Quantitatively Managed ML5 Optimizing ML6 Congruent Achievement Collaboration Transparency Flow Agreement Customer service Respect Understanding Purpose Balance Leadership Regulatory compliance Market focus Short-term investment Business focus Long-term investment Experimentation Business survivability Diversity Tolerance Individual Team Project /ServiceMultiple projects & Shared services Project/ProductPortfolio BusinessPortfolio More information: www.kanbanmaturitymodel.com 👉You don’t have to wait until being here to start measuring ©Masa K. Maeda
  8. 8. LeanKanban India 2018 ©Masa K. Maeda Photo by Charles Deluvio on Unsplash LeanKanban India 2018 What can we do with measurements such that the enterprise and the business mature?
  9. 9. LeanKanban India 2018 Traditional Economics It assumes that since people are logical and rational their economic decisions are done accordingly. ©Masa K. Maeda
  10. 10. LeanKanban India 2018 Behavioral Economics It acknowledges that people behave irrationally. Their economic decisions are influenced by emotional factors, cognitive bias and social situations. ©Masa K. Maeda
  11. 11. LeanKanban India 2018 ©Masa K. Maeda LeanKanban India 2018 How do we take irrationality into account to make better decisions such that the enterprise and the business mature? Photo: Young Frankenstein 1972
  12. 12. LeanKanban India 2018 LeanKanban India 2018 ©Masa K. Maeda Photo by Charles Deluvio on Unsplash LeanKanban India 2018
  13. 13. LeanKanban India 2018 Flow efficiency Measured as the actual work time against the total wait time Flow Efficiency in % = Work Time / ( Work Time + Wait Time) ©Masa K. Maeda
  14. 14. LeanKanban India 2018 New Manager (command & ctrl micromanager) starts managing people instead of the work product New team on new project w/lean-agile coach Team had 4 months of lean-agile experience Coach the Manager to think Lean and focus on flow 😃Team 😖Team 🙂Team Flow efficiency ©Masa K. Maeda
  15. 15. LeanKanban India 2018 😖Team 😖Management 😖Customers Flow efficiency ©Masa K. Maeda
  16. 16. LeanKanban India 2018 Identified pattern: ๏ Thursdays had higher % ๏ Fridays had the lowest % (second lowest was Mondays) ๏ WIP was okay enough Flow efficiency % ©Masa K. Maeda
  17. 17. LeanKanban India 2018 Cycle Time Work Time = (Time spent by a card in the ‘In-Progress’ column types) – (The time the card was blocked in these columns) Wait Time = (Time spent by a card in the ‘Ready’, and ‘Completed’ Column Type) – (The time the card was blocked in these columns) Blocked Time = Time the card was blocked in columns ©Masa K. Maeda Waits often result in queue increase or in task switching
  18. 18. LeanKanban India 2018 Cycle Time 😐Team 😀Customer ๏ Not much opportunity for improvement identified with respect to value-added work ๏ Focus was on wait-time reduction (some by tech, most by customer) ๏ WIP okay ๏ Upstream hadn’t changed resulting in blocked tasks👉 ©Masa K. Maeda
  19. 19. LeanKanban India 2018 Cycle Time ©Masa K. Maeda
  20. 20. LeanKanban India 2018 Cycle Time Spikes of work Some spikes are due to blockage 😐Customer 😖Customer 😖Customer ๏ WIP limit management (reduction, on this case) ๏ ~85% capacity utilization ๏ Team 🙂 ©Masa K. Maeda 😀Customer 😀Customer 😐Customer 😀Customer 😀Customer 😐Customer
  21. 21. LeanKanban India 2018 Value Stream Map Useful to bring early awareness on some opportunities for improvement ©Masa K. Maeda Non-value-added time Value-added time Value-added activity
  22. 22. LeanKanban India 2018 Waiting is a waste ©Masa K. Maeda
  23. 23. LeanKanban India 2018 Waiting for another ticket Waiting for another agile cell Waiting for external customer response Internal wait Waiting for DevOps Waiting for internal customer Waiting for Design Waiting for DBA Waiting for admin Not categorized Recommendation: start with the high-impact ones AND with the easier ones ©Masa K. Maeda Waiting is a waste
  24. 24. LeanKanban India 2018 ©Masa K. Maeda©Masa K. Maeda LeanKanban India 2018 Taking irrationality into account Photo: Young Frankenstein 1972 Yes, your irrational behavior is predictable… mostly
  25. 25. LeanKanban India 2018 ©Masa K. Maeda Ego Depletion
  26. 26. LeanKanban India 2018 ©Masa K. Maeda Ego Depletion The quality of your decisions change when you are cognitively busy, overloaded or tired
  27. 27. LeanKanban India 2018 ©Masa K. Maeda Cognitive ease Ego Depletion occurs when: Reduce Ego Depletion by: High WIP Limiting WIP Multitasking Working on no more than two tasks at a time Too much discussion Having high and clear visualizationSomeone tries to influence Long work hours Avoiding extra work hours Information bias Anchoring bias Ego Depletion Information bias: tendency to misinterpret information (observation bias) Anchoring bias: over reliant on the first piece of info available Cognitive Ease: the opposite state to Ego Depletion
  28. 28. LeanKanban India 2018 Making decisions later in the day or later in the week lead to poor decisions If you are a nigh person then your decisions are better during that time ©Masa K. Maeda Ego Depletion
  29. 29. LeanKanban India 2018 ©Masa K. Maeda Risk Aversion and Risk Seeking Gulongxia, China
  30. 30. LeanKanban India 2018 Which would you choose? ๏ Get $900 for sure ๏ 90% chance to get $1,000 ©Masa K. Maeda Example ©Daniel Khaneman Risk Aversion and Risk Seeking
  31. 31. LeanKanban India 2018 Which would you choose? ๏ Lose $900 for sure ๏ 90% chance to lose $1,000 ©Masa K. Maeda Example ©Daniel Khaneman Risk Aversion and Risk Seeking
  32. 32. LeanKanban India 2018 Did you choose? ๏ Get $900 for sure ๏ 90% chance to get $1,000 Did you choose? ๏ Lose $900 for sure ๏ 90% chance to lose $1,000 👉 👉 ©Masa K. Maeda Example ©Daniel Khaneman Risk Aversion and Risk Seeking People are more sensitive towards losing that towards gaining
  33. 33. LeanKanban India 2018 ©Masa K. Maeda Risk aversion/seeking behaviors Reduce risk aversion/seeking by: Poor prioritization Visualizing blockage Establishing explicit policies Identifying patterns of behavior over time Visualizing and tracking the entire value chain (establishing risk seeking measures) Favoritism Leaving things for later Doing easy tasks first and hard ones later Recency bias Ostrich effect bias - Recency: recent info is more valuable - Ostrich effect: ignore dangerous or negative info
  34. 34. LeanKanban India 2018 Bandwagon effect ©Masa K. Maeda A belief increases based on the # of people who hold that same belief.
  35. 35. LeanKanban India 2018 Bandwagon behaviors: Reduce bandwagon effect through: Word of mouth Classes of service Explicit policies Cadence-based feedback loops Metrics High collaboration frameworks Traditional meetings Traditional planning Traditional estimating ©Masa K. Maeda
  36. 36. LeanKanban India 2018 Limited options ©Masa K. Maeda People feel better about their choice when options are limited
  37. 37. LeanKanban India 2018 Too many options occur when: Limit options by: Poorly prioritized backlog Limiting WIP (upper & lower) Establishing explicit policies that limit options (where applicable) Applying the Kanban flight levels Applying the Kanban Maturity Model Allowing inflow to just happen Multitasking ©Masa K. Maeda
  38. 38. LeanKanban India 2018 Clustering illusion The tendency to see patterns where there aren’t. Be careful not to jump to conclusions. Deliver Deliver ©Masa K. Maeda Bottleneck? …most likely not. Bottleneck. Do something? …probably not.
  39. 39. LeanKanban India 2018 Clustering illusion causing behavior: Avoid clustering illusion by: Poor visualization Ensuring high visualization Lack of SLAs Making WIP limits visible Assumptions Making policies explicit ©Masa K. Maeda
  40. 40. LeanKanban India 2018 Kanban also helps reduce the incidence of: Confirmation Bias (not seeking contradictory information) Status Quo Bias (Avoid change) Negativity Bias (Emphasis on the negative) Unit Bias (thinking that one-size-fits-all) ©Masa K. Maeda
  41. 41. LeanKanban India 2018 Thank you! ©Masa K. Maeda LeanKanban India 2018

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