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Value Driven Management - Building an Anti-fragile organization
- 1. Victoria Hall & Linda Luu VALUE DRIVEN MANAGEMENT Building an anti-fragile organization enabling business agility at scale
- 3. 3 • Principal at ThoughtWorks; CSM, CSP • Decades of industry experience as an executive and individual contributor • Lives in Santa Fe, NM loves the outdoors Linda Luu Victoria Hall • Principal at ThoughtWorks • Lean UX, Product & Portfolio Coach • Author of The Lean Product Guide • Lives in San Francisco, loves vegemite @LindaKLuu
- 4. 4 Only a fool would try to make a 5-year prediction in a world that is so random. Credit Suisse CEO, Tidjane Thiam
- 5. 5 Source: http://bestthenews.com/article/evoluti on-fintech-regulation-india-fri- 04292016-1254.html
- 6. NARROWING THE GAP 6 TechnologyChange Time Tech available to new disruptors Enterprise’s ability to absorb new tech evolution Gap in ability to explore and exploit opportunities Industry Models Technology Maturity Technology adoption use cases Business Process Business Model Evolution TechnologyChange Time Tech available to new disruptors Enterprise’s ability to absorb new tech evolution Gap in ability to explore and exploit opportunities
- 8. 8 VALUE DRIVEN MANAGEMENT Building a responsive enterprise through Portfolio Management
- 11. 11 *Circa 1952
- 12. 12
- 13. 13 DESIGN BUILD TEST SHOWCASES Agile Teams TEST Centralized QA RELEASE IT Operations WATER - SCRUM - FALL https://www.scrumalliance.org/community/articles/2015/june/water-scrum-fal INVEST PLAN Exec + Finance PMO
- 14. 14 “The last mile” INVEST PLAN Exec + Finance PMO
- 15. 15
- 16. 16 EXECUTIVE VISION & STRATEGY GOAL GOAL GOAL BET BET VISION $ ? MEASURING VALUE X THE RESPONSIVE ENTERPRISE
- 17. 17 6 PRINCIPLES OF VALUE MANAGEMENT • Outcome based strategy • Value prioritization • Lightweight planning & governance • An adaptive, learning culture • Autonomous teams • Cross-functional & collaborative decision making PRODUCT ARCHITECTURE & AGILE DELIVERY RELEASE BUILDLEARN RELEASE BUILDLEARN RELEASE BUILDLEARN CONTINUOUSDESIGN. CONTINUOUSDELIVERY PORTFOLIO MANAGEMENT EXECUTIVE VISION & STRATEGY GOAL GOAL GOAL BET BET VISION $ ? MEASURING VALUE X The Responsive Enterprise
- 18. 18 STORY & EXAMPLES Applications of Value Management
- 19. 19 STORY #1 Outcome based strategy
- 20. 20 ALIGNMENT?
- 21. 21 A tale of two trucks.
- 22. 22
- 23. 23
- 24. COMMUNICATING STRATEGY 24 Vision Goal Bet Initiative What will we become? How might we achieve this Vision? How might we understand more about a Goal? What actions are we taking to further learn about or deliver on this Bet? We will be the highest value wholesale distributor Grow presence for small business customers Expand self service options for pop-up restaurants Develop a handheld ordering solution
- 25. 25 Decide on funding levels for goals
- 26. OUTCOMES THAT MATTER 26 Patient health or lives saved over cost containment Expanding customer’s financial options over number of credit cards opened Profit per user over schedule gate met Market share acquired over number of leads generated
- 28. 28 GO!
- 30. 30
- 31. 31 YOU AND YOUR PMO
- 32. 32 STOP FOCUSING ON CONTROL
- 34. DO ONE THING AT A TIME 34
- 35. LEARN FASTER & STEER BETTER 35 Build, Measure, Learn Ideate, Measure, Learn
- 36. DECISION MAKING WILL CHANGE 36
- 37. 37 STORY #3 Delivering value: people, culture and people
- 38. 38 In the old days….
- 39. 39 Build a new retirement income product GOAL FROM Help customers transition to retirement TO
- 40. 40 VISIONING RESEARCH MVP DEFINITIONIDEATION EXPERIMENTATION FEEDBACK BUILD - MEASURE- LEARN PIVOT Change direction Double down Abandon x Our Ideation and Delivery Approach
- 41. 41
- 42. 42
- 43. 43
- 44. 44 Help customers transition to retirement GOAL FROM Support boomers through their retirement journey TO
- 45. 45 How might we measure the success of adopting a value driven approach?
- 46. 46
- 47. 47
- 48. 48
- 49. 49 6 PRINCIPLES OF VALUE MANAGEMENT • Outcome based strategy • Value based prioritization • Lightweight planning & governance • An adaptive, learning culture • Autonomous teams • Cross-functional & collaborative decision making PRODUCT ARCHITECTURE & AGILE DELIVERY RELEASE BUILDLEARN RELEASE BUILDLEARN RELEASE BUILDLEARN CONTINUOUSDESIGN. CONTINUOUSDELIVERY PORTFOLIO MANAGEMENT EXECUTIVE VISION & STRATEGY GOAL GOAL GOAL BET BET VISION $ ? MEASURING VALUE X The Responsive Enterprise
- 50. 50 VALUE DRIVEN MANAGEMENT What We’ve Learned Getting Started
- 51. 51 What we’ve learned. Executives must change (it’s not just about the people doing the work!) Right people, right roles Products, not projects Tech as enabler vs Tech at core
- 52. 52
- 53. 53 DECIDING WHERE TO START Think big, start small, move fast • Thin slice approach • Identify a reason to change • Build small, cross-functional teams • ‘Test and learn’ approach • Align work to value • Visualize existing investments - is everything aligned to high value goals?
- 54. 54 BUILDING A RESPONSIVE ENTERPRISE CULTURE APPROACH TO SOLUTIONS INVESTMENT RISK BUSINESS VIEW OF IT IDEA TO REALIZATION CYCLETIME Responsiveness over efficiency Weeks, not months or years Adaptive delivery, incremental learning over Pre-defined solutions, fixed plans. Empowered teams, owning outcomes over Command and control, order taking. Incremental, Intentionally balanced investment over Large, upfront investments, ‘wait and see’ approach Partnership, rapid delivery of value over Service provider, delivering features
- 55. 55 THE LEAN PRODUCT GUIDE A practitioner’s guide to building viable products customers love. Available on Leanpub Free download for a limited time: http://leanproductguide.com/
- 56. 4000 technologists with 34 offices in 14 countries
- 57. THANK YOU 57 For any questions, please contact - Linda Luu (linda.luu@thoughtworks.com) Victoria Hall (victoria.hall@thoughtworks.com)
Editor's Notes
- ##
- # Culture eats strategy for breakfast You are experienced change practitioners– you know this Have to change hearts and minds to enable true transformation
- # referred to a movement transitions from being commonly practiced by early adopters and visionaries to being a common way of being for the more moderate main stream. Agile in delivery has already jumped that chasm There can be a chasm between the business side of an organization and it’s technology side. They may be unaligned and working at cross purposes, they may be working on totally different outcomes, they may not even speak to each other or collaborate very frequently. By bringing Value Driven Management into an organization – we are forcing the business to think about delivering more customer value earlier – often much earlier than they are used to. We help bridge that chasm by principles of agility up the food chain to executives and other business partners – to affect strategy and decision making at every level of the organization. What we are beginning to see is enterprises more interested in being Agile totally. They recognize that there’s a great deal of goodness in Agile for everyone not just for technology or delivery.
- Herbert Benington Manufacturing and construction
- # Even though culture eats strategy for breakfast – still need one and preferably have one that is visible and understood by your organization. We start here because – this is where executives are most comfy and Certainly this is where you start to set priorities through allocation of $ Story - artifacts Some mechanics / explanation EASY
- # Here’s a common situation. We’re in a boat – your organization – and parts of the organization are pulling it in totallly different diretions.
- # Our client a large wholesale distributor – they delivered mostly food but also supplies like napkins and plates to restaurants. This is a tough business to make money in – price constrained since prices are well known in the industry it’s hard to differentiate on price. Company mostly focused on efficiencies – keeping costs low. They’d evolved a kick ass distribution organization - warehouses, planes, trucks, drivers – everything. But… over time what they noticed were... Smaller distributors starting to eat away their market share through being able to better meet their customers needs. They were closer to the customer and able to move faster with trying new things. In particular...
- # Better able to help these folks Small business that couldn’t wait for an interaction with a salesperson. More in tune with eCommerce and self service and this is where the smaller distribtors were able to excel and steal market share.
- # This was an acknowledged problem Business wanted me too offering Mktg – sales efficiency with existing offering Technology – totally disconnected and working on a sales tool upgrade and platform unification.
- # Most places have a strategy but few have developed them to the degree that they capture all the work they are doing We have an artifact called Lean Value Tree for sharing strategy – get to the specifics For this example – We helped them develop a focused strategy to explore the space they wanted to advance in – And it looked like this. Goal – 1st opportunity to set priorities and enable decision making through establish some constraints. --$$ funding -- MOS Talk more in a second. If you do this you – make it easy to talk about and share strategy at all levels and especially easy for anyone in your organization to see what they are working on and how it aligns to the overall Vision.
- # Branches give your organization clear alignment of ideas. Funding levels and Outcomes help to direct decision making at each level without overly constraining it. Goal funding breaks down to Bets and Bets to Initiatives,
- # The other decision that needs to be made is what outcomes is the org after. Get away from keeping score based on schedule or budget and focus on outcomes that indicate better if we are making progress in a market – fundamentally are we making our customer’s lives better – easier in some way. Outcomes that matter – decide on how you will measure progress. Again – these help guide decisions at each level and gives the teams at each level a way to see if there are going in the right direction. Want to focus on customer relevant outcomes –at the Goal level – things like cycle time to value realized and customer adoption of your solution. Once you have all of these - you end up with…
- # Putting it all on one page and sharing how you got there – creates the alignment that was previously lacking. By thinking through these things- you force a discipline on the organization that helps you to streamline and to focus on your end users and on making them better Deciding on funding levels and on how you will appropriately measure success – helps give cross functional teams good boundaries to own the work to unlock their own creativity in how to solve problems and move the enterprise forward.
- # As Reid Hoffman would say – ‘highly aligned and loosely coupled’ - delivery higher value and more value much sooner.
- # Evidence based decision making that executes more quickly – learn faster and better. This is how we operationalize the change in strategy.
- In order to do all of this – it takes time; there is no “magic’ – you must change many things culturally. This takes discipline… IF it’s hard to change one team to work in a new way – it’s exponentially harder to change the whole organization. One of the keys is to adapt what the PMO does and how it does it. -PMO Limiting WIP Governance
- # Start with you are your PMO Why start here – cross cutting for the entire enterprise and often sits between biz and product delivery Way to get outsize impact. Project management often called cat herding ; these cats are being herded … at all In the old days – in traditional organziations..
- # Cat herding might look like this Fundamentally the office tried to control what happened based on decisions and plans made far in advance of actual work/learning about whether or not those things were valuable. We are after..
- # Something more like this that unlocks the creativity of an org through a more facilitative role – more of a coaching role – Scrum master-y like VRO – why -controller / accountant to coach/ facilitator Shift to focus on value creation / delivery- Do this by – making everything visible (strategy, LVT, allocation, capacity, when folks are coming available to work on next highest idea Protect the process – governance and consistent use of MOS Foster “evidence based decision making” Trade off trying to predict what’s to happen to accuracy in deciding based on what has actually happened. The possibilities! Large telecom - reduced the number of project managers by ½ - much less accounting, control & tracking - measuring deviations from plan - to one that was about facilitating decision making; helped to ensure transparency of decisions, alignment to valuable outcomes, helping to make decisions obvious. Moved them from “Oracle” based management - HIPO - to management where decisions were clear based on the outcomes of past actions and the stated strategy Stop 20% of work at an entertainment services firm again since it didn’t align with work
- # Don’t let this be you Use the VRO to help align work and to make capacity visible – often we encounter people and teams tryinig to work on a dozen things at a time Resist the urge to start new work before you’ve finished work already in flight LIMITING WIP is a first order practice for VDM not just for teams but at all levels. Do not start work that doesn’t align simply because some executive thinks it might help Do collaborate with cross functional teams to try and figure out the highest priority ideas to try Do make capacity and usage visible Do protect the process Do not let this happen to you.
- # Governance – Introduce PVR Fundamentally – PDCA cycles - Act Measure/Review Choose Decide more frequently Levels Time frames What do you do, who’s involved, why important, focus on learning and results not beating each other Stop, Pivot, Go More Much easier to steer and we are risking far less financially since we are consistently making smaller investments and seeing whether or not those investments are paying off.
- # Summarize – Move from left where funding and features are decided upfront and then tracked – where we typically do try and spend all of our budget or take all of our scheduled time To making decisions based on feedback. Where we risk less over shorter periods of time and are constantly asking ourselves are we working on the most valuable thing. Financial services firm reduced planning cycles from 6 mos to 6 weeks much more collaborative, cohesive, and creative. away from adversarial business case justification of work which was largely fantasy to incremental collaborative decision making closer to the activity that was producing valuable outcomes. This is the promise Introduce cultural piece important story.
- Case study: Wealth Mgt Before value management and scaling agile initiatives were implemented, kicking off a new initiative felt like this..
- Unless you have a business case, idea, list of features disguised as a product roadmap and you know exactly how much it’s going to cost. This goes contrary to taking an ‘test and laern’ approach to validating an idea. As we implemented value mgt, this is what happened...
- WHAT WE thought from media etc http://www.businessnewsdaily.com/2698-americans-fear-retirement.html
- WHAT WE FOUND – BOOMERS DON’T THINK ABOUT RETIREMENT IN THE SAME WAY AS THE PREVIOUS GENERATION From have to, to want to I do everything I’ve always done, only slower http://www.aarp.org/work/retirement-planning/info-2014/boomer-retirement-little-savings-means-working.html
- Team met with leaders and shared insights
- Team met with leaders and shared insights
- Story #2 GOB’S STORY – Miiddle management blamed for everything, responsible for nothing http://www.geograph.org.uk/photo/3478403
- Simply put, VDPM is an operational framework that enables an organization to rapidly respond to market opportunities, maximize the value delivered from their investments and tie together the strategy and execution people of the organization. It is important for us to point out right up front, that when we say “investments”, we are not only talking about new product innovation, but also about all the investments made to deliver value to your customers. That means your Business as Usual (BAU) spend, including defect repair, operational efficiency changes, and technical debt management. VDPM is different than traditional approaches to portfolio management because it's focused on business outcomes that are aligned with the organization’s strategy and it unlocks the creative power of the organizations people. With VDPM, smaller investments are made and funded incremental. They are supported by a lightweight governance and planning process that facilitates periodic review of the desired business outcomes. This gives leaders the control to make investment changes when ROI isn’t turning out as expected, or to accelerate investments that are proving valuable much earlier than traditional portfolio management approaches.
- https://raoulhall.wordpress.com/2014/12/09/overwhelmed-ask-for-help/
- We are a group of passionate individuals and a software solutions leader with technology at our core. Over time we’ve grown to incorporate an experience design practice and organizational development capability to help our clients to build solutions loved by their customers, as well as helping to grow and exercise the organizational muscles that embed successful innovation.