Simon Baker gave a presentation on improving business operations through lean principles such as continuous delivery, validating ideas with customers, and removing waste. He advocated organizing around products instead of silos, delivering in short iterations to get frequent customer feedback, and using measurements to continuously improve rather than chase targets. The goal is to sustain throughput and revenue while minimizing defects and waste.

1. Presented by
Simon Baker, Energized Work
28 October 2010
a tendency or partiality of a particular kind

2. © 2010 Energized Work - www.energizedwork.com 2
Simon Baker
Twitter: @energizr
Skype: simon.energizr
Email: simon@energizedwork.com
Blog: blog.energizedwork.com

3. Delight
customers
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Profit in business comes from
repeat customers, customers
that boast about your product,
and that bring friends with them.
– Deming
‘‘

4. Follow the money
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The goal of every company is
to make money.
– Goldratt
‘‘

5. Most products fail
because they don’t
have enough customers
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The greatest risks are delivering
the wrong thing, not validating
customers early and an
unproven business model.

6. Organizations
are over-organized
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Specialization and centralization
comes at the cost of complexity
in the form of unnecessary
dependencies that introduce
waste and bottlenecks.

7. Conventional product
development is like
betting on a hole-in-one
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Every idea and decision is an hypothesis
until it’s validated by paying customers.
It’s a big risk waiting for a big-bang
release to test the market exists and the
product fits, and to prove that sales can
be repeated.

8. Improve the odds of success
with continuous discovery,
validation and iteration
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Implant with rapid and responsive iterative
delivery capability into day-to-day business
operations to continually test business
assumptions and feature ideas with
customers using working software.

9. © 2010 Energized Work - www.energizedwork.com 9
Small continuous improvements
only go so far
Way of working
Effectiveness
A transformative change
can remove endemic
waste and provide a
better place to start from.
But it’s got to be
successful.

10. Organize around products
and collapse the value stream
to remove endemic waste
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No silos. No projects. Everyone
sits together, including business
people, and work full-time on
the product. Dependencies are
removed. Environments are
owned. It’s a small business
with autonomy to pursue its
goals.

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Seize a crisis or create one
Understand the system.
Set up quickly.
Do something that can’t be ignored.
Forget grand strategy for the moment.
Produce immediate results.
– Lean Thinking. Womack and Jones

12. © 2010 Energized Work - www.energizedwork.com 12
Run small experiments
as learning cycles
MAKE
LEARN
TEST
By applying Deming’s cycle repeatedly,
at different levels, to tackle uncertainty.
Product development becomes a
test-driven delivery system that tells us
we’re building the right thing and we’re
building the thing right.

13. © 2010 Energized Work - www.energizedwork.com 13
– John Seddon
Measures should reflect the true
purpose of the people doing the
work.
‘‘
Don’t chase targets.
Use measurements
to pursue improvement

14. © 2010 Energized Work - www.energizedwork.com 14
Fund the business plan
incrementally
CHARTER
INVEST
MEASURE
EXECUTE
Base funding on product
performance in the market.
Is it satisfying customers?
Is it profitable?
3 Months

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Success Criteria
Testable expectations in terms of
customer satisfaction, profit,
environmental performance and
other measures
Measurements updated as
progress is made
Current Situation
Background and context
Quantified data
Qualitative assessment
Previous measurements
Constraints
Budget
Why
Validated data from previous
experiments
Root-cause analysis
Assumptions
To be validated
Risks
Shared
Vision
Visualize the future in a charter

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Manage by cash flow
Visualize the cash position using cash basis
accounting in a simple profit-and-loss statement.

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To drive profit, increase revenue
and remove the causes of costs

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Inventory can’t generate revenue
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
23/10
30/10
06/11
13/11
20/11
27/11
04/12
11/12
18/12
24/12
08/01
15/01
22/01
29/01
05/02
12/02
19/02
26/02
04/03
11/03
18/03
25/03
01/04
08/04
15/04
22/04
29/04
06/05
13/05
20/05
27/05
03/06
10/06
17/06
24/06
01/07
08/07
15/07
22/07
29/07
05/08
12/08
19/08
26/08
02/09
£
Total Sleeping Money
Inventory Started WIP Ready to Start WIP Prepared WIP
Inventory costs money to make, costs even more money to
maintain the code, and the cost of delayed release is lost earnings.

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Sustain throughput
to satisfy value demand
0
20
40
60
80
100
120
23/10
30/10
06/11
13/11
20/11
27/11
04/12
11/12
18/12
25/12
01/01
08/01
15/01
22/01
29/01
05/02
12/02
19/02
26/02
04/03
11/03
18/03
25/03
01/04
08/04
15/04
22/04
29/04
06/05
13/05
20/05
27/05
03/06
10/06
17/06
24/06
01/07
08/07
15/07
22/07
29/07
05/08
12/08
19/08
26/08
02/09
Stories
Throughput [ Per Week ]
Release as often as customers will allow to get their feedback.

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Minimize failure demand
-25
-20
-15
-10
-5
0
5
10
Rework [ Per Week ]
Repaid Debt Fixed Defects Debt Defects
Fix defects immediately.
Manage debt carefully and continuously.

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INQUIRY
Design
Prototype
Learn
IMMERSION
OPTION
Hypothesis
MANAGE
Make
Test
Learn
DELIVERY
Validation
Customers, stakeholders, users
Business model
Discovery-driven delivery

25. © 2010 Energized Work - www.energizedwork.com 25

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Vertically slicing stories creates
opportunities for feedback
and collaboration
When sitting together face-
to-face time is easy and
cheap. Everything is driven
by conversations. Lot’s of
conversations.

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Small is beautiful.
Big is noisy
Scaling a small system won’t produce
bigger results. It becomes a different
system and won’t behave in the same
ways.
A big system loses purpose and becomes
too busy supporting itself.

28. © 2010 Energized Work - www.energizedwork.com 28
Thank you.
Twitter: @energizr
Skype: simon.energizr
Email: simon@energizedwork.com
Blog: blog.energizedwork.com

29. © 2010 Energized Work - www.energizedwork.com 29
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