© Reaktor 2013Achieve flow! Balancing capability withdemandSami LiljaAgile coach and TrainerFinland1Saturday, June 15, 13
© Reaktor 2013I dare you..Is your company “customer-centric” or “customer-oriented”?2Saturday, June 15, 13
© Reaktor 2013Today’s agenda• Understanding Capability• Flow• Understanding demand• Balancing demand with capability• Desi...
© Reaktor 2013Balancing Demand with Capability4Saturday, June 15, 13
© Reaktor 2013Improve capabilityMost management only focuses on this side!New processesNew toolsOrganization changeRemovin...
© Reaktor 2013Process Improvement?Do we need this process at all?What kind of thinking hascreated this process?6Saturday, ...
© Reaktor 2013SystemThinkingPerformance7Saturday, June 15, 13
© Reaktor 2013Organization change?!!!!!!Companies losemoneyinthis directionCompanies make money in this direction8Saturday...
© Reaktor 2013What if Demand > Capability?PrioritizationmeetingsWorking weekendsand overtimeWaiting for anotherteamMultita...
© Reaktor 2013Should we remove waste?Optimizing part of asystem will not improvethe whole system“Getting rid of what youdo...
© Reaktor 2013Most of so-called waste is aproduct of imbalance betweendemand and capabilityGetting rid of waste requiresge...
© Reaktor 2013Theory of variation• We should expect things to vary, they always do• Understanding variation will tell us w...
© Reaktor 2013Capability of an organizationSprintsReady&testedfeaturesTarget setting? Bonuses?13Saturday, June 15, 13
© Copyright Reaktor 2011 ConfidentialImprove capabilityMost management only focuses on this side!New processesNew toolsOrga...
© Reaktor 201315Saturday, June 15, 13
© Reaktor 2013Little’s Law and work-in-progress• Most organizations try to increase throughput by ...• ... demanding highe...
© Reaktor 2013Why WIP limits?• Limiting Work-in-Progress creates Pull• Without WIP limit, we do not know when totake (pull...
© Reaktor 2013Achieving flowPull creates visibility to thesystem and makes it work at itscurrent optimalLimiting Work-in-Pr...
© Copyright Reaktor 2011 ConfidentialImprove capabilityNew processesNew toolsOrganization changeRemoving wasteTargets and b...
© Copyright Reaktor 2011 Confidential1. Eliminatecauses offailuredemand2. ShapeDemand1Most significant improvement is on thi...
© Reaktor 2013Value demand and failure demandValue demandAdds value to our product orservice from customer point ofview.So...
© Reaktor 2013Sources of Failure Demand in SW Development• Poor quality of work• Bugs• Technical Debt (also Architecture D...
© Reaktor 2013Shaping Demand• In order to create value, we need tounderstand what is value• Customer demand tells us where...
© Reaktor 2013Spectrum of workIT OpsHelpdeskSoftwaremaintenanceMajorprojectsMostly FailuredemandLead timeChange requestsPr...
© Reaktor 2013Demand Analysis1. Define work item types. Forexample- Source- Destination- Workflow- Order of Magnitude in Siz...
© Reaktor 201326Saturday, June 15, 13
© Reaktor 2013Priority or Capacity allocation?ProductOwnerTeamProductOwnerTeam40%40%20%27Saturday, June 15, 13
© Reaktor 2013Project delivery or Classes of Service28Saturday, June 15, 13
© Reaktor 2013Demand, Value and FlowStudy and understand customerDemandUnderstand what is Valuefrom customer point of view...
© Reaktor 2013The foundational principles of KanbanStart with what you do nowAgree to pursue incremental,evolutionary chan...
© Reaktor 2013Measurements• Measure against the Purpose of the organization• From customer perspective• Look at variation ...
© Reaktor 2013Summary• The system operates at its optimal when demandand capability are balanced• Limiting work-in-progres...
© Reaktor 2013I dare you..Is your company “customer-oriented”Study and understandDemandMeasure againstPurposeLimit WIP in ...
© Reaktor 2013Controversial thoughtAll work management systems arewaste!Need for management system is asymptom of imbalanc...
© Copyright Reaktor 2011 ConfidentialThank youTwitter: @samililjaLinkedin: samililjaBlog: http://samililja.wordpress.com35S...
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Dare slilja-flow

  1. 1. © Reaktor 2013Achieve flow! Balancing capability withdemandSami LiljaAgile coach and TrainerFinland1Saturday, June 15, 13
  2. 2. © Reaktor 2013I dare you..Is your company “customer-centric” or “customer-oriented”?2Saturday, June 15, 13
  3. 3. © Reaktor 2013Today’s agenda• Understanding Capability• Flow• Understanding demand• Balancing demand with capability• Designing system to meet the demand• Controversial thought3Saturday, June 15, 13
  4. 4. © Reaktor 2013Balancing Demand with Capability4Saturday, June 15, 13
  5. 5. © Reaktor 2013Improve capabilityMost management only focuses on this side!New processesNew toolsOrganization changeRemoving wasteTargets and bonuses5Saturday, June 15, 13
  6. 6. © Reaktor 2013Process Improvement?Do we need this process at all?What kind of thinking hascreated this process?6Saturday, June 15, 13
  7. 7. © Reaktor 2013SystemThinkingPerformance7Saturday, June 15, 13
  8. 8. © Reaktor 2013Organization change?!!!!!!Companies losemoneyinthis directionCompanies make money in this direction8Saturday, June 15, 13
  9. 9. © Reaktor 2013What if Demand > Capability?PrioritizationmeetingsWorking weekendsand overtimeWaiting for anotherteamMultitasking or lotof work-in-progressFilling in statusreportsWASTE!Work that adds no value9Saturday, June 15, 13
  10. 10. © Reaktor 2013Should we remove waste?Optimizing part of asystem will not improvethe whole system“Getting rid of what youdon’t want does not give youwhat you do want”- Russell Ackoff10Saturday, June 15, 13
  11. 11. © Reaktor 2013Most of so-called waste is aproduct of imbalance betweendemand and capabilityGetting rid of waste requiresgetting rid of unevenness andoverburden11Saturday, June 15, 13
  12. 12. © Reaktor 2013Theory of variation• We should expect things to vary, they always do• Understanding variation will tell us what toexpect• Understanding variation leads to improvement• Causes of variation are always found in the system• Understanding variation tells when somethinghas happened.• Crucial for learning and performance improvement.Source: http://www.systemsthinking.co.uk/variation.asp12Saturday, June 15, 13
  13. 13. © Reaktor 2013Capability of an organizationSprintsReady&testedfeaturesTarget setting? Bonuses?13Saturday, June 15, 13
  14. 14. © Copyright Reaktor 2011 ConfidentialImprove capabilityMost management only focuses on this side!New processesNew toolsOrganization changeRemoving wasteTargets and bonuses14Saturday, June 15, 13
  15. 15. © Reaktor 201315Saturday, June 15, 13
  16. 16. © Reaktor 2013Little’s Law and work-in-progress• Most organizations try to increase throughput by ...• ... demanding higher velocity from teams• ... decreasing project duration by cutting corners or• ... imposing impossible deadlines• Limiting work-in-progress would give better resultsTime through system =Work-in-progressThroughputLittle’s Law16Saturday, June 15, 13
  17. 17. © Reaktor 2013Why WIP limits?• Limiting Work-in-Progress creates Pull• Without WIP limit, we do not know when totake (pull) new work• Why Pull system?• Creates visibility to system• Removes queues from the system• Helps organization work in optimal way17Saturday, June 15, 13
  18. 18. © Reaktor 2013Achieving flowPull creates visibility to thesystem and makes it work at itscurrent optimalLimiting Work-in-Progress (WIP) enables PullWIP-limits and Pull createFlow18Saturday, June 15, 13
  19. 19. © Copyright Reaktor 2011 ConfidentialImprove capabilityNew processesNew toolsOrganization changeRemoving wasteTargets and bonusesCreate FLOW19Saturday, June 15, 13
  20. 20. © Copyright Reaktor 2011 Confidential1. Eliminatecauses offailuredemand2. ShapeDemand1Most significant improvement is on this side!Improve capabilityCreate FLOW20Saturday, June 15, 13
  21. 21. © Reaktor 2013Value demand and failure demandValue demandAdds value to our product orservice from customer point ofview.Something customers are willing topay for.This type of demand we want.Failure demandFailure to do what customerneeds.Bad quality, delay, wrong product orservice. No product or service.Missing either what or how customerwants the service or product.Can account up to 80% of work21Saturday, June 15, 13
  22. 22. © Reaktor 2013Sources of Failure Demand in SW Development• Poor quality of work• Bugs• Technical Debt (also Architecture Debt, Learning Debt etc)• Features developed without thinking about User Experience• Requirements solely driven by HiPPO• Lack of end user involvement• Lack of understanding what matters to customer• Misunderstandings• DependenciesSource: http://www.thekua.com/atwork/2013/05/what-is-failure-demand-in-software-development/22Saturday, June 15, 13
  23. 23. © Reaktor 2013Shaping Demand• In order to create value, we need tounderstand what is value• Customer demand tells us where the value is• Only after we have the knowledge we canshape demand• I.e. choose what value we deliver23Saturday, June 15, 13
  24. 24. © Reaktor 2013Spectrum of workIT OpsHelpdeskSoftwaremaintenanceMajorprojectsMostly FailuredemandLead timeChange requestsProduct fixesThroughputMostlyValuedemandLearningPush/ReactivePull/ProactiveLittle scope toshape demandLarge scope toshape demandImprovecapabilityReduce failuredemandTreat demand aspool of options,improve optionconversion rateImprovecapability24Saturday, June 15, 13
  25. 25. © Reaktor 2013Demand Analysis1. Define work item types. Forexample- Source- Destination- Workflow- Order of Magnitude in Size2. For each work item type analyze- Demand- Arrival Rate (seasonalfluctuations?)- Nature of Demand (stochastic,burst, seasonal, batches, chaotic)- Customer Expectations (even ifunreasonable)3. Describe Sources of InternalDissatisfaction-Variability that randomizes theprocess- Prevents work being deliveredon-time, with good quality etc4. Describe Sources of CustomerDissatisfaction- Reasons customers areunhappy / expectations not met(or points of customer conflict)25Saturday, June 15, 13
  26. 26. © Reaktor 201326Saturday, June 15, 13
  27. 27. © Reaktor 2013Priority or Capacity allocation?ProductOwnerTeamProductOwnerTeam40%40%20%27Saturday, June 15, 13
  28. 28. © Reaktor 2013Project delivery or Classes of Service28Saturday, June 15, 13
  29. 29. © Reaktor 2013Demand, Value and FlowStudy and understand customerDemandUnderstand what is Valuefrom customer point of viewDesign Flow of work againstvalue demand29Saturday, June 15, 13
  30. 30. © Reaktor 2013The foundational principles of KanbanStart with what you do nowAgree to pursue incremental,evolutionary changeInitially, respect current roles,responsibilities & job titlesEncourage acts of leadership at all levelsStudy and understand customer demand30Saturday, June 15, 13
  31. 31. © Reaktor 2013Measurements• Measure against the Purpose of the organization• From customer perspective• Look at variation over time• Allows learning• Measure to understand and improve• Instead of arbitrary target, bonus or competition• Measurements are used (a) by those who do thework and (b) people who design and act on thesystemAre we achieving thePurpose of the system?31Saturday, June 15, 13
  32. 32. © Reaktor 2013Summary• The system operates at its optimal when demandand capability are balanced• Limiting work-in-progress creates a pull-system which helps to achieve flow• Flow improves predictability and throughput of thesystem• Studying and understanding Demand is the mostimportant activity when designing a system• Understanding Demand creates Purpose and makesmeasurement possible32Saturday, June 15, 13
  33. 33. © Reaktor 2013I dare you..Is your company “customer-oriented”Study and understandDemandMeasure againstPurposeLimit WIP in order toimprove lead timesHave Pull systemRemove root causes ofFailure DemandDesign work againstValue Demand33Saturday, June 15, 13
  34. 34. © Reaktor 2013Controversial thoughtAll work management systems arewaste!Need for management system is asymptom of imbalance betweendemand and capability.Understanding demand helpsto find the right system to managework, reach balance andachieve Flow!34Saturday, June 15, 13
  35. 35. © Copyright Reaktor 2011 ConfidentialThank youTwitter: @samililjaLinkedin: samililjaBlog: http://samililja.wordpress.com35Saturday, June 15, 13

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