SlideShare a Scribd company logo
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Learn to care about
what the customer
cares about
KPIs should shape
improvements to
service delivery
Enterprise Services
Planning
Defining Key Performance Indicators
Presenter
David J. Anderson
Swift Kanban
Webinar
29 April 2015
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Lean Kanban North America 2015
conference
• “Back to our roots”
• Implementing Kanban
• Looking to the future…
• Enterprise Services Planning
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
• 2 Days of Learning
Sessions
• Choose Your ½ Day
Workshops
• Risk Profiling – David J Anderson
• Cost of Delay – Don Reinertsen
• Project Management with Kanban
• Cynefin 101 for Portfolio Kanban
• Simple Probabilistic Forecasting
…and more!
• Becoming Data-Driven
• Objective Retrospectives
• Forecasting
• Enterprise Kanban & Lean Startup
• Scrumban
• Kanban Coaching
• Blockers for Improvement
• RBS Project Sizing
• Kanban Academic Research …
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Kanban experience reports
Ultimate
Software
• BazaarVoice
• web recommendations
app and mobile development
Including…
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Fitness for Purpose
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Which system is fitter?
We don’t know!
System B is faster but without understanding customer
expectations, both may be fit enough
0
2
4
6
8
10
12
14
Lead Time (Days)
System A
Frequency
0
5
10
15
20
25
30
5 10 15 20 25 30 More
Lead Time in Days
System B
Frequency
Mean 17 days Mean 12 days
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Measuring delivery against expectation
0
2
4
6
8
10
12
14
Lead Time (Days)
System A
Frequency
0
2
4
6
8
10
12
Lead Time Expectation Spread (Days)
System A
Frequency
0
5
10
15
20
25
30
5 10 15 20 25 30 More
Lead Time in Days
System B
Frequency
0
5
10
15
20
25
30
35
40
45
-15 -10 -5 0 5 10 15 20 More
Lead Time Expectation Spread (Days)
System B
Frequency
Mean 17 days Mean 12 days
System B is clearly fitter!
System B delivers 5/7 within expectations
System A only delivers 3/7 within expectations
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
What makes a pizza delivery service
“fit for purpose” ?
Fitness criteria are metrics that
measure things customers
value when selecting a service
again & again
 Delivery time
 Quality
 Predictability
 Safety (or conformance to
regulatory requirements)
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Meet Neeta - a project manager
Neeta’s team are working late
(again)
Neeta needs to feed them with
pizza
What attributes do her team
care about in a pizza delivery
service?
• Delivery time =
approximately 1 hour
• Non-functional quality =
tasty & hot
• Functional quality (order accuracy) =
doesn’t matter if small mistakes are
made, geeks will eat any flavor of pizza
• Predictability =
+/- 30 minutes is acceptable
• Safety =
so long as health & safety in food
preparation is good, it’s fine
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Neeta is also a working mom!
Neeta gets home late.
Her kids are really
hungry and even though
she shouldn’t she
decides to order pizza for
them
What makes a pizza
delivery service
acceptable to her kids
age 4, 6, 9 & 11 years?
• Delivery time =
20 minutes
• Non-functional quality =
doesn’t matter too much, it’s pizza!!!
• Functional quality (order accuracy) =
it must be cheese pizza! No other flavor is
acceptable! (even if you take the pepperoni
off)
• Predictability =
+/- 5 minutes maximum!!!
• Safety =
only mommy worries about that stuff!
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
To be “fit for purpose” there is a
product component & a service
delivery component
We need to offer a selection of
different recipes which are tasty
& popular. However, we must
also deliver with speed &
predictability
Lesson
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Modern creative & knowledge
worker businesses often obsess
with product definition & strategy
Operational excellence and service
delivery excellence are often
overlooked or treated as inferior
management skills
Lesson
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Neeta has 2 identities –
Mother and Project Manager
Each of Neeta’s identities
represents a different market
segment for the pizza delivery
service
Traditional demographic &
income group segmentation does
not accurately capture the
context to understand
“fit for purpose”
Nor, for that matter, do
personas. As Neeta represents
two segments not just one
persona
Lesson
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Exercise – Understanding Fitness for Purpose
Pick a service with which you are
familiar
Consider what makes it “fit for
purpose?”
Which attributes make you select
the service, again and again?
What are your expectations for
each attribute?
 Why?
 What (business) risks drive your
expectations?
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Fitness Criteria Drive
Evolutionary Change
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Fitness criteria are metrics that measure
observable external outcomes
Fitness criteria are metrics that
measure things customers or
other external stakeholders value
 Delivery time
 Quality
 Predictability
 Safety (conformance to regulatory
requirements)
or metrics that qualitatively
assess actual outcomes such as
 customer satisfaction
 employee satisfaction
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Evolutionary change has no defined end point
Evolving
Process
Roll
forward
Roll
back
Initial
Process
Future process is
emergent
Evaluate
Fitness
Evaluate
Fitness
Evaluate
Fitness
Evaluate
Fitness
Evalua
Fitnes
We don’t know the
end-point but we do
know our emergent
process is fitter!
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Business Risks, Fitness Criteria & Classes of
Service should all align
Business risks are things which are uncertain that affect
the performance of our business such as nature of
demand, consistency of supply, delivery predictability,
seasonal windows of opportunity, time value of money
Classes of service offered should align with business risks
Metrics used to evaluate service delivery capability
should be fitness criteria that are derived from specific
business risks
For example, opportunity cost of delay requires us to
measure lead time and understand sensitivity to
schedule uncertainty
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Select Key Performance Indicators Carefully!
KPIs should be fitness criteria metrics with threshold
values that represent “good enough” – the level where
the service delivery is “fit for purpose”
KPIs should assess service delivery capability and
indicate fitness for purpose. In doing so, a KPI
indicates your likelihood of success – of surviving and
thriving - by adequately satisfying your customers?
KPIs should be recognizable by your customers as
something meaningful!
If your customer doesn’t recognize the metric it isn’t a
“key” “performance” indicator, it is some other kind of
metric
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Other Useful Metrics
Some other metrics are useful
 Those which guide improvements
 Those which indicate general health
Is your metric evaluating and guiding a specific
change to improve fitness of your business such as
an initiative to improve vendor response times?
Or, is it a general business health indicator such as
liquidity?
If neither of these, then it is a metric that you almost
certainly don’t need! It should be removed!
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Defining Fitness Criteria
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Market Adoption Lifecycle Segmentation
Enthusiasts Early
Adopters
Early
Majority
Late
Majority
Laggards
Rate
Of
Market
Adoption
time
Moore’s
Chasm
Little
Chasm
Hip
Cool
Buggy
Community
development
Niche
Market
Features
Good func quality
Adequate non-func
quality
Permission
Giving
Early adopter
Exceptional
func and non-
func quality
Cost
Effective
Broad Features
Exceptional
func and non-
func quality
Low Cost
Easy Access
Forced adoption
Viewed as
taxation
Fit for purpose Fit for purposeChanges over time
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Customer Storytelling & Clustering
Tell stories about real
customers, their
motivation, what they
buy and why. Cluster
similar stories
Give each cluster a “nickname”
e.g.
• “All ins”
• “Aspirationals”
• “Bet hedgers”
• “Boy scouts”
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
You can’t just ask!
Neeta, how fast would
you like your pizza
delivered? How
predictable do you need
us to be with our delivery
estimate?
Customers will tend to tell
you they need better service
and more features than they
really need!
Would you pay more for
the things you say you
need and want?
No, probably not!
Believe what customers
actually do, do not believe
what they say they’ll do!
Actually behavior will vary
from declared intent!
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Who knows your customers?
Front line staff
 Those who take and those
who deliver orders
 Those who provide
“customer care”
 Often the lowest paid staff
in a business
 Often the highest turnover,
shortest tenured positions
 And yet, they have the vital
information that enables
the business to survive,
thrive and compete
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Pizza boy knows Neeta’s Story!
Staff who meet customers
can be trained to learn
what matters to them
and why
Create ways to capture
customer stories or directly
involve customer facing staff
when defining customer
segments fitness criteria
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
GT car manufacturer story
A well known manufacturer
of GT cars determined
customers were prepared to
wait 21 months to take
delivery
They learned this by letting
delivery time slip to 27 months
and receiving cancellations and
customers switching to a rival
manufacturer
Determining fitness
criteria thresholds by
reducing service levels until
customer complaints rise
to dangerous levels isn’t a
“safe to fail” approach!
Damaging your brand,
your reputation and your
profitability is a strange
way to discover how to
be…
“fit for purpose!”
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Retarding customer service until
customers complain vehemently or
take their business elsewhere could
be damaging
• Undermines brand
• Damages reputation
• Loss of market share
• Loss of revenue
Probing for threshold values by
reducing service quality isn’t “safe to
fail”
Is it “safe to fail”?
We need general guidance
that allows us to probe
for fitness criteria
threshold values that is
“safe to fail”
If we can’t ask, and we can’t
allow service to decline until
complaints make the
threshold evident, what can
we do?
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Probing for Threshold Levels
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Look for clusters or
patterns of demand, or
patterns of similar
expectations, or new
sources of demand that
may represent an
emerging segment
Probe with classes of service
Create a class of service to
respond to the believed new
segment
• Set service levels at or close to
anticipated threshold levels
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Probe with classes of service
Observe take up of class of service
• Is it over-used? (or abused?) If so
tighten qualification criteria
• Is it under-used? Consider removing
it
• Is it used but you fail to deliver to
expectations? Do people complain? If
no then consider removing it. You
are over promising
Fixed delivery date class of
service emerged this way.
Initially abused by
marketing, eligibility
criteria were tightened
up.
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Telecom Equipment Example
A platform maintenance
department at a telecom
equipment manufacturer
receives demand only from
internal application
departments…
… Each request is tagged with the
originating telco operator for
whom the request is being
implemented. Each operator is
given a lane on the kanban board
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Telecom Equipment Example
Imagine 3 American telco operators
with different strategic positions…
• Verizon value quality most
• Sprint value time-to-market
• Voicestream/T-Mobile USA values low
cost
Now design and offer 3
classes of service…
• High quality, tight “done”
criteria for each step
• Short lead time – pull priority,
looser “done” criteria
• Low cost – junior staff, lowest
priority compared to other
work
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Different lanes, different risks
Done
F
E
I
Engin-
eering
Ready
Deploy-
ment
Ready
G
D
GY
PB MN
10 ∞
P1
AB
Ongoing
Development Testing
Done Verification Acceptance
10 10
Verizon 10
10
Sprint
T-Mobile
10
DE
DA
Each lane represents a different
source of demand but also
different fitness criteria and
threshold values
Different classes of service and
different pull criteria policies are
defined for each lane providing
service levels tuned to the “fitness
for purpose” expectations of each
customer
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
To have confidence you are
offering a service that is “fit for
purpose”, you must offer different
classes of service
To serve more than one market
segment adequately, you must
offer a selection of classes of
service
Lesson
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Classes of service should align to
market segments and fitness
criteria (or stakeholders needs)
Lesson
KPIs cannot be general! They need to
be tied to customer expectations.
Different segments have different
expectations. Hence, different
threshold levels of the KPI
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Classifying Metrics
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
85% at
10 days
Mean
5 days
98% at
25 days
ChangeRequests
ProductionDefects
85% at
60 days
Mean
50 days
98% at
150 days
Median
45 days
Lead Time Distribution is a KPI
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Blocker Cluster Data Guides Improvements
Harvested blocker tickets over a
1 month period
Cluster blockers based on the
stories behind the delay
Each cluster represents a risk
Identify Likelihood, Total Impact
& Average Impact
Identify whether occurs in the
tail of the lead time distribution
Define risk reduction &
mitigation actions
http://www.klausleopold.com/2013/09/blocker-clusters-problems-are-not.html
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Avg. Lead Time
Avg. Delivery RateWIP
Pool
of
Ideas
Ready
To
Deliver
Cumulative Flow is a General Health Indicator
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Test
Ready
Flow Efficiency is a General Health Indicator
F
E
I
G
D
GY
PB
DE MN
P1
AB
Customer Lead Time
Waiting Waiting WaitingWorking
Ideas
Dev
Ready
5
Ongoing
Development Testing
Done
3 35
UAT
Release
Ready
∞ ∞
Flow efficiency % = Work Time x 100%
Lead Time
Working WaitingWorking
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Liquidity is a General Health Indicator
The volume of pull transactions in a kanban system defines its liquidity
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Volatility is a General Health Indicator
The derivative of liquidity shows us kanban system volatility
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Wrap Up
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
ESP Training Modules
Module 1 Portfolio Management (Day 1 & 2)
 Strategy, fitness for purpose, KPIs, Cost of Delay, Scheduling,
Sequencing, Portfolio risk, risk hedging, risk profiling, aligning
strategy & capability, strategy review
Module 2 Enterprise Services (Day 3)
 Understanding kanban systems, real options, upstream Kanban,
commitment & replenishment, lead time, chance vs assignable
cause variation
Module 3 Project & Demand Management (Day 4)
 Demand analysis, demand shaping, capacity planning, project
forecasting, risk review, labor pool liquidity, workflow liquidity
Module 4 Real Options, Portfolios, Programs,
Dependencies & Scaling(Day 5)
 Scaling Kanban, dependencies, visualizing dependencies, portfolio
Kanban, stand ups, service delivery reviews, ops reviews
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
ESP Training
ESP training is delivered on-premises with clients
around the world
To order an ESP training class, contact Wes Harris,
Commercial Director of David J. Anderson &
Associates, wes@djaa.com
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
Thank you!
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.
About
David Anderson is an innovator in
management for 21st Century
professional services businesses. He
leads a training, consulting,
publishing and event planning
company dedicated to developing,
promoting and implementing new
management thinking & methods…
David has 30+ years experience in the high technology
industry starting with computer games in the early 1980’s.
He has led software organizations delivering superior
productivity and quality using innovative methods at large
companies such as Sprint and Motorola.
David defined Enterprise Services Planning and originated
the Kanban Method an adaptive approach to improved
service delivery. His latest book, published in June 2012, is,
Lessons in Agile Management – On the Road to Kanban.
David is also Chairman of Lean Kanban Inc., a business
operating globally, dedicated to providing quality training &
events that bring Kanban and Enterprise Services Planning to
a broad audience of professionals around the world.
sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc.

More Related Content

What's hot

HowTo Design your kanban board
HowTo Design your kanban boardHowTo Design your kanban board
HowTo Design your kanban board
Jo Seibert
 
David anderson kanban when is it not appropriate
David anderson   kanban when is it not appropriateDavid anderson   kanban when is it not appropriate
David anderson kanban when is it not appropriate
AGILEMinds
 
The Tupalo.com Kanban Story - LKSE 2012
The Tupalo.com Kanban Story - LKSE 2012The Tupalo.com Kanban Story - LKSE 2012
The Tupalo.com Kanban Story - LKSE 2012
Nina Schwab
 

What's hot (20)

Portfolio Kanban
Portfolio KanbanPortfolio Kanban
Portfolio Kanban
 
Kanban maturity model visualization examples
Kanban maturity model   visualization examplesKanban maturity model   visualization examples
Kanban maturity model visualization examples
 
HowTo Design your kanban board
HowTo Design your kanban boardHowTo Design your kanban board
HowTo Design your kanban board
 
Kanban on different flight levels - with an implementation example
Kanban on different flight levels - with an implementation exampleKanban on different flight levels - with an implementation example
Kanban on different flight levels - with an implementation example
 
Patterns of Kanban Maturity
Patterns of Kanban MaturityPatterns of Kanban Maturity
Patterns of Kanban Maturity
 
David anderson kanban when is it not appropriate
David anderson   kanban when is it not appropriateDavid anderson   kanban when is it not appropriate
David anderson kanban when is it not appropriate
 
Scrum to Scrumban Migration
Scrum to Scrumban MigrationScrum to Scrumban Migration
Scrum to Scrumban Migration
 
Kanban 101 - 3 - Kanban Essentials
Kanban 101 - 3 - Kanban EssentialsKanban 101 - 3 - Kanban Essentials
Kanban 101 - 3 - Kanban Essentials
 
Statik, Kanban's hidden gem
Statik, Kanban's hidden gemStatik, Kanban's hidden gem
Statik, Kanban's hidden gem
 
FLIGHT LEVELS OF KANBAN (KLAUS LEOPOLD) - LKCE13
FLIGHT LEVELS OF KANBAN (KLAUS LEOPOLD) - LKCE13FLIGHT LEVELS OF KANBAN (KLAUS LEOPOLD) - LKCE13
FLIGHT LEVELS OF KANBAN (KLAUS LEOPOLD) - LKCE13
 
Introduction of Kanban metrics
Introduction of Kanban metricsIntroduction of Kanban metrics
Introduction of Kanban metrics
 
Kanban's 3 Agendas (London Lean Kanban Day)
Kanban's 3 Agendas (London Lean Kanban Day)Kanban's 3 Agendas (London Lean Kanban Day)
Kanban's 3 Agendas (London Lean Kanban Day)
 
Kanban introduction
Kanban introductionKanban introduction
Kanban introduction
 
STATIK (Systems Thinking Approach to Introduce Kanban) Workshop Meetup
STATIK (Systems Thinking Approach to Introduce Kanban) Workshop MeetupSTATIK (Systems Thinking Approach to Introduce Kanban) Workshop Meetup
STATIK (Systems Thinking Approach to Introduce Kanban) Workshop Meetup
 
LKCE19 Klaus Leopold - Flight Levels in Action
LKCE19 Klaus Leopold - Flight Levels in ActionLKCE19 Klaus Leopold - Flight Levels in Action
LKCE19 Klaus Leopold - Flight Levels in Action
 
The Tupalo.com Kanban Story - LKSE 2012
The Tupalo.com Kanban Story - LKSE 2012The Tupalo.com Kanban Story - LKSE 2012
The Tupalo.com Kanban Story - LKSE 2012
 
Scrumban Demystified
Scrumban DemystifiedScrumban Demystified
Scrumban Demystified
 
Kanban Basics for Beginners
Kanban Basics for BeginnersKanban Basics for Beginners
Kanban Basics for Beginners
 
Kanban values exercise
Kanban values exerciseKanban values exercise
Kanban values exercise
 
Kanban step bystep
Kanban step bystepKanban step bystep
Kanban step bystep
 

Viewers also liked

Visualisation dashboards
Visualisation dashboardsVisualisation dashboards
Visualisation dashboards
Neil Francis
 
Opening & Key Note - Modern Management Methods UK 2013 - Kanban Evolutionary ...
Opening & Key Note - Modern Management Methods UK 2013 - Kanban Evolutionary ...Opening & Key Note - Modern Management Methods UK 2013 - Kanban Evolutionary ...
Opening & Key Note - Modern Management Methods UK 2013 - Kanban Evolutionary ...
David Anderson
 
LLKD13 thriving under uncertainty
LLKD13 thriving under uncertaintyLLKD13 thriving under uncertainty
LLKD13 thriving under uncertainty
Okaloa
 
Key Note - Modern Management Methods - Kanban Evolutionary Management
Key Note - Modern Management Methods - Kanban Evolutionary ManagementKey Note - Modern Management Methods - Kanban Evolutionary Management
Key Note - Modern Management Methods - Kanban Evolutionary Management
David Anderson
 

Viewers also liked (20)

"Fitness for Purpose" - Resilience & Agility in Modern Business
"Fitness for Purpose" - Resilience & Agility in Modern Business"Fitness for Purpose" - Resilience & Agility in Modern Business
"Fitness for Purpose" - Resilience & Agility in Modern Business
 
Key Note - Devlin 2013 - No crystal ball gazing - The Pragmatism of The Kanba...
Key Note - Devlin 2013 - No crystal ball gazing - The Pragmatism of The Kanba...Key Note - Devlin 2013 - No crystal ball gazing - The Pragmatism of The Kanba...
Key Note - Devlin 2013 - No crystal ball gazing - The Pragmatism of The Kanba...
 
Key Note - Stop Starting, Start Finishing 2013 - Aligning Creative Work with ...
Key Note - Stop Starting, Start Finishing 2013 - Aligning Creative Work with ...Key Note - Stop Starting, Start Finishing 2013 - Aligning Creative Work with ...
Key Note - Stop Starting, Start Finishing 2013 - Aligning Creative Work with ...
 
Key Note - PMI Congress Poland - The Role of the Project Manager with Kanban
Key Note - PMI Congress Poland - The Role of the Project Manager with KanbanKey Note - PMI Congress Poland - The Role of the Project Manager with Kanban
Key Note - PMI Congress Poland - The Role of the Project Manager with Kanban
 
Using Agile Principles to Deliver Real Business Value at Scale
Using Agile Principles to Deliver Real Business Value at ScaleUsing Agile Principles to Deliver Real Business Value at Scale
Using Agile Principles to Deliver Real Business Value at Scale
 
Visualisation dashboards
Visualisation dashboardsVisualisation dashboards
Visualisation dashboards
 
Resilient change, Lean Kanban Netherlands Oct2012
Resilient change, Lean Kanban Netherlands Oct2012Resilient change, Lean Kanban Netherlands Oct2012
Resilient change, Lean Kanban Netherlands Oct2012
 
Opening & Key Note - Modern Management Methods UK 2013 - Kanban Evolutionary ...
Opening & Key Note - Modern Management Methods UK 2013 - Kanban Evolutionary ...Opening & Key Note - Modern Management Methods UK 2013 - Kanban Evolutionary ...
Opening & Key Note - Modern Management Methods UK 2013 - Kanban Evolutionary ...
 
Key note - Lean Kanban Central Europe 2013 - Kanban & Evolutionary Management
Key note - Lean Kanban Central Europe 2013 - Kanban & Evolutionary ManagementKey note - Lean Kanban Central Europe 2013 - Kanban & Evolutionary Management
Key note - Lean Kanban Central Europe 2013 - Kanban & Evolutionary Management
 
Key Note - London Lean Kanban Day - Deep Kanban - Worth the investment?
Key Note - London Lean Kanban Day - Deep Kanban - Worth the investment?Key Note - London Lean Kanban Day - Deep Kanban - Worth the investment?
Key Note - London Lean Kanban Day - Deep Kanban - Worth the investment?
 
LLKD13 thriving under uncertainty
LLKD13 thriving under uncertaintyLLKD13 thriving under uncertainty
LLKD13 thriving under uncertainty
 
Key Note - Software Executive Summit - Better predictability with kanban
Key Note - Software Executive Summit - Better predictability with kanbanKey Note - Software Executive Summit - Better predictability with kanban
Key Note - Software Executive Summit - Better predictability with kanban
 
Making Better Decisions - understanding "fitness for purpose", matching strat...
Making Better Decisions - understanding "fitness for purpose", matching strat...Making Better Decisions - understanding "fitness for purpose", matching strat...
Making Better Decisions - understanding "fitness for purpose", matching strat...
 
Oka dicsovery kanban_llkd14
Oka dicsovery kanban_llkd14Oka dicsovery kanban_llkd14
Oka dicsovery kanban_llkd14
 
Key Note - Modern Management Methods - Kanban Evolutionary Management
Key Note - Modern Management Methods - Kanban Evolutionary ManagementKey Note - Modern Management Methods - Kanban Evolutionary Management
Key Note - Modern Management Methods - Kanban Evolutionary Management
 
Key Note - Agile China - Kanban An Alternative Path to Agility
Key Note - Agile China - Kanban An Alternative Path to AgilityKey Note - Agile China - Kanban An Alternative Path to Agility
Key Note - Agile China - Kanban An Alternative Path to Agility
 
Information Technology and Data Management Systems: Choosing an Indicator F...
Information Technology and Data Management Systems:  Choosing an Indicator F...Information Technology and Data Management Systems:  Choosing an Indicator F...
Information Technology and Data Management Systems: Choosing an Indicator F...
 
Information System Dashboard
Information System DashboardInformation System Dashboard
Information System Dashboard
 
Inside Lean Kanban (#lkuk14 keynote)
Inside Lean Kanban (#lkuk14 keynote)Inside Lean Kanban (#lkuk14 keynote)
Inside Lean Kanban (#lkuk14 keynote)
 
Servant leadership un neutered 2016 09 21
Servant leadership un neutered 2016 09 21Servant leadership un neutered 2016 09 21
Servant leadership un neutered 2016 09 21
 

Similar to Enterprise Services Planning: Defining Key Performance Indicators

Webinar Communicating Accomplishments
Webinar Communicating AccomplishmentsWebinar Communicating Accomplishments
Webinar Communicating Accomplishments
Dan Nelson
 

Similar to Enterprise Services Planning: Defining Key Performance Indicators (20)

Enterprise Services Planning - Scaling the Benefits of Kanban
Enterprise Services Planning - Scaling the Benefits of KanbanEnterprise Services Planning - Scaling the Benefits of Kanban
Enterprise Services Planning - Scaling the Benefits of Kanban
 
Enterprise Services Planning - Scaling the Benefits of Kanban
Enterprise Services Planning - Scaling the Benefits of KanbanEnterprise Services Planning - Scaling the Benefits of Kanban
Enterprise Services Planning - Scaling the Benefits of Kanban
 
Enterprise Services Planning - Scaling the Benefits of Kanban
Enterprise Services Planning - Scaling the Benefits of KanbanEnterprise Services Planning - Scaling the Benefits of Kanban
Enterprise Services Planning - Scaling the Benefits of Kanban
 
Enterprise Services Planning - Effective Middle Management
Enterprise Services Planning - Effective Middle ManagementEnterprise Services Planning - Effective Middle Management
Enterprise Services Planning - Effective Middle Management
 
Improving Customer Retention by Managing the Customer Journey Webinar Slides
Improving Customer Retention by Managing the Customer Journey Webinar SlidesImproving Customer Retention by Managing the Customer Journey Webinar Slides
Improving Customer Retention by Managing the Customer Journey Webinar Slides
 
KPI mahsa sharifi 2012
KPI mahsa sharifi 2012KPI mahsa sharifi 2012
KPI mahsa sharifi 2012
 
Kanban Cadences and Information Flow
Kanban Cadences and Information FlowKanban Cadences and Information Flow
Kanban Cadences and Information Flow
 
Lean Kanban India 2016 | Kanban Coaching for 2017 | Janice Lindeen Reed
Lean Kanban India 2016 | Kanban Coaching for 2017 | Janice Lindeen ReedLean Kanban India 2016 | Kanban Coaching for 2017 | Janice Lindeen Reed
Lean Kanban India 2016 | Kanban Coaching for 2017 | Janice Lindeen Reed
 
Pursuing Customer Inspired Growth
Pursuing Customer Inspired GrowthPursuing Customer Inspired Growth
Pursuing Customer Inspired Growth
 
BOOTSTRAPPING CUSTOMER SUCCESS: LESSONS LEARNED FROM THE ROAD
BOOTSTRAPPING CUSTOMER SUCCESS: LESSONS LEARNED FROM THE ROADBOOTSTRAPPING CUSTOMER SUCCESS: LESSONS LEARNED FROM THE ROAD
BOOTSTRAPPING CUSTOMER SUCCESS: LESSONS LEARNED FROM THE ROAD
 
5 controversial secrets of customer success
5 controversial secrets of customer success5 controversial secrets of customer success
5 controversial secrets of customer success
 
Essential Key Performance Indicators for Small and Mid-Size Business
Essential Key Performance Indicators for Small and Mid-Size BusinessEssential Key Performance Indicators for Small and Mid-Size Business
Essential Key Performance Indicators for Small and Mid-Size Business
 
Digital Businesses Need New KPIs
Digital Businesses Need New KPIsDigital Businesses Need New KPIs
Digital Businesses Need New KPIs
 
Risk management - Ripensare la Core competence
Risk management - Ripensare la Core competenceRisk management - Ripensare la Core competence
Risk management - Ripensare la Core competence
 
Customer Success for Marketing Software
Customer Success for Marketing SoftwareCustomer Success for Marketing Software
Customer Success for Marketing Software
 
Webinar Communicating Accomplishments
Webinar Communicating AccomplishmentsWebinar Communicating Accomplishments
Webinar Communicating Accomplishments
 
Popcorn, Indiana Case Study
Popcorn, Indiana Case StudyPopcorn, Indiana Case Study
Popcorn, Indiana Case Study
 
S&OP Thought Leadership.
S&OP Thought Leadership.S&OP Thought Leadership.
S&OP Thought Leadership.
 
SMX Melbourne 2012 - Auditing PPC Campaigns - Leigh Hanney
SMX Melbourne 2012 - Auditing PPC Campaigns - Leigh HanneySMX Melbourne 2012 - Auditing PPC Campaigns - Leigh Hanney
SMX Melbourne 2012 - Auditing PPC Campaigns - Leigh Hanney
 
Planning B2B Lead Generation Campaigns & Leveraging Content Personalization
Planning B2B Lead Generation Campaigns & Leveraging Content PersonalizationPlanning B2B Lead Generation Campaigns & Leveraging Content Personalization
Planning B2B Lead Generation Campaigns & Leveraging Content Personalization
 

More from David Anderson

More from David Anderson (19)

Kanban - the alternative path to agility
Kanban - the alternative path to agilityKanban - the alternative path to agility
Kanban - the alternative path to agility
 
Just say #no____ the altenative path to enterprise agility
Just say #no____ the altenative path to enterprise agilityJust say #no____ the altenative path to enterprise agility
Just say #no____ the altenative path to enterprise agility
 
Getting to pull at enterprise scale
Getting to pull at enterprise scaleGetting to pull at enterprise scale
Getting to pull at enterprise scale
 
Creating Resilient, Robust, & Antifragile Organizations
Creating Resilient, Robust, & Antifragile OrganizationsCreating Resilient, Robust, & Antifragile Organizations
Creating Resilient, Robust, & Antifragile Organizations
 
Kanban - follow your own path to agility
Kanban - follow your own path to agilityKanban - follow your own path to agility
Kanban - follow your own path to agility
 
Social engineering with in for kanban
Social engineering with in for kanbanSocial engineering with in for kanban
Social engineering with in for kanban
 
Creating Robust, Resilient & Antifragile Organizations (using Kanban)
Creating Robust, Resilient & Antifragile Organizations (using Kanban)Creating Robust, Resilient & Antifragile Organizations (using Kanban)
Creating Robust, Resilient & Antifragile Organizations (using Kanban)
 
Kanban & Organizational Maturity
Kanban & Organizational MaturityKanban & Organizational Maturity
Kanban & Organizational Maturity
 
10 Years of Kanban - What have we learned
10 Years of Kanban - What have we learned10 Years of Kanban - What have we learned
10 Years of Kanban - What have we learned
 
Social engineering with in for kanban
Social engineering with in for kanbanSocial engineering with in for kanban
Social engineering with in for kanban
 
Social engineering with in for kanban
Social engineering with in for kanbanSocial engineering with in for kanban
Social engineering with in for kanban
 
Enterprise Services Planning - Scaling the Benefits of Kanban
Enterprise Services Planning - Scaling the Benefits of KanbanEnterprise Services Planning - Scaling the Benefits of Kanban
Enterprise Services Planning - Scaling the Benefits of Kanban
 
10 years of kanban - what have we learned
10 years of kanban - what have we learned10 years of kanban - what have we learned
10 years of kanban - what have we learned
 
"Fitness for Purpose" - Resilience & Agility in Modern Business
"Fitness for Purpose" - Resilience & Agility in Modern Business"Fitness for Purpose" - Resilience & Agility in Modern Business
"Fitness for Purpose" - Resilience & Agility in Modern Business
 
Fitness For Purpose
Fitness For PurposeFitness For Purpose
Fitness For Purpose
 
Kanban - an alternative path to agility (Lean Kanban Southern Europe 2014)
Kanban - an alternative path to agility (Lean Kanban Southern Europe 2014)Kanban - an alternative path to agility (Lean Kanban Southern Europe 2014)
Kanban - an alternative path to agility (Lean Kanban Southern Europe 2014)
 
Making Better Decisions - Understanding Fitness for Purpose, Aligning Capabil...
Making Better Decisions - Understanding Fitness for Purpose, Aligning Capabil...Making Better Decisions - Understanding Fitness for Purpose, Aligning Capabil...
Making Better Decisions - Understanding Fitness for Purpose, Aligning Capabil...
 
Kanban - an alternative path to agility (Agile Russia)
Kanban - an alternative path to agility (Agile Russia)Kanban - an alternative path to agility (Agile Russia)
Kanban - an alternative path to agility (Agile Russia)
 
Kanban - an alternative path to agility (Agile Adria)
Kanban - an alternative path to agility (Agile Adria)Kanban - an alternative path to agility (Agile Adria)
Kanban - an alternative path to agility (Agile Adria)
 

Recently uploaded

Recently uploaded (9)

Travis Hills of Minnesota Leads Livestock Water and Energy in Sustainable Inn...
Travis Hills of Minnesota Leads Livestock Water and Energy in Sustainable Inn...Travis Hills of Minnesota Leads Livestock Water and Energy in Sustainable Inn...
Travis Hills of Minnesota Leads Livestock Water and Energy in Sustainable Inn...
 
Create the recognition your teams deserve.pptx
Create the recognition your teams deserve.pptxCreate the recognition your teams deserve.pptx
Create the recognition your teams deserve.pptx
 
Principles of Management analyze how Zara manage
Principles of Management analyze how Zara managePrinciples of Management analyze how Zara manage
Principles of Management analyze how Zara manage
 
Risk Management in Banks - Overview (May 2024)
Risk Management in Banks - Overview (May 2024)Risk Management in Banks - Overview (May 2024)
Risk Management in Banks - Overview (May 2024)
 
Presentation On "Yusuf Ibn Tashfin" a true leader (1061 to 1106)_ prepared by...
Presentation On "Yusuf Ibn Tashfin" a true leader (1061 to 1106)_ prepared by...Presentation On "Yusuf Ibn Tashfin" a true leader (1061 to 1106)_ prepared by...
Presentation On "Yusuf Ibn Tashfin" a true leader (1061 to 1106)_ prepared by...
 
Flexi time, Flexi work, QWL and Role Effectiveness
Flexi time, Flexi  work, QWL and  Role EffectivenessFlexi time, Flexi  work, QWL and  Role Effectiveness
Flexi time, Flexi work, QWL and Role Effectiveness
 
Project Management Professional (PMP)® from PMI
Project Management Professional (PMP)® from PMIProject Management Professional (PMP)® from PMI
Project Management Professional (PMP)® from PMI
 
Oprah Winfrey: A Leader in Media, Philanthropy, and Empowerment | CIO Women M...
Oprah Winfrey: A Leader in Media, Philanthropy, and Empowerment | CIO Women M...Oprah Winfrey: A Leader in Media, Philanthropy, and Empowerment | CIO Women M...
Oprah Winfrey: A Leader in Media, Philanthropy, and Empowerment | CIO Women M...
 
Organization design fashion or fit by Henry Mintzberg
Organization design fashion or fit by Henry MintzbergOrganization design fashion or fit by Henry Mintzberg
Organization design fashion or fit by Henry Mintzberg
 

Enterprise Services Planning: Defining Key Performance Indicators

  • 1. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Learn to care about what the customer cares about KPIs should shape improvements to service delivery Enterprise Services Planning Defining Key Performance Indicators Presenter David J. Anderson Swift Kanban Webinar 29 April 2015
  • 2. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Lean Kanban North America 2015 conference • “Back to our roots” • Implementing Kanban • Looking to the future… • Enterprise Services Planning
  • 3. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. • 2 Days of Learning Sessions • Choose Your ½ Day Workshops • Risk Profiling – David J Anderson • Cost of Delay – Don Reinertsen • Project Management with Kanban • Cynefin 101 for Portfolio Kanban • Simple Probabilistic Forecasting …and more! • Becoming Data-Driven • Objective Retrospectives • Forecasting • Enterprise Kanban & Lean Startup • Scrumban • Kanban Coaching • Blockers for Improvement • RBS Project Sizing • Kanban Academic Research …
  • 4. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Kanban experience reports Ultimate Software • BazaarVoice • web recommendations app and mobile development Including…
  • 7. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Fitness for Purpose
  • 8. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Which system is fitter? We don’t know! System B is faster but without understanding customer expectations, both may be fit enough 0 2 4 6 8 10 12 14 Lead Time (Days) System A Frequency 0 5 10 15 20 25 30 5 10 15 20 25 30 More Lead Time in Days System B Frequency Mean 17 days Mean 12 days
  • 9. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Measuring delivery against expectation 0 2 4 6 8 10 12 14 Lead Time (Days) System A Frequency 0 2 4 6 8 10 12 Lead Time Expectation Spread (Days) System A Frequency 0 5 10 15 20 25 30 5 10 15 20 25 30 More Lead Time in Days System B Frequency 0 5 10 15 20 25 30 35 40 45 -15 -10 -5 0 5 10 15 20 More Lead Time Expectation Spread (Days) System B Frequency Mean 17 days Mean 12 days System B is clearly fitter! System B delivers 5/7 within expectations System A only delivers 3/7 within expectations
  • 10. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. What makes a pizza delivery service “fit for purpose” ? Fitness criteria are metrics that measure things customers value when selecting a service again & again  Delivery time  Quality  Predictability  Safety (or conformance to regulatory requirements)
  • 11. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Meet Neeta - a project manager Neeta’s team are working late (again) Neeta needs to feed them with pizza What attributes do her team care about in a pizza delivery service? • Delivery time = approximately 1 hour • Non-functional quality = tasty & hot • Functional quality (order accuracy) = doesn’t matter if small mistakes are made, geeks will eat any flavor of pizza • Predictability = +/- 30 minutes is acceptable • Safety = so long as health & safety in food preparation is good, it’s fine
  • 12. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Neeta is also a working mom! Neeta gets home late. Her kids are really hungry and even though she shouldn’t she decides to order pizza for them What makes a pizza delivery service acceptable to her kids age 4, 6, 9 & 11 years? • Delivery time = 20 minutes • Non-functional quality = doesn’t matter too much, it’s pizza!!! • Functional quality (order accuracy) = it must be cheese pizza! No other flavor is acceptable! (even if you take the pepperoni off) • Predictability = +/- 5 minutes maximum!!! • Safety = only mommy worries about that stuff!
  • 13. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. To be “fit for purpose” there is a product component & a service delivery component We need to offer a selection of different recipes which are tasty & popular. However, we must also deliver with speed & predictability Lesson
  • 14. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Modern creative & knowledge worker businesses often obsess with product definition & strategy Operational excellence and service delivery excellence are often overlooked or treated as inferior management skills Lesson
  • 15. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Neeta has 2 identities – Mother and Project Manager Each of Neeta’s identities represents a different market segment for the pizza delivery service Traditional demographic & income group segmentation does not accurately capture the context to understand “fit for purpose” Nor, for that matter, do personas. As Neeta represents two segments not just one persona Lesson
  • 16. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Exercise – Understanding Fitness for Purpose Pick a service with which you are familiar Consider what makes it “fit for purpose?” Which attributes make you select the service, again and again? What are your expectations for each attribute?  Why?  What (business) risks drive your expectations?
  • 17. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Fitness Criteria Drive Evolutionary Change
  • 18. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Fitness criteria are metrics that measure observable external outcomes Fitness criteria are metrics that measure things customers or other external stakeholders value  Delivery time  Quality  Predictability  Safety (conformance to regulatory requirements) or metrics that qualitatively assess actual outcomes such as  customer satisfaction  employee satisfaction
  • 19. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Evolutionary change has no defined end point Evolving Process Roll forward Roll back Initial Process Future process is emergent Evaluate Fitness Evaluate Fitness Evaluate Fitness Evaluate Fitness Evalua Fitnes We don’t know the end-point but we do know our emergent process is fitter!
  • 20. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Business Risks, Fitness Criteria & Classes of Service should all align Business risks are things which are uncertain that affect the performance of our business such as nature of demand, consistency of supply, delivery predictability, seasonal windows of opportunity, time value of money Classes of service offered should align with business risks Metrics used to evaluate service delivery capability should be fitness criteria that are derived from specific business risks For example, opportunity cost of delay requires us to measure lead time and understand sensitivity to schedule uncertainty
  • 21. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Select Key Performance Indicators Carefully! KPIs should be fitness criteria metrics with threshold values that represent “good enough” – the level where the service delivery is “fit for purpose” KPIs should assess service delivery capability and indicate fitness for purpose. In doing so, a KPI indicates your likelihood of success – of surviving and thriving - by adequately satisfying your customers? KPIs should be recognizable by your customers as something meaningful! If your customer doesn’t recognize the metric it isn’t a “key” “performance” indicator, it is some other kind of metric
  • 22. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Other Useful Metrics Some other metrics are useful  Those which guide improvements  Those which indicate general health Is your metric evaluating and guiding a specific change to improve fitness of your business such as an initiative to improve vendor response times? Or, is it a general business health indicator such as liquidity? If neither of these, then it is a metric that you almost certainly don’t need! It should be removed!
  • 23. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Defining Fitness Criteria
  • 24. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Market Adoption Lifecycle Segmentation Enthusiasts Early Adopters Early Majority Late Majority Laggards Rate Of Market Adoption time Moore’s Chasm Little Chasm Hip Cool Buggy Community development Niche Market Features Good func quality Adequate non-func quality Permission Giving Early adopter Exceptional func and non- func quality Cost Effective Broad Features Exceptional func and non- func quality Low Cost Easy Access Forced adoption Viewed as taxation Fit for purpose Fit for purposeChanges over time
  • 25. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Customer Storytelling & Clustering Tell stories about real customers, their motivation, what they buy and why. Cluster similar stories Give each cluster a “nickname” e.g. • “All ins” • “Aspirationals” • “Bet hedgers” • “Boy scouts”
  • 26. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. You can’t just ask! Neeta, how fast would you like your pizza delivered? How predictable do you need us to be with our delivery estimate? Customers will tend to tell you they need better service and more features than they really need! Would you pay more for the things you say you need and want? No, probably not! Believe what customers actually do, do not believe what they say they’ll do! Actually behavior will vary from declared intent!
  • 27. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Who knows your customers? Front line staff  Those who take and those who deliver orders  Those who provide “customer care”  Often the lowest paid staff in a business  Often the highest turnover, shortest tenured positions  And yet, they have the vital information that enables the business to survive, thrive and compete
  • 28. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Pizza boy knows Neeta’s Story! Staff who meet customers can be trained to learn what matters to them and why Create ways to capture customer stories or directly involve customer facing staff when defining customer segments fitness criteria
  • 29. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. GT car manufacturer story A well known manufacturer of GT cars determined customers were prepared to wait 21 months to take delivery They learned this by letting delivery time slip to 27 months and receiving cancellations and customers switching to a rival manufacturer Determining fitness criteria thresholds by reducing service levels until customer complaints rise to dangerous levels isn’t a “safe to fail” approach! Damaging your brand, your reputation and your profitability is a strange way to discover how to be… “fit for purpose!”
  • 30. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Retarding customer service until customers complain vehemently or take their business elsewhere could be damaging • Undermines brand • Damages reputation • Loss of market share • Loss of revenue Probing for threshold values by reducing service quality isn’t “safe to fail” Is it “safe to fail”? We need general guidance that allows us to probe for fitness criteria threshold values that is “safe to fail” If we can’t ask, and we can’t allow service to decline until complaints make the threshold evident, what can we do?
  • 31. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Probing for Threshold Levels
  • 32. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Look for clusters or patterns of demand, or patterns of similar expectations, or new sources of demand that may represent an emerging segment Probe with classes of service Create a class of service to respond to the believed new segment • Set service levels at or close to anticipated threshold levels
  • 33. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Probe with classes of service Observe take up of class of service • Is it over-used? (or abused?) If so tighten qualification criteria • Is it under-used? Consider removing it • Is it used but you fail to deliver to expectations? Do people complain? If no then consider removing it. You are over promising Fixed delivery date class of service emerged this way. Initially abused by marketing, eligibility criteria were tightened up.
  • 34. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Telecom Equipment Example A platform maintenance department at a telecom equipment manufacturer receives demand only from internal application departments… … Each request is tagged with the originating telco operator for whom the request is being implemented. Each operator is given a lane on the kanban board
  • 35. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Telecom Equipment Example Imagine 3 American telco operators with different strategic positions… • Verizon value quality most • Sprint value time-to-market • Voicestream/T-Mobile USA values low cost Now design and offer 3 classes of service… • High quality, tight “done” criteria for each step • Short lead time – pull priority, looser “done” criteria • Low cost – junior staff, lowest priority compared to other work
  • 36. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Different lanes, different risks Done F E I Engin- eering Ready Deploy- ment Ready G D GY PB MN 10 ∞ P1 AB Ongoing Development Testing Done Verification Acceptance 10 10 Verizon 10 10 Sprint T-Mobile 10 DE DA Each lane represents a different source of demand but also different fitness criteria and threshold values Different classes of service and different pull criteria policies are defined for each lane providing service levels tuned to the “fitness for purpose” expectations of each customer
  • 37. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. To have confidence you are offering a service that is “fit for purpose”, you must offer different classes of service To serve more than one market segment adequately, you must offer a selection of classes of service Lesson
  • 38. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Classes of service should align to market segments and fitness criteria (or stakeholders needs) Lesson KPIs cannot be general! They need to be tied to customer expectations. Different segments have different expectations. Hence, different threshold levels of the KPI
  • 39. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Classifying Metrics
  • 40. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. 85% at 10 days Mean 5 days 98% at 25 days ChangeRequests ProductionDefects 85% at 60 days Mean 50 days 98% at 150 days Median 45 days Lead Time Distribution is a KPI
  • 41. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Blocker Cluster Data Guides Improvements Harvested blocker tickets over a 1 month period Cluster blockers based on the stories behind the delay Each cluster represents a risk Identify Likelihood, Total Impact & Average Impact Identify whether occurs in the tail of the lead time distribution Define risk reduction & mitigation actions http://www.klausleopold.com/2013/09/blocker-clusters-problems-are-not.html
  • 42. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Avg. Lead Time Avg. Delivery RateWIP Pool of Ideas Ready To Deliver Cumulative Flow is a General Health Indicator
  • 43. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Test Ready Flow Efficiency is a General Health Indicator F E I G D GY PB DE MN P1 AB Customer Lead Time Waiting Waiting WaitingWorking Ideas Dev Ready 5 Ongoing Development Testing Done 3 35 UAT Release Ready ∞ ∞ Flow efficiency % = Work Time x 100% Lead Time Working WaitingWorking
  • 44. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Liquidity is a General Health Indicator The volume of pull transactions in a kanban system defines its liquidity
  • 45. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Volatility is a General Health Indicator The derivative of liquidity shows us kanban system volatility
  • 47. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. ESP Training Modules Module 1 Portfolio Management (Day 1 & 2)  Strategy, fitness for purpose, KPIs, Cost of Delay, Scheduling, Sequencing, Portfolio risk, risk hedging, risk profiling, aligning strategy & capability, strategy review Module 2 Enterprise Services (Day 3)  Understanding kanban systems, real options, upstream Kanban, commitment & replenishment, lead time, chance vs assignable cause variation Module 3 Project & Demand Management (Day 4)  Demand analysis, demand shaping, capacity planning, project forecasting, risk review, labor pool liquidity, workflow liquidity Module 4 Real Options, Portfolios, Programs, Dependencies & Scaling(Day 5)  Scaling Kanban, dependencies, visualizing dependencies, portfolio Kanban, stand ups, service delivery reviews, ops reviews
  • 48. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. ESP Training ESP training is delivered on-premises with clients around the world To order an ESP training class, contact Wes Harris, Commercial Director of David J. Anderson & Associates, wes@djaa.com
  • 49. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. Thank you!
  • 50. sales@leankanban.com @leankanbanu Copyright Lean Kanban Inc. About David Anderson is an innovator in management for 21st Century professional services businesses. He leads a training, consulting, publishing and event planning company dedicated to developing, promoting and implementing new management thinking & methods… David has 30+ years experience in the high technology industry starting with computer games in the early 1980’s. He has led software organizations delivering superior productivity and quality using innovative methods at large companies such as Sprint and Motorola. David defined Enterprise Services Planning and originated the Kanban Method an adaptive approach to improved service delivery. His latest book, published in June 2012, is, Lessons in Agile Management – On the Road to Kanban. David is also Chairman of Lean Kanban Inc., a business operating globally, dedicated to providing quality training & events that bring Kanban and Enterprise Services Planning to a broad audience of professionals around the world.

Editor's Notes

  1. Fitness criteria are metrics that measure things customer or other external stakeholders value such as delivery time, quality, predictability, conformance to regulatory requirements or metrics that value actual outcomes such as customer satisfaction or employee satisfaction
  2. Fitness criteria are metrics that measure things customer or other external stakeholders value such as delivery time, quality, predictability, conformance to regulatory requirements or metrics that value actual outcomes such as customer satisfaction or employee satisfaction
  3. Fitness criteria are metrics that measure things customer or other external stakeholders value such as delivery time, quality, predictability, conformance to regulatory requirements or metrics that value actual outcomes such as customer satisfaction or employee satisfaction
  4. Fitness criteria are metrics that measure things customer or other external stakeholders value such as delivery time, quality, predictability, conformance to regulatory requirements or metrics that value actual outcomes such as customer satisfaction or employee satisfaction
  5. Traditional change is an A to B process. A is where you are now. B is a destination. B is either defined (from a methodology definition) or designed (by tailoring a framework). To get from A to B, a change agency* will guide a transition initiative to install destination B into the organization. *either an internal SEPG or external consultants
  6. Median is always less than the mean and lies between the mode and the mean. Median is less sensitive to the tail on distribution and hence less variable in the presence of assignable/special cause variation causing a long tail. However, it is the mean that is used in Little’s Law and therefore we do care about risks that affect the tail in the distribution when using Little’s Law to forecast.