This is the (long overdue) translation of my opening keynote at the Italian Agile Day. I just presented it for IASA Ireland (International Association Software Architects). The a3thinker.com iphone/ipad app I mentioned (on Lean problem solving, 5 Whys, etc) went on sale on the Apple store on Mar 18. The A3 Thinker's Action Deck (physical cards) is going to be on sale shortly...and it is just awesome ;-)

1. @agilesensei
www.agilesensei.com
www.a3thinker.com
written, illustrated
and performed by
Claudio Perrone

2. How do you
develop
WINNING
products?

3. a few years ago, this would have been my
answer…

4. Waterfall focused
on speed &
efficiency through
specialization

5. Despite all the best intentions, however,
Bringing projects to “success” always
required heroic efforts

6. … And the risk of failing to meet
customer expectations was high
“
Software and cathedrals are much
the same – first we build them,
then we pray.
--- Samuel T. Redwine, Jr.

7. Luckily, in 2001, I met someone who
OPENED MY EYES…

8. 1
Agile
Software
Development

9. “It was then that I
discovered the
true nature of the
problem.”

10. “I started by
applying XP
technical
practices”

11. “… Which I later integrated with scrum”

12. “My teams and I fully embraced Agile
development to grow a world-class
software organization”

13. We syncronized our work daily
To DO
Doing
Done
Burndown
Work Left
Family 1
Days
Unplanned
Next

14. We systematically reviewed our process
Good
Bad
Next
Do Less
Do more
Start
Doing
Stop
Doing
Keep
Doing

15. The revolution was represented by the
“inspect & adapt” approach to development

16. Our culture was based on “empowerment”
rather than “command & control”

17. We crafted opinionated software
“The best software
has a vision.
The best software
takes sides.
…
Decide what
your vision is and run with it.”
-- 37 signals

18. We won awards
and respect…

19. We almost
touched the sky…

20. Almost

21. “July 2009 was the wettest July
on record in Ireland”

22. “I’ll remember it as the month MATTEO
was born”

23. BUT it is also the month
I had to let go of a dream

24. WITHOUT A JOB

25. WITHOUT A purpose

26. WITH A GROWING
Family to support…

27. … I did the only
thing that was left
for me to do…

28. I became a Lean & Agile consultant!

29. On my first mission, a cio asked me a
question that haunts me to this day…

30. “If you were so smart,
why did you fail?”

31. 2
Lean

32. The adoption of Agile practices at
enterprise level proved to be a mighty
challenge

33. Scrum works
Except when it
doesn’t

34. “to succeed…”
…you'll need to design
processes that improve the
product development flow…

35. … Optimize the whole, rather
than just focus on unit
costs…

36. … and develop a culture of
continuous improvement

37. …

38. Awesome.
Do it!

39. er…Alternatively, you can buy a bunch of
cool cloud-based enterprise 2.0 solutions
and/or send your people to a “certified
scrum gladiator”tm course.

40. Teams gained the support of Entreprise
transition communities, communities of
practice and improvement workgroups
Improvement
backlog
Enterprise
Transition
Community (ETC)
Process Definition
Workgroup
..
Continuous Integration
Workgroup
..
Architecture
CoP
..
Scrum
CoP
…
Automated testing
CoP
…
etc

41. Customers
Lean destroyed the myth that splitting work
Kaizen
Current State Value-Stream Map
in big batches improves the economies xx to yy (high season)
Period calculated: from of
Acme Reinsurance
Push arrow
F: 200/month
scale.
Date: xxx
inbox
Author: Claudio Perrone
Average: 10/day
Pull arrow
Proc. Lead Time: 71.75h
Non VAT
3d
Value Adding Time (VAT)
0.25h
2d
2.5d
5h
2h
1h
1h
Calculate
premium
2h
Submit
quote
Proc. Efficiency 12.9%
Train on
Kanban
pulling
Reinsurance placement
Request for
reinsurance
Register
20jobs
Clean &
analyze
data
FIFO
Reduce
batch
sizes
10jobs
$ value
Calculate
risk
2jobs
due date
Clarify
classes of
service
C/T too
long
Setup
Kanban
board
5jobs
Improve
system
validation
Total Cycle Time: 9.25h

42. … And provided many “tools” to obliterate
Customers
the competition
Future State Value-Stream Map
Period calculated: from xx to yy (high season)
Acme Reinsurance
Date: xxx
F: 200/month
Pull arrow
Author: Claudio Perrone
Average: 10/day
Proc. Lead Time: 46.25h
Non VAT
2d
Value Adding Time (VAT)
0.25h
1d
1.5d
4h
2h
1h
2h
1h
Calculate
premium
Submit
quote
Proc. Efficiency 17.8%
Train on
Kanban
pulling
Reinsurance placement
Request for
reinsurance
Register
MAX
5 jobs
Reduce
batch
sizes
Clean &
analyze
data
MAX
4 jobs
Calculate
risk
MAX
2jobs
Clarify
classes of
service
C/T too
long
Setup
Kanban
board
MAX
2jobs
Improve
system
validation
Total Cycle Time: 8.25h

43. I Integrated the kanban method to enable an
evolutionary approach to change

44. KANBAN enabled the introduction of agility in
otherwise unsuitable contexts
Development
Ordered
Backlog
3
6
Rq.
Fixed
DOD
DOR
Expedite
1
PreTesting
CD
Ready
Smoke Test
PreTested
Done
DOD
Integration
Done
Integration Team
(Complex configuration)
DOD

45. But it was only the beginning

46. A war was tragically
consuming behind
corporate walls

47. Firefighting, arbritrary targets and
autocratic leadership were undermining the
opportunity for a real transformation

48. The traditional agile approach towards
management wasn’t going to be effective
… You are a “chicken”. You
shouldn’t even talk

49. Does this look
familiar?

51. Do you
remember
how the
story ends?

52. W. Edwards deming believed that…
“
95% of variation in worker’s
performance is governed by the
systems
---W. Edwards Deming

53. Perhaps…
“
We should work on our processes, not
the outcome of our processes.
---W. Edwards Deming

54. And I would add…
“
Let’s design systems as if tomorrow
we were more stupid than today.
--- Claudio Perrone

55. “At Toyota, improving and managing are one
and the same”
Traditional thinking:
Normal daily management
+
improvement
Toyota’s thinking:
Normal daily management
=
Process improvement

56. “you manage things, you lead people”
“
There are three kinds of leaders.
Those who tell you what to do.
Those who allow you to do what you
want.
And lean leaders who come down to
the work and help you figure it out.
--- John Shook, Chairman & CEO, Lean Enterprise Institute

57. During my work with “a3 thinking”, a Toyota
management process to systematically solve
problems, improve and mentor…

58. I discovered that a3 thinking = Lean thinking, a
vivid expression of the scientific method!

59. “The Lean revolution gave a purpose and method
to management”
“
I want you to use your own heads.
And I want you actively to train
your people on how to think for
themselves.
--- Eiji Toyoda

60. “Hence, I offer you my own definition”
“
Lean is a business strategy
to make money*
THROUGH
the development of people
(*) replace with “create customer value” or “achieve
results”, if you prefer

61. Using Lean and agile, I brought operational
excellence to many clients, from large
enterprises to fast-growing companies around
Europe

62. But that old
question still
remained
unanswered…

63. … Until one day

64. 3
Lean Startup

65. I entered a new world

66. ... A world that recognized the extraordinary
challenges I once faced
“
A startup is a human institution
designed to create new products
and services under conditions of
extreme uncertainty.
--- Eric Ries

67. It gave me a path to create a sustainable
business around products that customers want
data,
feedback,
insights
Customer development
PROBLEM/
SOLUTION
FIT
Customer
discovery
PRODUCT/
MARKET
FIT
Customer
validation
stop
stop
SCALE
Customer
creation
stop
Company
building
Lean & Agile
development
Pivot
hypothesis,
experiments,
insights
Problem: Unknown
solution:
Unknown

68. ... A path characterized by frequent scientific
experiments…
Learn
Build
(establish an
hypothesis)
(Build an experiment
to test that hypothesis)
Measure
(Determine a quantitative or qualitative method to evaluate that hypothesis.)

69. … To accelerate the rate of learning…
Learn
idea
(whether to pivot
or persevere)
Build
(Turn ideas into product)
(often a series of
MVPs)
data
Product
Measure
(How customers respond)

70. … And measure real progress towards success
Acquisition
Activation
retention
revenue
referral
How do users find you?
Do users have a great first experience?
Do users come back?
How do you make money?
Do user tell others?
( see Dave McClure
“Pirate” metrics)
Cohort analysis

71. “
It is not the employer who pays the
wages. Employers only handle the
money. It is the customer who pays
the wages
--- Henry Ford

72. Today

73. I document my business model(s) explicitly
Top 3
Problems
Existing
alternatives
Solution
Key metrics
Cost structure
www.leancanvas.com
Unique
Value
Proposition
Unfair
Advantage
Channels
Revenue streams
Customer
Segments
Early
adopters

74. my vision is built on opinions untested
assumptions

75. … which I systematically validate with
experiments…

76. … that force me to “get out of the building”

77. …and gather data to verify whether my
actions affect customer behavior
IN PROGRESS
BACKLOGS
Observations/
INSIGHTS
Hypotheses
SELECTED
DESIGN/BUILD
EXPERIMENTS
PARTIAL
ROLLOUT
DONE
VALIDATE
QUALITATIVELY
VALIDATED
LEARNING
FULL
ROLLOUT
VERIFY
QUANTITATIVELY
DONE
DONE

78. specifically...
I execute tasks
To develop features
That are part of experiments
That I run to validate hypotheses
That I formulate thanks to
observations about the world that
surrounds us.

79. I Use A3 thinking to systematically
focus on the “one metric that matters”
in the current stage of my business
Target
Increase conversion rate
from 8% to 10%
by Mar 31st 2013

80. I validate my solutions, OFTEN with low fidelity MVPs

81. … and Activate enthusiastic earlyvangelists with a
glimpse of a future that will come

82. … until, of course, my next pivot
www.a3thinker.com

83. What will
Your future
look like?

84. Final Thoughts

85. “
Don’t dream of success.
Create the conditions to
inevitably converge to it.
--- Me (1967 - )

86. “
Talk does not cook rice
claudio@agilesensei.com
www.agilesensei.com
www.a3thinker.com
www.twi6er.com/agilesensei
--- Chinese proverb

87. Thank You!
Claudio
Perrone
claudio@agilesensei.com
www.agilesensei.com
www.a3thinker.com
www.twi6er.com/agilesensei

88. P.S.: The future is here.