DOTS = Dots On The Stickies

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This is followup #1/n to my LSSC12 debrief.

Liz Keogh in her excellent debrief mentions my idea of limiting the time in progress represented on a board or within a column.

Limit dots in progress. Put dots on the cards every day they’re in progress and you’ll be able to see the flow very clearly.

My portfolio deck (don’t worry if it doesn’t make sense without my commentary – another post introducing it is in the works) contains a new acronym “WIDIP” for “Work Item Days in Progress” for a metric that leverages this nice visualisation. Karl Scotland liked my idea but questioned my marketing ability. It needs a better name! Over drinks in the Seaport Hotel I came up with the recursive acronym “DOTS” for “Dots On The Stickies”.

DOTS look like this:

Here the team have marked a dot on each active sticky note as part of readying the board for the daily stand-up meeting. For the board as a whole, DOTS here is 9.  We might want to look at DOTS on a per-column basis too.

Taking to heart the advice of Steven Spear’s keynote I will state a hypothesis before looking at the data: I expect that DOTS will turn out to be a useful leading indicator of cycle time. You can ask me at next year’s conference whether I have managed to validate it.

LSSC12 Debrief

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Two days of tutorials start today and I’m written this in a bit of a rush, but here’s my run-down of what has been an superb LSSC12 conference in Boston. Certainly the best conference I’ve been to (not counting last year’s unconference – can’t wait for Mayrhofen). Nice variety of formats to keep us interested, superb keynotes, varied talks, fantastic hallway/mealtime conversations.

My one regret was not making the Lean Camp openspace on Sunday which by all accounts was very intense. Just too much to fit in.

Monday’s daytime highlights:

  • Steven Spear’s keynote got me thinking a lot more carefully about what experimentation means. This one will stick.
  • Jeff Anderson’s talk was impressive, also a little controversial. I’ve been following his Lean Startup-inspired approach to change management for a while and have encouraged a couple of other people doing similar things to compare notes with him too. The controversy was around validation, in particular its granularity (person-level) and transparency (not a lot). My lasting impression though was of his ambition. Wow.
  • Michael Kennedy’s talk was very interesting. I struggled to hear him from the back of the hall in Antwerp but I’m so glad I gave him a second try here in Boston. I’m not quite as excited by the “tradeoff curves” specifically as some appear to be, but there’s definitely something important there, and I touched on it in my first talk on Tuesday (blog & slides to follow).

For Monday evening I organised an informal session on portfolio-level stuff (sic) to help define the space a bit better and to decide how (if at all) we want to carry the conversation forward. 23 people showed up at 20:45 in the evening – another wow. As expected, we found that the problem space is huge. As hoped, we agreed to use a mail group, and someone (I forget who, sorry) had the very smart idea of a hashtag (#ppm) on posts to kanbandev.

Tuesday was a big day. My scheduled speaking slot on Tuesday’s Risk track got extended as a result of the following speaker dropping out, creating an opportunity I couldn’t refuse to encourage people to attack portfolio-level problems with the Kanban method. My scheduled talk “Who Moved My Risk?” went fine, but the question-filled portfolio session was more than I could have hoped for. Thanks everyone! I’ll share slides and blog on both talks separately.

That’s enough about me. Other Tuesday highlights:

  • Greg Howell’s keynote on Lean in the construction industry. There’s a pattern emerging here, excellent keynotes from people outside our industry that help us to understand better what’s happening inside our own.
  • The Ignite talks were great, the format definitely works, more of these please.
  • The Brickell Key Awards banquet. Congratulations to Arne Roock and Jim Benson, richly deserved.

With my talks done, I could relax a bit on Wednesday. More great talks, including:

  • Don Reinertsen was on good form (is he ever not?).
  • Larry Maccherone and Karl Scotland on advanced metrics. Larry in particular is doing some amazing work in this area (I got a demo over breakfast). Karl prompts me to write a short followup post on this topic too.

Bring on the 2013 conference in Chicago!

Coming in June: Kanban comes to London!

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After the big conference month of May comes a June that is packed with Kanban-related training opportunities in London. There’s something for nearly everyone: a one-day event you can send your manager to, an accredited 2-day class, and David Anderson is in town at the end of the month for his 3-day masterclass.

The first of these is on June 11th. Lean Thinking and Kanban for IT is aimed at managers and other senior leaders in IT. The speakers are Jack Strong of LeanKit in the UK (a long-standing user and proponent of visual management and Lean in industry), Patrick Steyeart and Johan Vanwelkenhuysen of TeamProsource in Belgium and the UK respectively (pushing boundaries on the application of Kanban and Lean for projects and programmes), and myself, of David J Anderson & Associates, Inc. We will show how visual management, Kanban, Lean and Systems Thinking can be applied to service delivery, to projects and programmes, and to the problems organisations so often face at portfolio level (a subject close to my heart).

I’ve mentioned Patrick a few times here and it’s fantastic that we have this first opportunity to work together.

June 18th-19th I’m teaching our accredited 2-day class Successful Evolutionary Change with Kanban, operated by our UK partners TeamProsource. Learn not just how kanban systems work at the nuts-and-bolts level, but also how the Kanban Method catalyses organisational change and improvement.  “Immensely valuable” was one recent piece of feedback on this class and I must say that I find it very satisfying to teach too.

You may recall my excitement early last year after attending David’s Kanban Leadership Workshop, the forerunner to his 3-day Advanced Kanban Masterclass, coming to London June 27th-29th. This is for you if you have a level of Kanban experience (or have at least attended a 2-day class) and wish to develop your knowledge and skills as a change agent, whether that is in a leadership role or as a coach. I really can’t recommend this class highly enough.

Speaking at #LKSE12, Madrid

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Two conferences, two very different talks.  I’ve mentioned my #LSSC12 (Boston) talk already, what about #LKSE12 (Madrid) the week after next?

Tired of those bottom-up history then first principles then practices then benefits talks?

Instead, why not let yourself get smacked in the face with a realistically complex kanban system (as might be used by a team that knows a thing or two), then see it taken apart to see how it really works?  It’s “Kanban the hard way” – neither a beginner’s nor an expert’s talk, but something for everyone.  Some good old-fashioned Systems Thinking mixed in with some new (new to Kanban anyway) “knowledge discovery process“, all explained straightforwardly.  Be there, at the best value Lean & Kanban conference in Europe this spring!

Invest in your #LSSC12 conference experience (part 2)

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(see also part 1: Invest in your conference experience: Plan to confer!)

Karl Scotland published today his personal LSSC12 progamme on his blog. I had to try it for myself, and it turns out that it’s really easy to do.  Just:

  1. Create an account (here’s mine)
  2. “Favourite” the talks and other events you plan to attend
  3. Share by copying & pasting the embed code as I’ve done below, or simply tweet away!
  4. Go to http://leansoftwaresystemsconferen2011.sched.org/mobile/ to keep your personal programme handy on your mobile device (yes, the “2011″ is correct at the time of writing)

“Who moved my risk?” (4pm Tuesday 9th in Harborview 3) is my talk in the Risk track. It will be a lot more interactive and perhaps more provocative than my usual.  Can’t wait!

Invest in your conference experience: Plan to confer!

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Behind the scenes and out on Twitter, small groups of people are busy investing in their #lssc12 conference experience by planning huddles around topics of special interest.

Here are three of mine:

1) Portfolio-level problems

We’ve had enough offline discussion to agree that portfolio management (if that’s the right phrase) is full of context-specific problems, that there can be no one-size-fits-all solution, and that (surprise, surprise) an evolutionary, problem-solving approach would seem to be a good starting point.  I can’t be the only one tired of hearing that portfolio management is mainly about allocating people, backlog grooming, or layers of additional organisation and process.  We can do better than this.

2) Simulation

My early career was in simulation (of aircraft) and I’ve used simulation to good effect at various times since.  It has been good to rekindle that interest recently by experimenting with Troy Magennis’s simulation package. We’ve spoken a few times over the past few months but never face to face;  at #lssc12 we are both speakers on the Risk track.

3) The process of introducing Kanban into organisations

In recent months we’ve seen some very interesting posts on the use of Story Mapping techniques and ideas from Lean Startup to guide Kanban introductions.  It’s an area of active creativity and experimentation and we have plenty to learn from each other.  My small contribution is around the way we describe the foundational principles, encouraging proper attention to initial conditions.  I’ll be touching on this in my talk in Madrid (#lkse12).

Have you planned your #lssc12?  Who will you meet?  Do they know?

Upcoming

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I have several speaking/training events coming up in May and June.  They’ll be up on djaa.com soon enough but you heard it here first:

May:
1st Webinar: Evolutionary Change with Kanban, UK-based (registration site TBC)
2nd MBC networking event in Buxton, Derbyshire, UK (ping me if you’re local and interested)
9th-10th Lean Kanban Southern Europe, Madrid, Spain (lkse12.leanssc.org)
13th-18th LSSC 2012, Boston, MA (lssc12.leanssc.org)
June:
11th 1-day Management Training: Successful Evolutionary Change with Kanban, London, UK (registration site TBC)
13th BCS meeting in Manchester, UK (manchester.bcs.org)
18th-19th 2-day Training: Successful Evolutionary Change with Kanban, London, UK (registration site TBC)
20th Kanban Leadership Retreat, Mayrhofen, Austria
29th Agile North, Preston, UK (agilenorth.org)

Two things learned from CALMalpha

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CALMalpha – the first (alpha) Cynefin, Agile & Lean Mashup – was interesting in ways both intended and unintended.  Too much of the latter for some, and I did struggle with it myself at times.  But after letting things settle for a while, a couple of valuable takeaways:

Lesson 1: sometimes we jump too quickly into model-building when we’d be better off spending time listening to what the data might want to say to us.

There’s some actionable advice hidden there for practitioners engaged in process work such as the building of kanban systems: depending on the context, consider not reaching for the process mapping tool right away, instead start with the simple thing of making the work visible.

This lesson might apply also to the process of community-building and I’m sure the irony isn’t lost on the event organisers ;-)

Lesson 2: designing for resilience means accepting a degree of redundancy or waste.

Nothing startlingly new there, but it’s a lesson that risks being forgotten by two groups, namely those driven by the elimination of waste and those with a narrow focus on value.  And it helps me to crystallise something:

My proposition is that systems resilient to variety (in the type and urgency of request) and variation (in size, for example) are not only more effective but easier to deal with, aligning the interests of the organisation with those of the customer, worker and manager.  Not only do we have the tools to help achieve this effectively and repeatably for many types of knowledge work, the apparent waste of non-urgent and even speculative work is key to both short-term predictability and long-term success.

Release cadence, lead times and cost of carry

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I once led a team that made 8 releases a year, or one release every 6 weeks or so. To use the jargon, a release cadence of 6 weeks.  Not exactly continuous delivery, but at the time it didn’t seem too bad either.  We had a dirty secret though: we ran phases of analysis, development, testing and deployment (yes, this was a phase, not just an event) in parallel, and our true lead time (from commitment to deployment) was actually closer to 18 weeks.  Those releases accounted for only one third of the work in progress; the remaining two thirds remained very much in progress.

What was the cost of that hidden inventory?  The calculation is actually quite straightforward:

Assume a burn rate of $12,000,000 per year (that’s not the actual number, but it will do), or $1,000,000 per month.  An 4.5 month cycle time means that on average we have 2.25 months’ work or $2,250,000 in inventory on our books. Multiply that by a suitable rate (let’s use 30% – I will explain this in a moment) and we arrive at an annual cost of carry of $675,000.  That’s a serious amount of money, yet arguably quite a conservative measure what the business stood to gain from lead time reduction.

Why 30%?  It’s just a parameter, but two justifications for my choice:

  1. An appeal to the rule-of-thumb figure of 25% for the annual carry cost of manufacturing inventory, which Don Reinertsen in Managing the Design Factory suggests underestimates the cost of carry in design work significantly.
  2. Because a portfolio with a target rate of return of (say) 15% will on average be half complete; the remaining work should earn twice that, i.e. 30%. See A funny thing happened to my ROI

[Addendum You may have spotted (as I just did) that my calculation gives a cost of carry equivalent to your portfolio return divided by the number of inventory turns per year. Perhaps that's easier to understand than justification #2]

Not convinced?  Look at it from your customer’s perspective.  How much could it be worth to them?

 

Intangibles matter

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Elroy Dimson (Emeritus Professor of Finance at London Business School, writer on investment strategy) recently wrote

Risk means more things can happen than will happen.

Perhaps I have been reading too many physics books lately, but this quote got me thinking of parallel universes as a metaphor for risk management. How much do we really know about the universe we live in now? Are there future universes out there that we should try to create or to eliminate, that way shaping our journey into the unknowable?

Evil Spock!
One universe to avoid

In Kanban, Intangible work items are those that affect our destination some indeterminate or distant time in the future. They’re uncertain (we’re dealing in outcomes that may never materialise) and hard to value, but their potential impact is sufficient to make the habit of these small investments a very good one to nurture.

This isn’t the first time I’ve linked risk management with Intangibles; see for example “Intangibles, value and risk (or: Portfolio thinking)“.  I return to the subject as part of an ongoing conversation with my friend and collaborator Jabe Bloom (@cyetain) who has kindly given in to my pleading for him to publish his “Space Shuttle” exercise.  Read about it here.

Tempting as it might be to focus mainly on eliminating downside risks, it’s important to understand that a healthy portfolio actively seeks upside risks too. Invest in your people, and one of them might surprise you. Product and platform investments might leave you better able to take advantage of market opportunities that are hard to see right now. And as I’ve argued before, not every process improvement should wait on the identification of a cast-iron ROI. Keep investing in the 4P’s of capability (People, Product, Platform, Process) and help bring those happier universes into existence!

If that’s too fanciful for you, I finish with this from Wikipedia’s page on Intangible Assets:

Competitive intangibles are the source from which competitive advantage flows, or is destroyed.

Intangibles matter; the worst risk of all might be to underestimate them.