My notes for the Portfolio Management panel at #lkfr13

Yesterday I had the privilege of sitting on a panel on the subject of portfolio management at Lean Kanban France. Our facilitator was Thomas Lissajoux and my co-panelists were Ian Carroll, Chris Young and David Joyce.

Thomas did us the great service of asking for some notes ahead of time. I found his headings really helpful, and I’ve decided to share my notes. And here they are…

How would you define ‘portfolio management’?

I see portfolio management as managing at that kind of level where maintaining the right balancing between competing projects is as big a challenge as any individual project.

What are the specifics of a lean/agile approach?

Depressingly, I see too many people talk about portfolio management like it was a sausage factory. The story goes like this: “just pay attention to the quality of ingredients going into the machine and success is guaranteed”. I doubt that this metaphor works very well even for sausages!

A lean approach means several things:

1)     Paying attention to the balance of demand and capability (supply), managing WIP relative to capacity and relative to lead time aspirations

2)     Paying appropriate attention to flow, because speed, predictability and timeliness matters (to the extent that there are economic penalties when we get these wrong)

3)     Expecting the way we manage the portfolio to keep evolving. That evolution needs to have some positive effects at project and organisational level that customers will recognise and appreciate, and there needs to be effective feedback in the other direction too (success and failures at project level should generate portfolio-level learning).

In which context/clients do you do portfolio management?

I’ve twice been in the role of portfolio manager myself, once with a $XXmillion annual budget, the second time at a smaller scale but with wider organisational impact.

Nowadays as a consultant I find that many problems on the ground point back to problems in portfolio management. Parts of the process get overwhelmed, and the organisational feedback loops aren’t fast or capable enough avoid real pain and cost. I’ve seen extreme cases where the whole portfolio seems to be grinding to a halt (there are reasons why this happens, a topic for another post maybe).

What about the previous situation and its shortcomings?

In many organisations, to get a project started it’s enough merely to sell the idea. The capability of the organisation to deliver and the impact on existing work is not given much consideration.

What key practices/tools/artefacts/meetings/metrics do you use?

  • The sheer number of projects (relative to the capability to manage them effectively)
  • Their value (with an understanding of the relationship between value and urgency)
  • Planned, potential and actual burn rates (making sure we have the capacity to deliver; too often the sum of all promises doesn’t match the sum of available effort)
  • Lead times
  • Amount of work in certain key states
  • $WIP

Tool-wise I’ve had success with

  • A3, as a means to test project rationale
  • Changes to portfolio reporting (feedback loops)
  • Customer validation – for its own sake and as a catalyst for process change
  • Regular customer meetings (cadenced)

What about the Kanban principles and practices at portfolio level?

They need to be applied with imagination. Add the phrase “Find ways to…“, perhaps “Find multiple ways to…”.

Core practices:

  • Find (multiple) ways to visualise work at portfolio level (transparency).
  • Find (multiple) ways to limit work in progress at portfolio level (balance).
  • Look at how policies can drive better portfolio performance (transparency again).
  • Pay attention to the feedback loops (and again!)
  • Keep improving and evolving (collaboration)

Foundational principles (or rather, their underlying values):

1)    Understanding: Make sure change is based on genuine understanding of how things work now, taking both internal and external perspectives

2)     Agreement: Always have the right people (ie those with a stake in the solution) solving problems at the right level, seeking agreements that will hold in practice

3)     Respect: the first two, plus creating the expectation that improvement will benefit people, not just the numbers

4)     Leadership: grow the next generation of portfolio managers (growing yourself in the process)

Additionally I would add that the portfolio mindset and Kanban are really complementary. Identify

  • different kinds of projects
  • different risk profiles
  • different stakeholders
  • different budgets/appetites

Make these dimensions visible (I mean an in-your-face, Kanban’s-killer-feature kind of visible, not just a filter on a report), aim for a healthy mix of work. With success comes trust in both your ability to deliver and the underlying principles and techniques that make it happen.

What challenges did you face?

Pretty much everywhere, far too many projects and projects that take far too long to deliver.

  • In one company, more projects than there were people, not just in IT but in the whole company!
  • In another, projects taking multiple years, little thought given to the possibility of incremental delivery

What key advice would you have for ‘change agents’ about to dig into portfolio management questions?

  • How is demand managed against capability?
  • Are lead times too long? (a very different question to the one of whether projects are late – dates tend to be genuinely critical on no more than 20% of a typical portfolio – though the long projects tend also to be ones most prone to delay)
  • Can you put a value on the amount of WIP (I refer to this as $WIP)? High shock value!
  • Another great metric once you understand it: What is that WIP costing in delayed business opportunity and delayed feedback?
  • Is the typical project process set up just to deliver to spec or to meet an evolving customer need? See recent posts Stand up meeting, thinking tool, leadership routine and Anticipating needs ahead of time.

What are the next steps? How can you improve/scale?

Quantify, visualise, sanity check. Look for imbalances. Look for sources of unpredictability, especially waiting. Look at the relationship between project size and predictability.

And remember that scale comes with addressing coordinating costs and other kinds of friction end-to-end, not from rolling out more process or adding layers on top.

Anticipating needs ahead of time

Last week’s post Stand up meeting, thinking tool, leadership routine included this line:

In what ways do the activities of this stage help us anticipate what will be needed?

“Anticipate” and “will”: two very future-focused words.

That emphasis on the future is captured very nicely in the closing words of the Toyota Customer Promise that I found displayed on a plaque behind the customer service desk at my local Toyota dealership:

…anticipating the mobility needs of people and society ahead of time

Think of a service on which you personally rely. Wouldn’t you be delighted if they anticipated your needs ahead of time? What process innovations would be needed in order for that to happen? How could that thinking be translated into your workplace, and how would it then be sustained?

These are important questions. They’re questions of customer focus, of flow, and of leadership, the three direction values. They’re important because an organisation that works on its capability to anticipate and meet future needs is a fitter organisation, and it’s the fittest that thrive.

There’s more where this came from! My book is going to be a while, but in the next few weeks you can hear me speak on Kanban’s values at:

Unfortunately I must report the postponement of the UKSMA annual conference at which I was to give the keynote. I’ll mention it here when it has been rearranged.

Stand up meeting, thinking tool, leadership routine

My last post was on the provocative side; to restore this blog’s usual balance, here are some antidotes to some of the problems I described. These are ways to use your kanban board to help you look at your process from the perspectives of customer focus and flow, two values from that middle direction layer.

Imagine you’re facilitating a stand-up meeting in front of your board. If you have a physical board, you’re probably heading (in your mind at least) towards the board’s right hand side so that you can stand looking left across the board. If you use an electronic kanban tool, you can achieve a similar effect by turning your laptop or monitor monitor to the left a bit (ok, I’m kidding).

Now scan the board from right to left (in other words working your way backwards from the end of your process towards the start) and ask these questions of the columns:

Customer focus:

  • Whose needs are explored in this stage of the process, and how? Whose aren’t, and what risks does that pose?
  • What do we learn in this stage that we don’t (or can’t) know earlier? In what ways do the activities of this stage help us anticipate what will be needed?
  • What is still to be learned? Are outstanding uncertainties best dealt with by pressing on or by going back?

Flow:

  • How do work items leave this stage in the process? By what criteria do we know that they’re ready? How are those criteria expressed? How is the state change communicated?
  • Typically, how much time do work items spend in this stage? How much (if any) of that time is spent in active work?
  • What are the most significant sources of unpredictability? In the work in or the waiting? Waiting for internal availability or for external dependencies to be resolved?
  • How much of this stage’s capacity is absorbed in rework? Or in failure demand, which arrives only because previous work failed to meet customer needs adequately?
  • How do work items arrive into this stage? How do we know that they’re ready to be worked on?

You may find it helpful to ask some of these questions of individual work items too.

What we’ve done is to turn a popular protocol for standup meetings into a thinking tool. You can try it with other values, for example transparency (is it sufficiently clear what’s going on here?) or balance (are we overburdened here?), or some other concern that seems relevant.

Caution: questions like these already assume the following:

  1. That the process has sensible objectives (to deliver the right kind of things)
  2. That the work flow is scoped sensibly (starts with the right kind of questions, finishes with the right kind of result)
  3. That the work flow is organized sensibly (sequenced to generate high value learning as quickly as possible)

I’ve encountered plenty of processes where these assumptions are open to challenge. For example:

  • A change management process whose objective was the approval or rejection of design changes, disconnected from any actual implementation process. Needless to say, any customer satisfaction delivered out of that process was somewhat short lived.
  • My bank’s account opening process. A frustrating process and several weeks later and I still don’t have online banking, let alone two additional products that I would be willing to pay for. I sense an institutionalised lack of curiosity into my needs and what might be in the way of delivering on them.

Some acknowledgements are in order:

  • The first set of questions questions are heavily influenced by Michael Kennedy and the model of the Knowledge Discovery Process. That’s a Lean product development model, but I find that many processes are usefully understood in those terms.
  • The “whose needs?” questions (the first bullet) point to the very important question: “who holds a veto on delivery?”. This is one of many good customer focus takeaways from Lean Software Strategies by Peter Middleton and my friend Jim Sutton.
  • The idea of understanding a process by walking through it backwards is an old Lean trick. I don’t know for sure how it was discovered and popularised, but Steven Spear describes very well its use as a leadership routine inside Toyota in his book The High-Velocity Edge.
  • Failure Demand is a concept I associate (in the nicest possible way) with John Seddon.

These are all great ideas. Combining them with visual management and practised routine makes them (as well as the values) accessible and actionable, don’t you think?

Is this Agile’s Achilles’ heel?

I’ve been refreshing my talk on Kanban’s values and I paused – as my audience is invited to do – on the middle layer of the “onion”, the direction layer of customer focus, flow and leadership. Then it struck me: it’s in this layer where the alignment with Agile seems the least comfortable.

For the inner layer (drive), it’s very easy to find Agile practices that support the values of transparency, balance and collaboration; that’s an exercise I often lead audiences through. The outer layer (discipline) is interesting but relatively uncontroversial. Understanding, agreement and respect: how would you expect to succeed without those?

But look closely at direction. Could this be where Agile implementations lose their energy or come unstuck? Could it be that this is Agile’s Achilles’ heel? Looking at its three Lean-inspired values in turn:

  • Customer focus: How many Agile implementations are team-focused or technology-focused, lacking in external perspective? Does the identification of the Product Owner (PO) role encourage customer focus to be confused with product focus? How often does the customer get relegated to a source of raw material for the machine, expected to serve it instead of being served?
  • Flow: Yes, rhythms are important. In their right context, timeboxes are indeed powerful. But to place them on a pedestal, to deny the benefits of decoupling input, output and control rhythms, to fail to see smoothness as something worth striving for… Well, you get the picture.
  • Leadership: It seems to me that the obsession in some quarters with bad management makes it harder for others to talk about good leadership. Add to that an industry built around managed Agile transition, roles with “Master” and “Owner” in the title, confusion about the meaning of self-organisation, and so on. What a mess!

In short: confusion, contradiction and conflict where what’s needed is direction.

If you’re doing a better job of anticipating and delivering on your customer’s needs, that’s meaningful improvement, very likely a meaningful indication that you’re moving in the direction of increased agility.  If the flow of work is faster, smoother, more predictable and less burdensome, likewise. And clearly it’s important to sustain these things, so organisational capability must be an improvement focus in its own right.

Keep making progress on these things in tandem, and it’s clear that you will keep delivering benefit to the customer, those inside the system, and the wider organisation. I would go as far as to say that when so-called improvement is at the expense of one of these groups, then you have to ask whether it is really an improvement at all. Direction matters.

You don’t have to buy in to the Kanban method to see and accept this. But it is a very good starting place; it’s the humane, start with what you do now approach to change, an alternative path to agility. And it’s not confused!

Find ways to…

  1. Find ways to visualize your work
  2. Find ways to limit your work in progress
  3. Find ways to manage flow
  4. Find ways to implement feedback loops
  5. Find ways to improve (collaboratively, using models and the scientific method)
  6. Find ways to encourage leadership (at every level)*

Then ratchet it up, in terms of both creativity and persistence. Keep finding ways to…

As Larry Wall (of perl fame) says: there’s more than one way to do it. We all think we know what a kanban system should look like, but the further you depart size-wise, speed-wise, scale-wise or complexity-wise from what’s typical – where the board sees a worthwhile and manageable amount of movement each day – the more creative you’ll need to be.

A card wall visualisation may not even be the best starting point. Look at what you have – your existing practices, your existing data. Kanban is after all the start with what you do now method.

(* Yes, that sixth one is a principle of the Kanban method rather than a core practice like the others, but it still works. See also Small Acts of Leadership.)

Upcoming

It’s that time of year again, the season of mists, mellow fruitfulness, and a great series of European conferences:

I’m on the programme committee for LKUK13 and I know that there has been stiff competition for speaking slots at all these events. They’ll be great! And every year I’m surprised at how each one manages somehow to find a style all of its own.

Regular readers of this blog will know that 2013 has been for me the year of Kanban’s values. These form the backbone for my new introductory/something-for-everyone talk on Kanban. If you’re new to these ideas, why not come and join me? My talks are usually placed early in the programme so there’ll be plenty of opportunity for discussion afterwards.

Economy and survival

Via Willam Zinsser’s On Writing Well (a real gem):

Economy and survival are the two key words in nature. Examined out of context, the neck of the giraffe seems uneconomically long, but it is economical in view of the fact that most of the giraffe’s food is high in the tree. Beauty as we understand it, and as we admire it in nature, is never arbitrary.
Moshe Safdie, Beyond Habitat

Small acts of leadership

In case you thought leadership was only for other people:

  1. Do something fresh with transparency: try out a new visualisation on someone else; crystallise a pattern or policy out of the decisions you’ve made recently; review your feedback loops
  2. Check your balance: Overloaded? Not finishing stuff? No wiggle room? Too short term? Not enough experimentation?
  3. Foster collaboration: work on a problem with a friend; make an introduction; look at who works with whom
  4. Adjust your customer focus: identify your customer, the customer behind the customer, the deeper need behind their apparent problem, next year’s problem. Talk!
  5. Pay attention to flow: Can you see it? What is stuck today? Where do blockages repeatedly occur? Why is that?
  6. Grow understanding: go and see; share what you found; admit “we don’t know enough yet”; try an experiment (and dare to describe it as such)
  7. Seek agreement: That change you’re involved in… Whose idea was it, who’s implementing it, who’s impacted? All agreed?
  8. Show and expect respect: Do we still have to ask about this one?
  9. Develop leadership in yourself and in others: be an encouragement to someone else in their small act of leadership; share this handy list :-)

None of these require you to wear a special badge. Try one!

Progress update on the writing project

I’m continuing to make progress on the “onion” model. I’ve made the case in a previous post for the outer discipline layer comprising the values of understandingagreement and respect, I’ve resequenced the values pages on meldstrong, and I’m part way through the flurry of re-editing that this resequencing has necessitated.

I’ve finished (for now at least) the pages for drive, the inner core with its the more practice-focussed values of transparencybalance and collaboration. I’d love your feedback on those. They should now read less like the script of my Chicago talk and should each be capable of being read standalone.

Next up editing-wise is that middle layer of direction, comprising customer focusflow and leadership. Wish me luck!

If any three of those nine values resonate with you – whether they say to you “Yes that’s me!” or “Ouch, we need more of this!” – can I urge you to sign up at meldstrong and list them in your profile? The more that people do this, the stronger the inferences I can draw from the data. Thank you.

Peter Senge on the purpose of Systems Thinking

From a recent 5-minute video on John Hunter’s Curious Cat blog:

[The] fundamental rationale for all of this: it’s not to understand systems – that’s an abstraction – it’s to understand how it is that the problems that are the most vexing, difficult and intransigent come about. To get a perspective on those problems that gives us some leverage and insight on what we might do differently.
Peter Senge