Positive Incline Mike Burrows (@asplake) moving on up, positively

May 20, 2012

Portfolio stuff (sic) at LSSC12

This is followup #2/n to my LSSC12 debrief.

As I mentioned in my debrief, I organised an evening meeting on portfolio “stuff” to take place after the speakers’ reception. What kind of an idiot arranges a meeting for 20:45, after drinks, and with a deliberately vague title?  23 people showed up at that late hour, demonstrating a significant level of interest. If you’re one of those 23, thank you!

“Portfolio stuff” became “Portfolio-level problems” in my bonus talk the next day (my slot was extended due to the next speaker dropping out).  I’ll write up my talk more fully in the coming days, but what both titles indicate is a desire to spend some time identifying the problem rather than to announce that we have cracked how to do portfolio management.  To describe the problem (if there is indeed only one) in the terms of the presence or absence of a particular kind of solution is a kind of sloppy thinking I wish to avoid.

I must make plain that I take seriously the evolutionary approach of Kanban and its principles of “start with what you do now”, “respect current roles and responsibilities” etc. I use “understanding, respect, agreement, leadership” as a way of bringing together both these principles and some of the Systems Thinking approaches that we teach in our classes.

So lets start with a little understanding.  What does the problem space look like?

Limiting myself to the past 4 years, my direct experience ranges from leading a team of 15 (the whole of IT in that small company), responsibility for a team of 70 within a big name global enterprise, and looking at the work of an IT organisation of hundreds within one division of a major enterprise.  That’s quite a spread.

My Monday night group reported projects (if that’s the right word) ranging in duration from days to months. I’ve seen worse, ie years passing before anything gets delivered.  Orders of magnitude differences.

We defined “portfolio level problem” as problems seen, managed or originated (ouch!) above the organisational level of teams of individual contributors.

These include:

  • The challenge of translating the objectives of the organisation into actual work
  • The reverse of that challenge, seeing how actual work on the ground corresponds to organisational needs
  • Managing flow day-to-day, ensuring that important work has the help it needs to progress to completion
  • Managing and improving flow system-wide

Steering clear of:

  • Allocating individual people to their work (it distresses me that some writers seem to think that this is even a problem, let alone a solution).
  • Push, meaning any approach that seems to value starting over finishing. Includes any system with stage gates or focussed on backlog grooming that lacks strong mechanisms to balance supply and demand further down the pipeline.  It is not enough to limit what you start.

It’s a very interesting and wide-ranging problem space. “Portfolio management” might be the right name for it but I’d love to have a better one that didn’t carry the baggage of failing approaches.  “Portfolio Kanban” works well if it implies the method and thinking, less well if it means only stickies on whiteboards.  Perhaps we need to do some work to reclaim the phrase.

Upcoming posts will explore the applicability of the Kanban method and offer some techniques for use in this space.  Stay tuned. Meanwhile, a reminder to use hashtag #ppm for related posts to kanbandev.

May 17, 2012

LSSC12 Debrief

Filed under: Kanban,lean,Portfolio — Tags: , , , , , — Mike @ 12:32 pm

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!

May 3, 2012

Coming in June: Kanban comes to London!

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.

February 10, 2012

Release cadence, lead times and cost of carry

Filed under: Kanban,lean,Portfolio — Tags: , , , , — Mike @ 1:48 pm

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?


February 2, 2012

Intangibles matter

Filed under: Kanban,leadership,lean,Portfolio — Tags: , , , , — Mike @ 12:56 pm

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.

December 30, 2011

2011: Another big year

Some highlights (the work-related ones anyway):

  • Feb: Set up Positive Incline Limited
  • Feb: Kanban Leadership Workshop (aka Kanban Coaching Workshop) with David Anderson in London
  • Mar-Sep: Continued part-time dev management role in Budapest, Hungary (and a big thank you to my former colleagues at Encore International, now part of M&C Energy Group)
  • Mar-May: Kanban consultancy in Johannesburg, South Africa as a DJA&A associate
  • Jun: The Kanban Leadership Retreat in Reykjavic, Iceland (#klris)
  • Oct-Nov: The Lean/Kanban conferences in Antwerp and Munich and the LESS conference in Stockholm (#lkbe11, #lkce11 and #less2011 respectively)
  • Nov: Speaking to my local (Matlock) business networking group about Kanban. Not just for techies! (#MBCnetworking)
  • Dec: Joined DJA&A full-time (more on that next year)
  • Dec: Leading my first 2-day DJA&A Kanban class in London

Top posts of 2011:

Older posts still going strong:

September 20, 2011

Yes, Kanban scales

Filed under: Kanban,leadership,lean,Portfolio — Tags: , , , , — Mike @ 2:33 pm

Yes, Kanban scales, but perhaps not quite in the way you expect.

Let’s start at the beginning. First follow the foundational principles[1]

  1. Start with what you do now
  2. Agree to pursue incremental, evolutionary change
  3. Initially, respect the current process, roles, responsibilities & job titles

then adopt the core practices

  1. Visualize the Workflow[2]
  2. Limit WIP
  3. Manage Flow
  4. Make Process Policies Explicit
  5. Improve Collaboratively (using models/scientific method)

These three principles and five practices are what define Kanban.  Not sticky note commandments (“On the first day thou shalt pull a sticky note from the Ready column and by the fifth day it shall be entered unto the column of Done”) but a collaborative framework for leading change.

But change to what?

Kanban’s home turf would appear to be software development, the focus of David Anderson’s book. But Kanban doesn’t come with a predefined process – we start out by applying it to existing processes – and it’s a not hard to imagine it being applied to other team-based “knowledge work”.

Personal Kanban scales this down to the level of the individual.  Some of the principles and practices lose emphasis in this transition, though this effect is lessened if we recognise that even personal effectiveness and improvement are best played as team sports.  The wide diversity of work typically seen in Personal Kanban tends to lead to very generic process designs and a lack of explicit policies, but this is counterbalanced by the idea of creating very context-specific Kanban systems, perhaps just for a season.  What could be more explicit than a specific process made visual?

So we know that Kanban scales down nicely; what about scaling it up?

This question is often taken to refer to things like the Kanban equivalents of “Scrum of Scrums”. Some organisations have replicated these with success, but to focus mainly on the mechanics would be an example of thinking at the level of sticky note commandments.

Instead: How might we visualise and manage flow across a whole business value stream of which software development is just a component?  At portfolio level, what could it mean to limit WIP and what kinds of effects might we expect to see?  These are great questions; to ask them as an act of deliberate change leadership is to start applying Kanban at scale, beginning a journey towards a Lean organisation.

So yes, Kanban scales. Not by adding layers of complexity as we scale up, but because the foundational principles and core practices aren’t actually very sensitive to scale.  Some might call that cheating!

[1] See http://finance.groups.yahoo.com/group/kanbandev/

[2] The back of my business card (see http://yfrog.com/hs7wx0j) has the pithier “Make work visible” and the Personal Kanban book says “Visualise work”. Both are fine I think.

September 2, 2011


Filed under: Kanban,lean,Portfolio — Tags: , , , , , — Mike @ 9:56 am

A busy few weeks ahead:

  1. Sept 21: Limited WIP Society Manchester, Manchester, England
  2. Sept 29-30: Pre-conference Kanban tutorial at Agile Cambridge, Cambridge, England
  3. Oct 3-4: Lean & Kanban Benelux (LKBE 2011), Stuurboord, Antwerp, Belgium
  4. Oct 17-19: Lean & Kanban Central Europe (LKCE 2011), Munich, Germany
  5. Oct 30-Nov 2: Conference on Lean Enterprise Software and Systems (LESS 2011), Stockholm, Sweden

I have good reason reason to be excited about all of these:

Manchester is the closest big city to my home since I moved away from London in 2009; props to Ian for getting this meetup up and running.  While we here, I must mention Zsolt and the Budapest meetup that I attended this week.

The Kanban tutorial in Cambridge with David Anderson kick-starts what we hope will be become a regular training offering in the UK.  And yes, I’m an associate, currently the only one based in the UK.

I look forward to LKBE and LKCE not just as speaking opportunities but as the chance to catch up with some of the people who have challenged and inspired my thinking over the past couple of years.

LESS is where we reach out and learn from other communities and disciplines.  And I can’t wait to return to Sweden – I just wish I had held on to more of my childhood Swedish!

Anyway… I hope to see you at one or more of these great events.  Look me up!

August 16, 2011

“Influencer”, or Kanban and models for change

Consider this progression:

  1. Operating a development process, using Kanban as a visualisation and scheduling tool
  2. Continuously improving a development process, using Kanban to manage flow locally
  3. Relentlessly tackling root causes that lie outside the scope of the development process of #1 and #2, driven by the latter to improve flow end-to-end
  4. As needed, designing and implementing radical change at the levels of #1-3, driven by #3 to improve flow for multiple value streams
  5. Embedding a change management and improvement process/mindset that sustains #1-4 for the long term

Kanban implementations led by people who understand its principles will set out to do #1 and #2 together, though one might hope that #2 will follow from #1 even in a “cargo cult” implementation.  #3 and #4 become natural as peer teams in increasing numbers surface the same issues and learn to collaborate on their solution; #5 then becomes implicit, perhaps manifested explicitly in support structures.

Bottom-up progressions like these have a lot going for them:

  • They can be started by anyone, pretty much anywhere
  • They’re not disruptive initially (but don’t rule out later disruption)
  • Judicious reading, training, coaching and mentoring can speed the process

But (and the answers to these will vary by organisation):

  • What exactly are we trying to achieve?  How will we know that we’re on the right track?
  • From where will come the support necessary for success in #3-5?  What’s to stop the whole thing from hitting a ceiling of organisational indifference or fizzling out, failing even to sustain #1-2?
  • How long should it take?

I’m a bit skeptical when it comes to top-down initiatives too, so what’s the alternative?

Back in April I mentioned Crucial Conversations by Patterson, Grenny, McMillan & Switzler in my post Crucial Conversations, Respect and Kanban.  I went on to read Influencer (their book on influencing change) and am now getting stuck into Crucial Confrontations by the same authors.

“Influencer” is about influencing and leading change.  I like this book a lot; it appeals to me as a Systems Thinker and it has the most teachable model for organisational change I have yet come across.  I hope I don’t do the authors a disservice by presenting it thus:

PERSONAL Make the undesirable desirable Surpass your limits
SOCIAL Harness peer pressure Find strength in numbers
STRUCTURAL Design rewards and demand accountability Change the environment

If you can’t remember the content of the boxes you can still remember to ask “why change?” and “how?” at each of the levels of Personal (e.g. you and your peers), Social (e.g. team) and Structural (bigger picture stuff, e.g. organisation, process-wise).  These are good questions to ask also of your development system and each of the systems that surround it – see my recent post on portfolio management for an example of a surrounding system.

This “everywhere out” approach may look daunting, but the trick is to look ahead, to try to pre-empt impediments to change and to identify leverage points, i.e. those places where just a little effort (e.g. policy adjustments, better articulated goals) might unleash significant changes in outlook and behaviour.  Examples could include lead time as an organisation-wide improvement focus, with (say) inventory limits as a policy lever and the availablity of Kanban training as an enabler.  Collectively, these hit most of the boxes above.

None of this is to rule out bottom-up approaches, since a growing number of positive examples (“bright spots”) are key to success in that Social level, and the stronger your base of social capital, the easier it will be to engage at the Structural level.  But let us draw some “meta advice” from the “Influencer” framework: take the trouble to understand how change works, in theory, in your organisation and in organisations similar to yours.  Look for those bright spots!

August 4, 2011

Kanban in its portfolio context (idea for LESS 2011)

Much as I love hands-on development, I can’t help but bring a manager’s perspective to Kanban.  When I see situations suffering with the all-too-common “massive WIP” problem (usually coupled with slow delivery and shared bottlenecks), my attention turns very quickly from team level to the management support systems that are failing to bring high level control to the overall burden of work that teams are expected to deal with.

Hence a growing interest in the field of portfolio management.  It’s not that large organisations don’t have the systems (I’ve had to provide data to enough of them!), it just seems that they’re so focussed on accounting for the past that they have little influence on future delivery.

Here are just some of the things that I believe a good portfolio management system should offer, and some pointers to how they might be turned into levers for improvement.

Point-in-time financial measures

1. “Inventory”: Money spent on work that has not yet been released.  Accountants might call this “Work in progress” (WIP) instead, but to the Kanban community this refers to the number of items under development.

2. “Required” (my word, perhaps there’s a accepted term): Further money to be spent before work currently in progress will generate value to the business.  Inventory + Required make up the total expected cost of building and releasing something.

These are point-in-time measures that can be trended over time and projected into the future.

Central to Lean and Kanban is the belief that managing down inventory (whether measured in items or in money terms) goes hand-in-hand with improving flow, and from improved flow we should expect to see growth in business capability and value.

But money spent stays spent. The only way to reduce inventory in the short term is to make releases, which means spending yet more money! The key to reducing inventory in the longer term is to plan (or replan) to release more incrementally, reflected in reductions in the “Required” measure.  Implicitly or explicitly, to achieve this across the board requires changes in policy (e.g. limits, risk appetite) &/or practice (e.g. how work is structured).

Rate-based financial measures

3. “Burn Rate”: How much money spent per month on the project or portfolio in question.

4. “Throughput” (again, there may be a better word for it): Completed work released (out of inventory) per month.

Like the point-in-time measures, these can be trended over time and projected into the future.

A gap between current burn rates and projected burn rates could be a sign of trouble, though the direction of the gap is crucial.  If to meet our commitments we must spend at a rate significantly greater than our current capability (i.e. because we can’t ramp up quickly enough), we have an overcommitment problem.  If the gap is in the other direction, it means we’ve kept out options open, a good thing so long as the result isn’t needless starvation caused by a lack of preparation.

Assuming that all projects survive until completion, the long term averages of throughput and burn rate will be equal.  High month-by-month variability of throughput could however be seen as an indication of the lack of flow.  It could even be an impediment in itself if (say) a business function is to be impacted with a short-term rate of change that it is unable or unwilling to sustain.

Non-financial measures

5. Headcount: Self-explanatory, often tracked alongside financial measures.  Ramping headcount up or down can be painful (and I say that from the heart!).

6. Work items: Features etc as managed in Kanban systems.  Slightly problematic though – whilst it clearly makes sense to track features at project level, can we be sure at portfolio level that one project’s work items (let alone their states) are comparable with another’s?  Although they don’t flow very fast, projects can of course be treated as work items too (and worth limiting in number as well as financially).

7. Lead times: How long projects take, based on actuals from completed projects, planned dates, or estimates based on budgets and burn rates.  It hardly needs to be said that shorter is generally better.

Reporting dimensions

8. Initiatives: The “why” behind the work; used as a reporting dimension it shows how effort aligns to strategy. Too many of these may indicate a lack of focus or alignment.

9. Organisation/sponsor/funding source/customer/market segment: Dimensions based on by whom and for whom work is done

10. Classes of service: see some of my previous articles.  See that we’re investing sustainably and that our development systems are robust.

Where next

I’m considering attending the LESS 2011 conference in Stockholm in late October.  What would absolutely make me go is the thought of exploring the boundaries between Kanban and surrounding systems (portfolio management and other existing support systems that might be turned to create “pull” for positive change) with like-minded people active collectively across these diverse areas (quoting the conference website):

  • Lean and Agile Product Development
  • Complexity and Systems Thinking
  • Beyond Budgeting
  • Transforming Organizations

But I can’t make this happen on my own.  Who else would be up for it?

Or you may have a portfolio problem (perhaps a “massive WIP” problem) of your own.  Get in touch!

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