Deliver Value:Lean-Kanban for Portfolio Prioritization

Deliver Value: Lean Kanban
for Portfolio Prioritization
Ram Srinivasan
Lean - Agile Coach and Trainer
http://linkedin.com/in/ramvasan
@ramvasan

I Help Clients with Product Discovery, Product
Management, Portfolio Alignment, Process
Consulting, and Organizational Coaching

What is Portfolio Planning?
Image Source:http://www.innolution.com/resources/visual-agilexicon

Challenges in Portfolio Management
● Firefighting - reactive execution
● Unstable, unclear, incomplete requirements
● Insufficient alignment and coordination of extended
enterprise
● Processes are locally optimized and not integrated for
the entire enterprise
● Unclear roles, responsibilities and accountability
● Mismanagement team competency and knowledge
● Insufficient planning
● Improper metrics, metric systems and KPIs
● Lack of proactive risk management
● Poor acquisition and contracting practices

System Thinking Perspective
Insufficient
Planning
Improper metrics, metric
systems and KPIs
Insufficient Alignment
and Coordination of the
Enterprise
Mismanagement of
Competency and
knowledge
Unclear Roles,
Responsibilities and
Accountability
Poor Acquisition and
Contracting Practices
Unstable, Unclear
and Incomplete
Requirements
Lack of Proactive
Risk Management
Process Locally
Optimized and
Not Integrated
Firefighting

Dave Snowden's Cynefin Framework
Disorder

Project Type Characteristics Leader’s Job
Chaotic
High Turbulence
No clear cause and effect
Unknowables
Many decisions and no time
Immediate action to reestablish order
Prioritize and select actionable work
Look for what works than perfection
Act, Sense, Respond
Complex
More unpredictability than predictability
Emergent answers
Many Competing Ideas
Create bounded environment for action
Increase interaction and communication
Servant leadership
Generate ideas
Probe, Sense, Respond
Complicated
More predictability than unpredictability
Fact based management
Experts work out wrinkles
Utilize experts to gain insights
Utilize metrics to gain control
Sense, Analyze, Respond
Simple
Repeating patterns, consistent events
Clear cause and effect
Well established knowns
Fact based management
Use best practices
Extensive communication not necessary
Establish patterns, optimize them
Command and Control
Source: “Leadership framework for Decision Making” - Snowden and Boone, HBR 2008
Managing Complexity - Leader’s Job

Deliver Value: Understand Principles
Give a man a fish and you feed him for a day.
Teach a man to fish and you feed him for a lifetime.

Lean Thinking - Principles
● Optimize the Whole
● Focus on Customer
● Energize Workers
● Eliminate Waste
● Learn First, Decide Last
● Deliver Fast
● Build Quality In
● Keep Getting Better

Kanban Method
● Visualize Work
● Limit Work in Progress
● Measure and Manage Flow
● Make Process Policies
Explicit
● Implement feedback loop
● Improve collaboratively,
evolve experimentally

Optimize the Whole - Value Stream Maps
References: http://leadinganswers.typepad.com/leading_answers/2011/09/pmi-acp-value-stream-mapping.html
http://www.rmcproject.com/pmi-acp/pdfs/PMI-ACP%20Chapter%203.pdf

Three Projects, Three Experiments !!!
Project 1: 1, 2, 3, …. 30
Project 2: a, b, c, d, ….Z
Project 3: 2, 4, 6, ….54

Question to Ponder Over...
If the cost of execution per unit time (day,
week) is the same, what would stakeholders
prefer?
A. Shorter Cycle Time - 40% utilization,
working one project at a time, projects
delivered in a shorter time, one after
another?
B. Higher Utilization - 95% utilization,
working on multiple projects at a time and
projects taking longer to complete?

Lean Thinking - Wastes
● Overproduction of Information
● Waiting
● Unnecessary Movement of Information
● Over-Processing of Information
● Inventory of Information
● Unnecessary Movement of People
● Rework, Defects
● Loss of Tactical Knowledge/Skills

Portfolio Planning Strategy
Image Source: http://www.innolution.com/resources/visual-agilexicon

How Should We Compare Variables?

WSJF based on CoD and Duration
Project Duration Cost of Delay(CoD) Weight = CoD/Duration
1 1 10 10
2 3 3 1
3 10 1 0.1

Estimate with Relative Sizes
100%
50%
0%
Effort
ReturnsonEffortInvested
XS S M L XL XXL

Economic Filters
Image Source: http://www.innolution.com/resources/visual-agilexicon

Manage Project Arrival and Departure Rates

Class of Service- Policies & Capacity
Analysis Planned In Progress Deployed
Expedite Standard Fixed Date

Embracing Emergent Opportunities

Smaller Projects, Frequent Releases

Limit WIP - Focus on Throughput
(Not Utilization)

Cycle Time as a Function of
Utilization and Batch Size
Trashing
{
{
High Performing Teams
Reference: Lean Software Development by Mary and Tom Poppendieck

Complete Engaged Teams With
Multi-Skilled Team Members
Maximize flow & Value Delivery - Long Lived Empowered Cross Functional Feature Teams

Profit vs. Marginal Profit
Reference: The Principles of Product Development Flow by Donald Reinertsen

Marginal Economics - Other Concepts
● Throughput Accounting
■ Increase Throughput, Reduce Inventory, Reduce
Operating Expense
Net Profit (NP) = Throughput – Operating Expense
Return on Investment (ROI) = Net Profit / Investment
TA Productivity = Throughput / Operating Expense
Investment turns (IT) = Throughput / Investment
● Software Capitalization
● Beyond Budgeting
● Ignore Sunk Costs

Portfolio Planning Strategy
Image Source:http://www.innolution.com/resources/visual-agilexicon

email@ramvasan.com
http://ramvasan.com
http://linkedin.com/in/ramvasan
@ramvasan
This work is licensed under a Creative
Commons Attribution-NonCommercial-
ShareAlike 3.0 Unported License.

Deliver Value:Lean-Kanban for Portfolio Prioritization

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