Lean Adaptive Management - Achieving complex business goals with end-to-end flow, tailored project management and organizational maturity - "Some organizations work in a simple, stable business environment with simple, stable and consistent business goals. Other organizations have to deal with a complex, fast changing business environment where business goals may be contingent or even contradictory. In this workshop we explore how our current models for improvement are well equipped for simple and stable business environments but fail to cope with the complexities of today’s fast changing business. We discuss how we need to move beyond the current single- and multi-model improvement theory towards a thorough understanding of complex business challenges and situational improvement based on lean adaptive principles. We discuss the case of a software product company that is faced with complex – and possibly contradictory – business challenges. A previous improvement initiative based on CMMI and Scrum did measurably improve the process of the development group but – as seems to be so often the case - failed to go beyond a local one-shot point improvement: 1) it did not sufficiently involve upstream and downstream stakeholders such as product management and support (and ultimately the customers and users); 2) it did not sufficiently differentiate between different kinds of developments leading to one-size-fits-all processes that actually fit no development very well; 3) it did not provide the insight to take on complex business challenges. In order to tackle the above issues we decided to work on three fronts at the same time: 1. End-to-end flow (lean): Use Kanban to create flow in the end-to-end value stream starting from initial ideas up until actual implementation. The end-to-end-flow takes into account both value discovery (understanding the value) and value delivery (delivering the value). 2. Tailored project management (adaptive): Use a sense-making framework (based on Cynefin) to differentiate between developments where the value is clear enough to go almost directly into value delivery (linear flow), and developments where the value uncertainty mandates iteration between value discovery and value delivery (iterative flow). 3. Organizational maturity (management): Create a continuous improvement culture that works both bottom-up and top-down. Use Kanban to create a continuous improvement and high-maturity culture from the bottom-up. Use CMMI appraisals as a yardstick to measure organizational progress top-down in order to avoid that local improvements get stuck locally. And most of all, use tailored project management to simultaneously manage bottom-up and top-down improvements to match complex business goals.

1. Lean adaptive management Lean & Kanban Benelux 2011 Patrick Steyaert October 2011 Patrick.steyaert@teamprosource.eu Twitter: @PatrickSteyaert

2. Quiz … Further fill in your CEO’s shopping list: Higher quality Higher throughput Shorter lead and cycle times <<fill in>> Lean & Kanban Benelux 2011 2

3. Our purpose is to deliver value Value should at least be understood in the same level of detail as effort and cost* Lean & Kanban Benelux 2011 3 *Freely quoted from “Waltzing With Bears: Managing Risk on Software Projects”, Tom DeMarco & Timothy Lister

4. Scale (in)variance Lean & Kanban Benelux 2011 4 Mathematics Reality

5. Case Developing and delivering software applications in regulated domain Management and development distributed over locations in Europe Part of an international group Leader in an international market Lean & Kanban Benelux 2011 5

6. Complex challenges The organization is faced with complex challenges in its product engineering and development process: delivering on time and with the right quality product development as well as custom projects a complex and changing business domain (many codes and norms) uncertainty about user needs and market opportunities complexities of a function oriented, geographically distributed, organisation (product engineering versus product development) technological complexity substantially re-engineer the product at the same time keep on delivering new functionality at a high pace Lean & Kanban Benelux 2011 6

7. Organization 360° Improvement Case 7 CT1 Management SE SE SE SE CT2 SW development QA CT3 ProductMgmt.

8. The end-to-end value stream Lean & Kanban Benelux 2011 8 Product in use Narratives Models Implemented Condept Requirement Verification Validation Idea Product in development Concepts

9. The end-to-end value stream – in practice Lean & Kanban Benelux 2011 9 Product in use Narratives Models Implemented Condept Requirement Verification Validation Idea Product in development Concepts

11. Limit WIP

12. Manage Flow

13. Make Process Policies Explicit

14. Improve Collaboratively (using models & the scientific method)Product in use Narratives Models Condept Requirement Verification Validation Product in development Concepts

15. Lean & Kanban Benelux 2011 11

16. Source of confusion Lean & Kanban Benelux 2011 12 Run-the-business Change-the-business In an emergent market Value is speculative (large but uncertain) Start with low quality but prepare to grow In the core market Value is clear (smaller but certain) No less than highest quality standards

17. Being on the edge Value maximization Value renewal Lean & Kanban Benelux 2011 13 PDCA OODA

18. value 14 Lean & Kanban Benelux 2011 Extension Return and investment with assessable risk Emergent Large potential (uncertain) return, incremental investment Enhancement Small investment with small return Novel / Sensitive Large upfront investment with uncertain returns www.cognitive-edge.com

19. Different risk profiles Lean & Kanban Benelux 2011 15 Emergent High e.g. novel market Novel Uncertainty about value Extension Enhancement Low e.g. existing market Low e.g. fits within current architecture High e.g. challenges current architecture Uncertainty about capabilities

20. Different challenges 16 Lean & Kanban Benelux 2011 Extension Managing the risk Emergent Cumulate success Enhancement repeated and increasingly efficient delivery of quality Novel / Sensitive Cascading failure www.cognitive-edge.com

21. Challenges for enhancements One routine project does not make a success, it is the repeated and increasingly efficient deliveryof quality that makes a success 17 Lean & Kanban Benelux 2011

22. Challenge for extensions Lean & Kanban Benelux 2011 18 Identifying risk removing risk producing value 18

23. Challenge for emergent projects Creating cumulative success Lean & Kanban Benelux 2011 19

24. Challenge for sensitive projects 20 Lean & Kanban Benelux 2011 Cascading failure

25. Adaptive management Lean & Kanban Benelux 2011 21 Every project is unique … … but some are more unique than others!

26. How do we discover and deliver value? Lean & Kanban Benelux 2011 22

28. Limit WIP

29. Manage Flow

30. Make Process Policies Explicit

32. Ensure minimal options

33. Manage Flow

34. Make Process Policies Explicit

35. Improve Collaboratively (using models & the scientific method)Product in use Narratives Models Condept Requirement Verification Validation Product in development Concepts

36. Linear flow When discovery precedes delivery The user is engaged at the beginning and at the end The needs are discovered at the start and the results of the project are delivered at the end Lean & Kanban Benelux 2011 24 DISCOVERY DELIVERY USER USER

37. Iterative flow When discovery and delivery are intertwined The user is continuously involved in the project The needs are discovered iteratively and project results are also delivered iteratively Risks are managed and benefits are realised incrementally during the project USER Lean & Kanban Benelux 2011 25

38. Lean adaptive management Lean & Kanban Benelux 2011 26 Iterative Level of iteration Emergent Product in use Iterative discovery Extension Product in development Iterative development Enhancement Feature>Feature>Feature Small batch linear Sensitive Narrative>Model>Product Large batch linear Linear

39. How do we organize? Lean & Kanban Benelux 2011 27

40. On the edgeAmbidexterity Project management culture Entrepreneurial culture 28 High maturity culture High reliability culture Lean & Kanban Benelux 2011 www.cognitive-edge.com

41. Lean adaptive management End-to-end flow Create flow in the end-to-end value stream (Delivery + Discovery) Tailored project management Differentiate between the need for linear workflow and iterative workflow Ambidexterity Integrate different cultures in the organization Lean & Kanban Benelux 2011 29

42. Thank You www.teamprosource.eu Do you want to be kept informed? http://www.kanbanforprojects.eu/ Lean & Kanban Benelux 2011 30