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Complex creative knowledge worker environments require adaptive management solutions such as the Kanban Method. The psychology and sociology of people involved means that prescriptive solutions to process definitions and organizational performance will meet with resistance and the outcomes are unreliable.
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Lean Agile ScotlandEdinburghSeptember 2012
David J. AndersonDavid J. Anderson & Associates, Inc.
[email protected] @agilemanager
Individually Smart, Collectively Stupid
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2001Agile Manifesto
Division 3 is attracting a lot more interest this season!
It’s not rational, man!
Adam Smith
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So was sending Rangers to Division 3, an act of collective stupidity?
An act of spiteful schadenfreude (taking pleasure from the misfortunes of others).
Is it irrational economically, serving no other purpose
than providing that feel good factor from gloating over the football results every weekend for the
next 3 years?
I don't think so!
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What’s happening to Rangers is tribal & emotional!
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Stack …
To understand how to be collectively smart, we must understand tribal, social behavior. Tribal behavior in the workplace can affect performance and make us look collectively stupid.
but more about tribes later...
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Delays
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Collective stupidity manifests in poorflow efficiency
The first Kanban implementation at Microsoft exhibited 8% flow efficiency initially.
Hakan Forss, a consultant from Sweden reports clients typically exhibit < 5% flow efficiency
My personal experience is 5% - 15% before any improvement initiative is started
time
work
delay
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Flow Efficiency in manufacturing industries can be >70% often >90%
Manufacturing workers appear to be collectively smart!
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Why is it important to improve Flow Efficiency and eliminate delay?
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Little’s Law
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Little’s Law
Completion Rate
Lead Time
WIP=
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Easily validated by visual inspection of a cumulative flow diagram
Device Management Ike II Cumulative Flow
020406080
100120140160180200220240
Time
Fe
atu
res
Inventory Started Designed Coded Complete
WIP
Avg. Lead Time
Avg. Comp Rate
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Little’s Law
Completion Rate
Lead Time
WIP=
We observe that as lead times increases due to delay, we tend to increase WIP in order to have a steady flow of delivery.
We keep starting stuff!
More WIP tends to cause longer leads times due to multi-tasking and quality issues.
We start more stuff!
Vicious cycle can spiral out of control!
…we increase this…to maintain this,…
As this increases,…
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In 2005, HP printer firmware division in Boise, Idaho discovered they had 4.5 years of WIP!!!
This was invisible until they plotted a CFD based on data from their development tracking system
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Induced Work
the longer the delay to fix a defect, the longer it takes to fix
The longer the delays in designing something the more likelihood of defects. This has been observed to be non-linear.
time
Defectrate
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Eventually, these effects combine to slow the delivery rate to a trickle while large quantities
of work remain in progress
And finally we stop starting stuff! But we still can't finish our work-in-
progress
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Cost of Delay
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Long lead times add risk and cost. The future is uncertain and faster delivery gives us greater
certainty of the utility of what we delivering. Note the use of the word "utility" from economics and
not "value". Utility isn't always a tangible monetary value. It merely implies usefulness that
didn't previously exist.
The longer it takes to deliver something the less certain we can be about its utility. There is an
opportunity cost of delay - the risk adjusted utility of what we are building.
So faster delivery gives us more certainty and is likely to deliver greater utility.
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Stack…
1. Tribal Behavior isn't rational (as Adam Smith defined it)
2. If we are to be collectively smart we must address causes of delay
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Lean
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How does Lean improve Flow Efficiency?
Optimize the whole!
Use a Systems Thinking approach!
To understand this, let’s meet some well known Scottish systems thinkers…
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Graeme Obree
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Alex Ferguson
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So Lean typically employs a system thinking designer like Graeme Obree or Alex Ferguson. The designer designs a new system to optimize
the whole and eliminate the waste.
But how well does this scale?
Obree is a craftsman working empirically on a small scale with few or any collaborators
Ferguson is arguably a (benevolent) dictator of a small to medium sized enterprise
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Lean text books will tell you to "map the value-stream." In knowledge work, we tend to use an
older term "workflow" as the metaphor of a stream implies a single direction and knowledge work
flows tend to be complex and involve loops.
So we should "Map the Workflow".
This gives us a definition of our current process.
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How does Lean improve Flow Efficiency?
Optimize the whole!
Use a Systems Thinking approach!
Identify wasteful, delaying activities and eliminate them
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For knowledge work, this means identifying all the delays and in turn the causes of delay, and then
designing them out of our future process.
So Lean employs a system thinking designer to design out causes of delay and define our new
process.
The Lean consultant will then plan and manage the transition from the old process to the new
process.
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So let's take a look at how an experienced and successful coach introduced a number of famous
Scots to their new future state process…
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[Video clip from Damned United]
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The team may not always accept the proposed new process definition (or the designers opinion)!
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Stack…
1. Tribal Behavior isn't rational (as Adam Smith defined it)
2. If we are to be collectively smart we must address causes of delay
3. People (often) resist defined & managed change for emotional reasons
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Self-organization
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So, if people will resist being told what to do, or perhaps our grand system designer can't get it
right all of the time, …
the Agile community argues that we should allow individuals to self-organize to produce the best outcome - it's written into the Principles behind
the Agile Manifesto.
The father of self-organization is, of course, a Scotsman...
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Adam Smith’s Invisible Hand
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Smith believed that all we required was to construct a set of rational incentives to guide
individual behavior and markets would self-organize around optimal, efficient solutions.
Loosely regulated markets would produce the optimal system outcome as each individual would
act in his/her own best interests.
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Couple this with Cartesian decomposition and it was inevitable that the Scottish-French version of the Renaissance would deliver us to Taylorism and the invention of another great Scotsman,
Renee Descartes
Fredrick Taylor
Donaldson Brown, CFO at GM, cost accounting.
If we were to optimize the whole, all we needed to do was optimize the parts by asking each to act rationally.
Donaldson Brown
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Unfortunately, it is this line of thinking that caused the need for a Lean revolution.
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In recent times, the Internet has enabled and encouraged self-organization on a massive scale.
But the best of these, such as the open source software development communities like Linux, do
not survive without a benevolent dictator. The Invisible Hand is indeed very visible and attached
to a human leader.
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We might conclude from this that self-organization of large systems of humans is
challenging.
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The alternative to Smith's Invisible Hand
was constructed by an
Englishman - Thomas Hobbes and his
Leviathan
The concept is simple - the people cannot be
trusted to act rationally (ethically or morally)
and hence must be controlled
through command and the rule of law.
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It was an English version of the Renaissance that gave us socialist 5 year plans and command and control structures in corporations - albeit a Frenchman, Henri Fayol, who documented it as an approach to management around the turn of the 20th Century.
Henri Fayol
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Now in the 21st Century, we are aware that both of these extremes don't work. The command and control Leviathan with its designed outcomes and 5 year master plans have been shown to fail us.
Equally, we suffer at the Invisible Hand that supposedly guided the markets to act rationally
and optimize the outcome.
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Men (and women) don't act rationally. Modern knowledge workers will not be
commanded and controlled.
And those that would command and control are often working with
flawed plans and designs built on
incomplete models and false
assumptions.
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Stack…
1. Tribal Behavior isn't rational (as Adam Smith defined it)
2. If we are to be collectively smart we must address causes of delay
3. People (often) resist defined & managed change for emotional reasons
4. After 250 years of the Leviathan & the Invisible Hand, we need a new philosophy to guide the organization of human activity in the 21st Century
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Complexity
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So why didn’t Mark Cavendish win Gold at the Olympics?...
Mark Cavendish
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[video clip of Mark Cavendish]
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The point of this story is that the obvious script based on observed team capabilities didn't play
out because of the psychology of the people involved and pre-race events that changed
perception. Had Cavendish not won the final stage of the Tour De France so convincingly, he
may indeed be the Olympic champion today.
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The British, the Germans and the Australians were "all-in" with their strategy of a sprint finish
with their top sprinter taking the Gold. They lacked adaptability and despite this lack of
adaptability they also lacked the ability to collaborate in order for their strategy to have a
chance. They were collectively stupid and sprinted for 17th place to save face.
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Risk(or, the future is uncertain)
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Risk is the idea that things may not
work out exactly as we would like them to. If we wanted to
measure risk it is the chance and the
magnitude of an actual outcome
being different from our intended
outcome.
Managing risk is the science of minimizing the difference between a desired outcome and an actual outcome
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The British, Australian and German cycling teams failed to manage their risk appropriately. The
complexity of the situation meant that effective risk management required collaboration that did
not emerge.
If we ran the race over again, the outcome would be different, as the starting psychological starting
conditions would be different.
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Stack…
1. Tribal Behavior isn't rational (as Adam Smith defined it)
2. If we are to be collectively smart we must address causes of delay
3. People (often) resist defined & managed change for emotional reasons
4. After 250 years of the Leviathan & the Invisible Hand, we need a new philosophy to guide the organization of human activity in the 21st Century
5. Human collaboration creates complexity from psychological and sociological influences. Results will change based on the starting conditions, all other things being equal
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Risk in Knowledge Work
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Unlike manufacturing industry, we often don't know exactly what benefit will be derived from a
piece of software. It is almost impossible to determine what a feature or function might be
worth. Individually, one might be worthless, but combined with others it will have some utility but precisely how much? This can generally only be
determined retrospectively.
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As a result, we can't know with certainty which ideas for features and functions will produce the
greatest utility. Our reaction to this is to hedge our bets by working on more than one at a time.
Hence, due to the nature of knowledge work, multi-tasking is inevitable. It is the economically
smart thing to do.
It turns out, some multi-tasking isn't stupid at all, it's smart. Multi-tasking helps us mitigate risk. Multi-tasking buys us options. Options have value
in the face of uncertainty.
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But multi-tasking means things take longer, and longer is likely to affect quality, and incur a cost of
delay. So there is a conflict!
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This should immediately make you think there is an optimization problem here. What is the
optimum amount of multi-tasking (or additional work-in-progress) to mitigate the uncertainty of the future while providing the shortest possible
lead times to maximize the utility of the work-in-progress?
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The truth is there is unlikely to be a recipe for this. The answer will be situational and context
specific. As we can only have perfect knowledge from hindsight, the nature of this problem, means it is unlikely we can design a process to produce
an optimal outcome.
The GB Cycling team showed us this dramatically during the Olympics.
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Instead we want our system to be adaptive and for it to evolve to produce the fittest possible
process given current circumstances. And should circumstances change, for that evolutionary
capability to be inherent to our system so that it can adapt again and again, optimizing the whole
around the current economic challenges of our business and the risks we are managing.
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Stack…
1. Tribal Behavior isn't rational (as Adam Smith defined it)
2. If we are to be collectively smart we must address causes of delay
3. People (often) resist defined & managed change for emotional reasons
4. After 250 years of the Leviathan & the Invisible Hand, we need a new philosophy to guide the organization of human activity in the 21st Century
5. Human collaboration creates complexity from psychological and sociological influences. Results will change based on the starting conditions, all other things being equal
6. To cope adequately with complexity and risk we need a system that is adaptive and has an inherent evolutionary capability
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Introduction to Kanban
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Kanban systems model workflow and limit WIP at each step, signaling available capacity, effectively creating a pull
system for work orders. First used at Microsoft in 2005
White boards were introduced in 2007 to visualize workflow, signal capacity and show work orders flowing
through the system
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Boards typically visualize a workflow as columns (input) left to (output) right
Pull
Flow – from Engineering Ready to Release Ready
WIP Limit – regulates work at each stage in the process
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Tickets on the board are “committed”Backlog items remain “options”
Kanban systems defer commitment & enable dynamic prioritization when “pull” is signaled
5 4 43 2 2
Flow
InputQueue
DevReady In Prog Done
BuildReady
Test ReleaseReady
Stage Prod.DoneIn Prog
DevelopmentAnalysis
Commitment point
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Tickets on the board are committed. Items in the backlog are merely options
5 4 43 2 2
InputQueue
DevReady In Prog Done
BuildReady
Test ReleaseReady
Stage Prod.DoneIn Prog
DevelopmentAnalysis
Pink tickets show blocking issues
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Pull criteria policies encourage a focus on quality & progress with imperfect information
5 4 43 2 2
InputQueue
DevReady In Prog Done
BuildReady
Test ReleaseReady
Stage Prod.DoneIn Prog
DevelopmentAnalysis
Policies~~~~~~~ ~ ~ ~
Policies~~~~~~~ ~ ~ ~
Policies~~~~~~~ ~ ~ ~
Policies~~~~~~~ ~ ~ ~
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Cost of delay function sketches provide a qualitative taxonomy to delineate
classes of risk
Expedite – white; critical and immediate cost of delay; can exceed other kanban limit (bumps other work); 1st priority - limit 1
Fixed date – orange; cost of delay goes up significantly after deadline; Start early enough & dynamically prioritize to insure on-time delivery
Standard - yellow; cost of delay is shallow but accelerates before leveling out; provide a reasonable lead-time expectation
Intangible – blue; cost of delay is not incurred until significantly later; important but lowest priority
time
impa
ct
time
time
time
impa
ctim
pact
impa
ctColour Function
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Allocate capacity across classes of service mapped against demand
5 4 43 2 2= 20 total
Allocation
10 = 50%
+1 = +5%
4 = 20%
6 = 30%
InputQueue
DevReady In Prog DoneDoneIn Prog
DevelopmentAnalysis BuildReady Test
ReleaseReady
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Benefits of a Kanban System
There are predictable benefits from the merely complicated, mechanical nature of the system...
Deferred Commitment Reduced & more predictable lead times Improved quality from removing
overburdening Improved quality due to focus Controlled quality due to explicit policies
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The Kanban Method
What I didn’t predict was that kanban systems, coupled with visualization would create a positive tension catalyzing process evolution
Seeing (lack of) flow, understanding system level effects, enabled improvements in small evolutionary steps
While kanban systems dealt with merely complicated system dynamics, they enabled an evolutionary response to complex problems
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Definition ofThe Kanban Method
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Foundational Principles
1. Start with what you do now
2. Agree to pursue incremental, evolutionary change
3. Initially, respect current roles, responsibilities & job titles
4. Encourage acts of leadership at all levels in your organization
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Kanban in Action tried to visually capture the principles
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Core practices to enable evolutionary capability
1. Visualize
2. Limit Work-in-Progress
3. Manage Flow
4. Make Policies Explicit
5. Implement Feedback Loops
6. Improve Collaboratively(using models & scientific method)
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1. Understand Sources of Dissatisfaction From viewpoint of internal & external stakeholders Source of variability that cause dissatisfaction
2. Demand and Capability Analysis (Ideally) By work item type & class of service
3. Risk Analysis Identify dimensions to manage & taxonomies
4. Model Workflow Understand the knowledge discovery process by type
5. Kanban System Design
6. Visualization
7. Roll out Plan Negotiation & shuttle diplomacy
System Thinking Approach to Introducing Kanban
This process tends to be iterative
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Philosophy BehindThe Kanban Method
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People resist change for emotional reasons. If resistance wasn't emotional, the logical,
reasoning part of the brain could be persuaded with rational argument showing improved
economics or risk management.
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Emotional reasoning, in this sense, means the older parts of our brain that process sensory
information and match patterns rather than the more recent, in evolutionary terms, logical
reasoning part of our brains.
The mistake is to assume humans behave based on logical reasoning. They don't when there is a dissonance between the newer logical, thinking
part of our brain and our older, sensory, emotional brain, the emotional part always wins.
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There is a psychological and sociological component to resistance to change:
The psychology of the individual ego, self-image and how they derive self-esteem.
The sociology of the workplace tribe, an individuals position in the tribal hierarchy, how they are respected and valued within the tribe,
and the tribes own self-image and how it derives its tribal pride and sense of worth.
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When a change is perceived to threaten the individual’s sense of self or the tribe then it will be
resisted.
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Kanban embraces the Zen influenced philosophy of Bruce Lee. Kanban should be like water! It
should flow around the rock! The rock is emotional resistance to change.
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Initial Kanban implementations should be designed to avoid emotional resistance by
anticipating the self-image, and tribal memberships of the individuals
involved. Kanban implementers predict how self-esteem and tribal worth are derived and avoid
changing mechanisms that are core to the psychology and sociology of the individuals
involved in the change.
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The systems thinking approach to introducing Kanban is designed to identify what can be
improved. The implementation should then be designed to introduce only the changes that will not meet with initial resistance while highlighting
and raising awareness of possible future improvements.
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How many psychologists does it take to change a lightbulb?
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Kanban's visual, tactile and collaborative nature acts to move the participants to conclude for themselves that changes need to be made!
The lightbulb decides to change itself!
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There are no teams or organizational structures defined in Kanban. Keeping existing
organizational structures avoids emotional resistance.
Changes to roles, team and organization structures must be self-motivated. Roles and
organizational structures must evolve.
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It turns out that the initial implementation of the kanban (pull) system can often be argued
logically because it does not invoke an emotional reaction.
Kanban does not threaten the self-image of individuals or the tribes they are members of.
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As a result many of the predictable benefits from the mechanical side of implementing a kanban
system are easily realized.
Predictability improvesLead times are reduced
Quality improves
But often it is not enough. To cope with the uncertainties of demand and future risks, the
organization needs a capability to evolve.
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Kanban is not a software development lifecycle or project management process. It is a method for creating institutional evolutionary capability.
WIP limits and visualization and a focus on flow provide the tension to catalyze discussion of
improvement. Hence the cartoon on the cover of the book!
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Conclusions
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And so, to pop some things from our stack…
Kanban is an approach to institutional evolutionary capability. This enables an organization to better cope with complexity.
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And so, to pop some things from our stack…
Kanban is an approach to institutional evolutionary capability. This enables an organization to better cope with complexity
Whether a new method or process will be embraced and implemented successfully depends a lot on the starting conditions, and the psychological and sociological elements in play - just like planning to win the Gold medal in the Men's Road Race! As a result, every implementation has to be unique and the results from one implementation cannot fully predict the outcome elsewhere
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And so, to pop some things from our stack…
Whether a new method or process will be embraced and implemented successfully depends a lot on the starting conditions, and the psychological and sociological elements in play - just like planning to win the Gold medal in the Men's Road Race! As a result, every implementation has to be unique and the results from one implementation cannot fully predict the outcome elsewhere
The field of Behavioral Economics is emerging to incorporate human psychology (neuropsychology) and sociology into our models for economic behavior
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And so, to pop some things from our stack…
The field of Behavioral Economics is emerging to incorporate human psychology (neuropsychology) and sociology into our models for economic behavior
Defined and managed change on a large scale doesn't work because the people involved resist the changes. Change must be self-motivated and the organization must be willing to experiment, mutate and evolve to cope with changes in the market and the economic environment.
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And so, to pop some things from our stack… Defined and managed change on a large scale doesn't work
because the people involved resist the changes. Change must be self-motivated and the organization must be willing to experiment, mutate and evolve to cope with changes in the market and the economic environment.
We need a new philosophy to guide how we organize for the 21st Century economy. The dichotomy of the Invisible Hand versus the Leviathan no longer serves us well. Self-organization requires leadership and a guiding light by which to steer it. Controls need to define clear boundaries and be neatly aligned to the risks we are managing. Both the True North that guides self-organization and the rules that define the boundaries of empowerment must be capable of evolving as conditions change.
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How to be Collectively Smart?
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Waste has to be eliminated by a self-aware system that mutates and evolves using models to
guide changes
gradually improving
shortening lead timesimproving flow efficiencyminimizing cost of delayand managing business risk better.
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The guiding light is faster delivery of work to produce the better economic results at a
sustainable pace. We must visualize key risks such as cost of delay, customers to be served
and the quantity and nature of their demand
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An institutional capability to reflect and adapt needs to be present and we need leadership that
is tolerant to failure and encourages experimentation.
Our organization should be constantly adapting and evolving. In doing so waste will be eliminated
– not through grand design & managed change
- but incrementally through evolutionary adaptation
- self-motivated change, led from within and implemented without resistance.
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A Decade of Influences Published June 2012
115,000 words of anecdotes explaining
my approach to leadership, management & change
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Kanban Method Explained
Published April 2010
A 72,000 wordintro to the topic
http://www.limitedwipsociety.org
Yahoo! Groups: kanbandev
Yahoo! Groups: kanbanops
http://leankanbanuniversity.com
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About…David Anderson is a thought leader in managing effective software teams. He leads a consulting, training, publishing and event planning business dedicated to developing, promoting and implementing sustainable evolutionary approaches for management of knowledge workers.
He has 30 years experience in the high technology industry starting with computer games in the early 1980’s. He has led software teams delivering superior productivity and quality using innovative methods at large companies such as Sprint and Motorola.
David is the author of three books. The latest is Lessons in Agile Management – on the Road to Kanban. 2010 saw publication of the best selling Kanban – Successful Evolutionary Change for your Technology Business.
David is a founder of the Lean Kanban University, a business dedicated to assuring quality training in Lean and Kanban for knowledge work throughout the world.
http://leankanbanuniversity.comEmail: [email protected] Twitter: agilemanager
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Germanpublished January, 2011
Translation byArne Roock & Henning Wolf
of IT-Agile
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Spanishpublished May 2011
Translated byMasa K Maeda, PhD
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@agilemanager
IsraelAmdocsAnswers.comTypeMock
AustraliaLonely PlanetTelstra
New ZealandMinistry of Social Development
BrazilPetrobrasCESARPhidelilsO Globo
ArgentinaHuddleThomson-Reuters
Kanban System Adoption Examples GloballyUSAMcKessonVanguardGoDaddyXboxMotley FoolCityGrid MediaUltimate SoftwareConstant ContactSEPREIRobert Bosch
UKBBCIPC MediaFinancial TimesMicrosoft
ScandinaviaUnibetVolvoSkaniaSpotifyEricsson
Mainland EUUbuntuXingBWinASRBBVA
China & HKThomson-ReutersNike
ChileLAN
Lean
Agile
Scotla
nd
@agilemanager
Kanban System Adoption by Industry
Media Includes BBC, Sky, Lonely Planet, Time/Life, IPC,
Mobile.de, O Globo, Financial Times, NBC Universal, Thomson-Reuters
Games Mostly small studios includes video arcade thru
mobile games to online gambling such as Unibet & Bwin
Manufacturing Includes Robert Bosch, Volvo, Skania, Petrobras, Nike
Finance & Insurance Vanguard, Motley Fool, Chase, ASR
Software & Telecoms Amdocs, Ultimate, Constant Contact, Phidelis, SEP,
Huddle, CESAR, Ubuntu Public Sector
Ministry of Defence (Denmark), Ministry of Social Development (New Zealand)
