Why don’t you try some other dish this time
says my wife to me when we are at the restaurant.
No, I like this one
And why change when I have found something I like?
This is me. I’m very reluctant when it comes to trying out new food or using a new store of any kind. This is also true for technology and development tools. When I find something that I like I tend to stick with it. At the other hand I usually don’t have any problem to adapt to new environments and circumstances. So when I do take the leap and try I seldom regret it and often it turns out to be a new favorite of mine.
Just as it is sometimes hard for me to try a new dish at the restaurant, helping organizations to change is often not easy. When you introduce new ideas and behaviors most people tend to resist just as I do with new food.
For a few years now I have been acting as an Lean and Agile change agent. I have done this both as an employee and as a consultant. I have had my share of successes and failures. When I look back and see what have worked and what has not I have come to the conclusion that it comes down to the size of the proposed change.
The bigger the immediate proposed change the stronger the resistance.
The way I have consistently succeeded in helping organizations change has been by shrinking the change. I break down the change in small, small, non threatening steps.
Well begun is half done.
This is one of my favorite Aristotle quotes. This is also related to shrinking the change. The more time people spend analyzing before they begin doing the greater the resistance becomes. I therefore suggest people to set up the change as a time limited experiment. When the short time limited experiment is over the change will be evaluated. If the change was not to satisfaction the change can easily be reverted, as it was a small change. This shrinks the change even further as people don’t have to analyze everything before they commit. They can try before they buy.
You can find much of this thinking in the great book Switch: How to Change Things When Change Is Hard by Chip and Dan Heath. You will find that shrinking the change is a core part of the Kaizen mindset in Lean. My favorite Lean book on this topic is Mike Rothers book Toyota Kata. The Kanban Method is also all about small evolutionary changes. I guess that is one of the reasons I find it a very useful method of changing and improving knowledge work processes.
I try to incorporate the thinking from the Switch Frame, the two katas from Toyota Kata and The Kanban Method when I act as a change agent. Here is my recipe for successful change when change is hard:
- Shrink the change
- Introduce changes as small time boxed experiments
- Start by doing
Lets change the world one small step at the time!
What is process efficiency Nirvana?
When work flow from process step to process step without any disruption or waiting and people and resources are working at full utilization.
Figure 1. Work is flowing without any waiting and people are busy.
To get to process efficiency Nirvana you have to perfectly balance the process resource efficiency and it’s flow efficiency. You are at 100% resource efficiency and 100% flow efficiency.
Figure 2. Process efficiency Nirvana. 100% resource efficiency and 100% flow efficiency
In this post I will explore these efficiencies and how variation plays an important part in finding this perfect balance. If you manage this efficiency balancing act in your processes you can create a competitive edge.
High resource efficiency is when people and resources are working all the time without any disruptions or waiting.
Figure 3. Work is waiting to be worked on and people are busy.
Running a steel mill is an example of were high resource efficiency is good business strategy. Running a steel mill is very expensive. It is expensive to keep the smelter hot. It is even more expensive to cool it down and then getting it hot again. You are willing to take the economic burden of keeping raw material always on hand to keep the mill busy. You are even willing to finished gods in inventory to keep the mill busy.
Figure 4. Steel mill. An example were high resource efficiency is good business strategy.
Efficient use of people and resources are important. If you are not efficiently using your people and resources you are paying higher salaries than necessary and for equipment that is not being used.
To achieve high resource efficiency you must ensure that the people and resources never run out of work.
A simple and very common way to achieve this is to queue work in front of a process step. With a queue in front variation in the process can be handled and the risk that the people or the resources run out of work is minimized. The down side of queues is that they increase lead time as work waits in the queue (see Little’s Law).
Figure 5. High resource efficiency
High flow efficiency is when work flows from process step to process step without any disruption or waiting. Touch-time is at 100% and waiting time is at zero.
Figure 6. Work is flowing without any waiting and people are waiting for work.
Firefighting is one example where a very high flow efficiency is desired. If your house is on fire you don’t want to wait very long for the fire brigade to arrive and putting out the fire. You want the fire brigade to be instant available. You are even willing to pay for the firefighters to be on standby.
Figure 7. Firefighting. An example were high flow efficiency is good business strategy.
High flow efficiency results in shorter lead times. Short lead times is important as this is your time to market. Short lead times enables you to respond faster to changing market conditions and lower your risks. Shorter lead times is also good for your cash flow as you will decrease the time capital is tied up from order to payment. Shorter lead times also tightens feedback loops and can increase learning.
To achieve high flow efficiency you must ensure that work is never waiting to getting worked on.
Ensuring that work is never waiting means you can’t have work waiting in queues. To ensure that there is no queues you have to have people and resources available as work arrives. You need slack. The big down side of slack is that you are paying for salaries and for equipment that you are not using all the time.
Figure 8. High flow efficiency
Variation in a process effects your ability to reach process Nirvana. The higher the variation the harder it will be to get there.
To get to high resource efficiency you have to guard against arrival time variation. The higher the variation the larger the queues has to be to guard against being depleted. Larger queues will lower your flow efficiency and increase your lead times. The closer to full resource efficiency you are the more the lead times will increase with the variation(see Kingman’s formula).
To get to high flow efficiency you have to guard against arrival rate variation. The higher the variation the more slack you have to have. More slack in the process and you are driving down resource efficiency.
Getting to Nirvana
As you can see having both high resource efficiency and high flow efficiency are often diametrical apposed to each other. If you have any variation in your process you need queues to get high resource efficiency and you can’t have queues if you want high flow efficiency. The higher the variation is in the process the more true this diametrical problem becomes.
How do you then get to Nirvana? Can you even reach Nirvana?
Reaching process Nirvana is hard, very hard, possibly even impossible.
But even if it is impossible, striving for it will pay off. If you can have higher flow and resource efficiency than your competitors you can out perform your competitors. You need to choose a strategy to contain your variation, increase your flow efficiency without lowering your resource efficiency.
One such strategy is Lean. In a future post I will discuss how the Lean strategy strives for the process Nirvana.
Figure 9. Lean – a strategy on the path towards process efficiency Nirvana
I also highly recommend the book “The Principles of Product Development Flow: Second Generation Lean Product Development” by Donald G. Reinertsen
This is my one sentence summary of the Conference Lean Enterprise Software and Systems 2011 (LESS2011).
Start with why, let the adaptive system self organize and have the teams find the answers by them self.
LESS 2011 was the second International Conference on Lean Enterprise Software and Systems (LESS). LESS is a non-profit collaboration between the Lean Software and Systems Consortium and Mälardalen University. This year LESS 2011 was held at Clarion Sign Hotel in Stockholm between 30th October to 2nd November
This year there was four main tracks: Transforming Organizations, Lean and Agile Product Development, Complexity and Systems Thinking and Beyond Budgeting.
My goal was to focus on Complexity and Systems Thinking and Beyond Budgeting.
I was also very much looking forward to hear Steve Denning speak about Radical Management as I, after so many hurdles, was able to bring him to the conference and give everyone a copy of his latest book The Leader’s Guide to Radical Management
Pre Conference Day
This part of the conference had been very poorly announced so we where only four people who turned up but we had some interesting discussions about transforming organizations to a Lean mindset. Thank you Alan Shalloway, Karl Scotland and Frode Odegard
The rest of the day was spent on folding name tags and packing conference bags with Jean Tabaka and Karl Scotland
I started the day by facilitating the LESS 2011 Stockholm Lean Coffee event.
A short introduction by the conference organizers.
This keynote by Bjarte Bogsnes was a well presented keynote with lots of interesting stuff about what Beyond Budgeting is really about. Here is some of my notes.
Bjarte used an interesting metaphor where he compared a cross road with traffic light to a round about.
The traffic light system is often based on historical data and regulated by pre set intervals.
A round about on the other hand is self regulated system based on some simple rules and are regulated based on the current situation.
Beyond Budgeting is event driven model in contrast to traditional calendar based budgeting model. How would you react if your bank would only interact with you during month of the year? What if you had to make all your banking decisions during the month of October? This is more or less what the yearly budget cycle is for a company.
Some examples on how Stateoil principles
- Performance is about performing better than the ones you compare yourself with
- Do the right thing – use sound business judgment for all decisions.
- Resources are made available or allocated on a case by case basis
- Forward looking and action oriented
- Performance evaluation is a holistic assessment of behaviors and results
- Alignment from strategy to people with flexibility and freedom
You don’t lose weight by weighing your self
Olle Ellnestam held an interesting session about Real Options.
Real Options is about "deferring decisions to the last responsible moment". By deferring decisions and avoiding early commitments, you can gain flexibility in the choices you have later.
Olle exemplified this with a business trip where he hedged his traveling options due to the ash cloud. He had a plan ticket, a train ticket and his car available to make the trip. The different options expired at different times and had different costs. He could make the traveling decision just-in-time based on all available information instead of committing early.
When we look back, things appear to have a clear path – this can’t be applied to the future
I liked the presentation even if he was a little short on time at the end.
Carl Savage had a great presentation. He talked about how you need to focus on the real customer and the needs of the customer. In his case it was the medical students. Is the medical training done in such a way that the students really learn what they need to know.
Sorry Ari-Pekka, I did not understand what you wanted to tell us with this session.
Update: After reading Ari-Pekka’s blog post about this talk I got the message he wanted to communicate. This is truly an interesting topic. You can read the blog post here
Jurgen is an entertaining speaker with great visuals but I feel he need to be more clear and to the point what he want to communicate with his presentation. This time it was a non stop barrage of quotes from different Complexity and Systems thinkers but where was Jurgens own thinking or opinions.
If he would not be so fuzzy, as on the picture above, this could have been a much better session.
My fellow Lean/Agile Coach at Avega Group Marcus Hammarberg held a great presentation on Specification By Example and how this could be a way of exploit the knowledge bottleneck in software development.
This was a great keynote by James Sutton. He talked about Systems Thinking, the scientific method, Lean Thinking and Complexity Theory. He used life as a metaphor how all this was connected.
Here are some tweets about the keynote.
The Command & Control version of Lean is called Krap Kaizen
Original Tweet: http://twitter.com/jurgenappelo/statuses/131034245115297792
If Lean is something being done to you… instead of something you are doing to the system… you may have Krap Kaizen on your hands #less2011
Original Tweet: http://twitter.com/cyetain/statuses/131044566882205696
At the end of the presentation James said that some of the tools of Lean manufacturing was suitable in product/software development space. In the Q&A section he was asked what tools and he specifically mentioned Standard work. I think this was especially interesting as my lightning talk on the subject was shortly after his keynote.
What he referred to as Standard work was the detailed work instructions used in manufacturing and the common misconception that these are for controlling what to do when they are really the foundation to continues improvement. If you don’t know how work is done now how can you know that a process change is an improvement or not?
This was my lightning talk session. You can find the slides in my previous post
Showed us in less than six minuets what his research work on Managing Agile Development was about.
I started the second day by facilitating the LESS 2011 Stockholm Lean Coffee event.
I really liked this keynote. Peter was very to the point and presented parts of the BBC World Case study. Nothing really new to me in forms of methods, tools or techniques but a good case study.
This session was not adding anything new that Bjarte Bogsnes had not talked about in the keynote. To bad as I thought the title and the abstract really felt interesting and I had high expectations.
Henrik Mårtensson: A hoop through the OODA loop – Basic principles of business strategy and organization
Best session in the conference for me. Henrik’s witty presentation style and well thought out slides was great. Most of the agile methods and tools heavily rest of fast feedback. The OODA loop is just about that – fast feedback loops so you can make decisions based on your current conditions fast.
Henrik talked about how the US Marin Corps decision making structure and “self-organizing” teams is so effective.
He also talked about how Hoshin Kanri organizational structure. Very interesting stuff.
Claudio had the best slides of the conference! Great content and a great presentation. Claudio talked about how to really do Kaizen and using A3 as an important part of the process improvements.
This presentation was to academic for me, I think. The topic is really interesting but I didn’t feel like the question in the talk was answered.
Before the summer I contacted Steve Denning about speaking at LESS 2011 about Radical Management. Now after so many hurdles on the way I was delighted to hear him speak about the thinks he have written in his book The Leader’s Guide to Radical Management
The presentation was great and had a high pace with lots of content. The main point of his talk was that is now time to change to a new management paradigm if companies want to survive. The old marketplace has changed and now the customer is the boss!
The next generation companies will have to focus on:
- New Goal: Delight the customer – this is the over arching concept
- New manager role: From controller to enabler
- Coordination of work: From bureaucracy to dynamic linking
- New values: Radical transparency
- Communication: From command to conversations
LESS is More
You can read more about the LESS 2011 Game Day in my previous post
I really had a great time at this conference. The content was mostly good but what I really appreciated was the open and engaged community. I had such a great time talking to so many great people. Thank you all for coming and hope to see you soon again!
LESS is More!