Lean Enterprise Portfolio Management - Agile Alliance · PDF fileLean Enterprise Portfolio...

Lean Enterprise Portfolio Management Lean at the Enterprise

Matt Anderson, PMP

Director, Program Management

September 28, 2011

© 2011 Cerner Corporation. All rights reserved. This document contains Cerner confidential and/or proprietary information which may not be reproduced or transmitted without the express written consent of Cerner. 1

Objectives

! Provide strategies to implement Lean for enterprise-level portfolio management

! Address challenges to lean adoption and ideas to overcoming

! Develop a roadmap for you to implement


Agenda

! Introduction to Lean ! Principles versus Practice ! Applying Lean ! Additional Topics

Introduction to Lean

Agile, Lean and Toyota


Agile Manifesto

“We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value:

Individuals and interactions over processes and tools Working software over comprehensive documentation Client collaboration over contract negotiation Responding to change over following a plan

That is, while there is value in the items on the right, we value the items on the left more.”


12 Agile Principles

1. Our highest priority is to satisfy the client through early and continuous delivery of valuable software.

2. Welcome changing requirements, even late in development. Agile processes harness change for the client's competitive advantage.

3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.

4. Business people and developers must work together daily throughout the project.

5. Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.

6. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.


12 Agile Principles

7. Working software is the primary measure of progress. 8. Agile processes promote sustainable development. The

sponsors, developers, and users should be able to maintain a constant pace indefinitely.

9. Continuous attention to technical excellence and good design enhances agility.

10. Simplicity--the art of maximizing the amount of work not done--is essential.

11. The best architectures, requirements, and designs emerge from self-organizing teams.

12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.


Toyota Motor Company

! Quick Facts ! Started in 1928 as a textile loom manufacturer ! Automotive division in 1933 with first vehicle built in 1935 ! World War II altered economy and forced major change ! 2008 became world’s largest automobile manufacturer

! Toyota Production System (aka TPS or The Toyota Way) ! Developed by Taichii Ohno, Shigeo Shingo and Eiji Toyoda ! Influenced by W. Edwards Deming and writings of Henry Ford ! Introduced “Lean Manufacturing” and concepts such as “Just-In-Time”

Fujio Cho Chairman of the board, former President, Toyota Motor Corporation

We get brilliant results from average people managing brilliant processes.

Our competitors get average results from brilliant people working around broken processes. When they get in trouble they hire even more brilliant people.

Brilliant process management is our strategy.


The Toyota Way

1. Base your management decisions on a Long-Term Philosophy, even at the Expense of Short-Term Financial Goals

2. Create Continuous Process Flow to Bring Problems to the Surface 3. Use Pull Systems to Avoid Overproduction 4. Level Out the Workload (Heijunka) 5. Build a Culture of Stopping to Fix Problems, to Get Quality Right the

First Time 6. Standardized Tasks are the Foundation for Continuous Improvement

and Employee Empowerment 7. Use Visual Controls so No Problems are Hidden 8. Use Only Reliable, Thoroughly Tested Technology that Serves Your

People and Processes


The Toyota Way

9. Grow Leaders Who Thoroughly Understand the Work, Live the Philosophy, and Teach It to Others

10. Develop Exceptional People and Teams Who Follow Your Company’s Philosophy

11. Respect Your Extended Network of Partners and Suppliers by Challenging Them and Helping Them Improve

12. Go and See for Yourself to Thoroughly Understand the Situation (Genchi Genbutsu)

13. Make Decisions Slowly by Consensus, Thoroughly Considering All Options; Implement Decisions Rapidly

14. Become a Learning Organization through Relentless Reflection (Hansei) and Continuous Improvement (Kaizen)

Principles versus Practice

Common challenges and strategies to resolve them


Activity – Brainstorm Lean Challenges

! Each group/table ! Generate list of challenges for

your business climates ! Identify true challenges from false

positives

! 2-3 groups will present

Business Processes Corporate Environment Development Practices Client Expectations Market Constraints

Ideas for Consideration


Common Challenges

! Overcoming culture and politics ! Managing annual planning cycles ! Competing priorities

! Finding the balance ! Hitting market windows ! Change tolerance ! Dealing with fires ! Micro management ! Global footprint ! Creating Flow ! Getting started

! Priming the pump ! Scaling

! Reporting ! Team/Associate assignment

“When push comes to shove, culture eats strategy for lunch” “No company can sustain high productivity without culture change”

Jack Welch – Former GE CEO Named “Manager of the Century” in

1999 by Forbes Magazine


Changing the Culture

! Focus on key business results with Lean principles ! Build on the past

! Evolution not revolution • Kaikaku still possible if needed

! Focus on the “Connectors” and “Mavens”* ! Mavens are the experts that everyone in the organization turns to

solve the hard problems. They love the details ! Connectors have wide networks that link the organization together

! Champion profile ! Grassroots connections ! Executive level credibility ! Can be a composite if single associate doesn’t fit

* - see “The Tipping Point” by Malcolm Gladwell


Challenge – Annual Planning Cycles

! Common side effects ! Significant time spent developing business cases based mainly on

wishful thinking ! Large number of business cases never approved ! Increase in the politics between areas competing for similar resources ! General feeling of if it doesn’t get approved now, it never will

! Recommendations ! Create approvals based on “slices of the pie” as opposed to individual

proposals


Challenge – Micro Management

! Scenario ! Leader wants to stay involved at the low level details

! Common side effects ! Slow decision making process frequently gated by availability ! Minimal empowerment of team members

! Strategy ! Trust = Commitment + Delivery ! Share “Servant Leader” principles ! Provide macro management alternatives


Challenges

! Complete slides for each challenge


Cerner Experience – Investment Process

! Initial State ! All business cases reviewed by group of senior executive leaders on a

quarterly basis to determine if we would invest in it ! 500+ business cases submitted per quarter with > 20% approval rate ! 2 week planned approval process that was frequently extended if a key

leader was unavailable ! Portfolio blend too heavy on support or maintenance ! Large amount of projects live at only a handful of client sites as

opposed to general adoption across the client base ! Too many “requirements fully met, but not what was intended” client

projects ! Engineering teams concerned with hitting “code complete” deadlines

and not always on actually delivering value



! Plan ! Create a structure that supports better alignment to market and client

demands ! Macro decision making investment board with accountability at the

line of business layer ! Implement Lean thinking to eliminate waste and create incremental

process improvement ! Introduce Agile development principles and methodologies


Cerner Experience – Investment Model



! Initial Roll-out (Jan 2010) ! 6 month planning windows with macro allocations for budget ! 50% reduction in business cases submitted from previous model

• Individual project approval still retained but with a significantly smaller set of executives

! Improved client feedback loops ! Restructured engineering and business organizations into Agile

Business Units (ABUs) ! Agile (mainly Scrum) roll-out started across entire development

organization (~1600 associates) ! Team composition determined by project needs


Cerner Experience - Macro Allocations Example

Innovation 55% Maintenance

25%

Support 20%

Budget

ABU A 21%

ABU B 12%

ABU C 8%

ABU D 19%

ABU E 5%

ABU F 7%

ABU G 8%

ABU H 20%

Line of Business



! What has changed (2 years later) ! Macro allocations extended to each ABU/line of business ! Transitioned from 6 month approval cycles to a yearly macro allocation ! Business cases approved at the ABU level with Lean portfolio to meet

allocation • ~100 business cases submitted to start Lean process with 80% approval

! Lean introduced for teams where Scrum was not a fit ! Significantly improved client interaction with focus on adoption, not

code complete essentially eliminating historical adoption issues ! Kanban board to display all investments in-flight with monthly senior

executive reviews to manage changes

Applying Lean

Tools and Techniques

Every project/game has two goals: • Win the current game

(deliver working software that solves the business problem) and

• Set up for the next game (just enough preparation/residual so that the team can win the next game too)

Alistair Cockburn (paraphrased)


Winning the Game

! Business Objectives ! Return on Investment (ROI) ! Speed to Market ! Culture of Innovation


Lean Portfolio Management

! Lean Principles apply, but not all Lean Manufacturing practices ! Focus on delivering VALUE to the customer rapidly ! Make improvements by focusing on the Value Stream

! Principles ! Eliminate Waste ! Create Knowledge ! Decide as Late as Possible ! Deliver as Fast as Possible ! Empower the Team ! Build Quality In ! Improve the System – “See the Whole”

! Core Processes ! Visualize the Process ! Limit Work In Process (WIP) ! Measure and Optimize Flow


Value Stream Mapping – End to End Delivery

Draft Concept Pres.

Assign Team

Graphics Design

Sound Design Dev Integr. &

Deploy 2d 1m

4h 6m

8

Game backlog

1w 6m 6m

15

Design-ready games

12

Production-ready games

1m 3w 3m (1m+2m)

3w 2h 1d

3 m value added time

25 m cycle time = 12%

Process cycle efficiency

To Do: update diagram with different example than Henrik Kniberg’s


Activity – Model Enterprise Value Stream

! Each group/table ! Define “Value” for your business ! Create a Value Stream Map from

end to end ! Add Value and Non-Value added

timings ! Calculate Process Cycle Efficiency

Value is subjective Identify hidden queues Use “average” times not

best or worst case Process Cycle Efficiency

= Value Add Time / Non-Value Add Time



Sample Kanban Board

Maximum Capacity Order Point

WIP Limit (10)

Buffer Queue

Swim Lanes

FLOW

“Don’t build features that nobody needs right now. Don’t write more specs than you can code. Don’t write more code than you can test. Don’t test more code than you can deploy” – Corey Ladas

! Visualize the Workflow ! Limit WIP ! Measure and Optimize Flow


Product Decomposition

Investment

Goal Goal Goal

Capability Capability Capability

User Story

Release Level

Funding Level


Kanban Scenario – Defect in Current Story

! Scenario ! A defect found later in the value stream that needs to be corrected prior to

release • In Lean, priority is given to items as the end of the value stream over newer

items with one exception (expedited request) ! Solution

! Mark item as blocked (pink ticket) and create new work item that is expedited to the appropriate location for correction

! If necessary, mark which WIP item will be put “on hold” while expedited item is corrected

Item “On Hold” Defect Found New Defect Item


Kanban Scenario – Concurrent Tasks

! Scenario ! Tasks within the overall workflow can be done concurrently

! Solution ! Option 1

• Kanban Cards represent high level work item • Task cards do not count against capacity

! Option 2 • Put tasks as checklist items on the work item card that are checked when

completed (or other similar idea)

Work Item Card

• Prototype • User interface • Business • Data access • Exploratory testing • Etc…

Kanban Card

Task Cards


Kanban Scenario – Divided Allocation

! Scenario ! Leadership wants overall development split 70% Innovation / 30%

Support

! Solution ! Create swim lanes for each division and set WIP limit for each swim

lane based on desired % of total WIP ! WIP limits for swim lanes must equal WIP limit for full system

WIP Limit (10)

WIP

Limit

(10)

Innovation

Support


Kanban Scenario – Service Class and/or Size

! Scenario ! Need to show difference between priority/size of items as want to have

different SLAs based on type

! Solution ! Create swim lanes and/or card color for different priorities and sizes ! Have simple rules for SLAs for each type ! Limit number to 6 maximum; fewer is better

WIP Limit (10)

High

Standard

WIP

Limit

(10)


Kanban Scenario – Expedite

! Scenario ! New high priority item comes in that must be done now and is more

important than any other work in process ! Solution

! Create “Expedite” swim lane that is used only for this purpose ! Temporarily allow for WIP to be exceeded but mark which items in

process will be stopped when expedited item gets to that point in the system

Service Class

WIP Limit (10 + 1)

Expedite Lane

Items to be held for Expedite


Combining Scrum and Kanban Boards

! Use Kanban for end to end workflow ! Use Scrum (or other Agile methodology) for development

team

Cards are Stories or Capabilities

Cards are Tasks


Activity - Create Your Kanban

! Design your Kanban card ! Design your Kanban board ! Create board layout ! Create simple rules for each

column ! Create initial WIP limits

! Determine board management strategy

Card and Board tell the whole story

Leverage Value Stream map • Determine start and stop point

for the board

Start simple and expect to refactor



Cerner Investment Kanban Card


Cerner Kanban

To Do: update with current board

Additional Topics

Questions and Answers

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