(ism207) how the principles of lean transform innovation
Post on 21-Apr-2017
1.095 Views
Preview:
TRANSCRIPT
© 2015, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Joanne Molesky, ThoughtWorks jmolesky@thoughtworks.com
Conor McNamara, AWS Enterprise Strategy Lead APAC mcnconor@amazon.com
October 2015
ISM207
The Lean EnterpriseHow the Principles of Lean are
Transforming Corporate Innovation
What to expect from the session
Learn how:
• The application of lean principles has evolved from the
field of manufacturing to corporate innovation
• To challenge traditional thinking on management
processes and governance practices
• Leading corporates across the globe have leveraged lean
principles to innovate
• To get started
Organizational effectiveness – which one are you?
http://www.slideshare.net/npflaeging/betacodex11-the-3-structures-of-an-organization?qid=0a86fca0-6294-45a1-b489-bbbe1bc34c09&v=qf1&b=&from_search=1
Conventional Business Models are under attack
EMPOWERMENT
ADAPTIVE
VARIABLE CONSUMPTION
ZERO MARGINAL COST
LOCK IN
EFFICIENT
OWNERSHIP
LOWER COST
CUSTOMER
PROCESSES
RESOURCES
COST BASE
…..all enabled by the emergence of Cloud Computing
The Principles of Lean
1. Focus on Customer
Value
2. Map the Value
Stream
4. Create Flow
5. Continuous
Cycle & Iteration
3. Reduce Batch Size & Waste
The Lean Startup: Why Products Fail
YouCustomerAssume you know what the
customer wants
A lot of the time doesn’t
actually know what they want
Technology is no longer the bottleneck!
Customer
Clo
ud e
nable
d In
novatio
n P
latfo
rm
Traditional
Management
Processes
Ideas/ Business
Opportunities
Gary Hamel, American Management Expert
“Right now, your company has 21st century Internet enabled
business processes, mid 20th century management processes, all
built atop 19th century management principles"
Key Findings of 2014/15 State of DevOps Reports
• IT performance = Business performance
• Culture matters.
• 30X more frequent, 200X shorter lead time, 60X
fewer failures.
• Greenfield, brownfield or legacy - it all works
Puppet Labs, IT Revolution Press, PWC, 2015 State of DevOps
Puppet Labs, ThoughtWorks, IT Revolution Press, 2014 State of DevOps
BUSINESS
CEO, COO, CFO, CMO
TECHNOLOGY
CIO, CTO, CDO(Digtial and/or Data)
…but the age old gap is inhibiting value creation
Traditional budget process view
BUSINESSMany good ideas, we need money!
PROJECTSWe’re working, give us money!
OPERATIONSThat doesn’t work – need more money!
Stop thinking projects…
business projects operations
Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
= No Visibility into actual value of
products/services
Continuous Deployment
Think end-to-end products
Customers
Service DeskOperations Management
Multiple Cross-Functional Product Teams
Cloud Competency Center
Cloud
Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
= Visibility into total value of
products/services
Consumption Economics Creates Value
Contract Tenure
Value
WASTE
Lost Opportunity CostWhat you
traditionally pay for
What you now pay
for
The Cloud provides real-time commercial levers
Elasticity Right-sizing Reserved Capacity
…but you need to invest in skills and capabilities to pull these levers
Case Study
http://www.computerweekly.com/news/4500251688/GDS-saves-the-government-17bn-through-digital-and-technology-transformation
Stop the process madness
Lean Enterprise Loop
Enterprise Loop
Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
The Problem with GRC
Large teams
+
lots of waiting
+
lots of box ticking
$$$
+
Ineffective
risk management
=
…many GRC processes are the antithesis of Lean principles
There is an alternative approach
…at a fraction of the cost and with a much heightened risk
effectiveness
Manage own risk
position
Ongoing
monitoring and
reporting
Fine tune and evolve
processes in real-time
High control
effectiveness (Design
& Operate)
AWS
Common Goals
Ongoing
Collaboration
Define
boundaries
Product
team
GRC
team
Horizon 1
Execute, Sustain, Retire
Seeds of today,
planted for tomorrow
Time
% o
f p
ort
folio
DISRUPTION POINT DISRUPTION POINT
Horizon 3
Envision, Explore, Disrupt
Horizon 2
Demonstrate, Exploit, Scale
Enterprise Portfolio – The Three Horizon Model
Humble, Molesky, O’Reilly, Lean Enterprise: How High Performance Organizations Innovate At Scale
Corporate Governance: What do you need to change to develop horizon
2 and 3 in your organization’s portfolio of work?
Finance: What is the first step you can take to increase visibility
into the total cost of products in your organization?
GRC: How do you need to change the relationship between your
teams and GRC teams to manage risks more effectively?
Procurement: How would you change your organization's
procurement practices to allow better use of technology?
Organizational Alignment: What common measures could you use
to determine the contribution of your teams to customer value?
Suncorp’s 2014 annual report “simplification has enabled the Group to operate a
more variable cost base with the ability to scale resources and services according to
the market demand. Simplification activity is anticipated to achieve savings of $225m
in 2015 and $265m in 2016”
£2.3Bn budget
Actual £10bn
Outcomes?
Technology simplification
£105m savings
(+ve) citizen experience
Flagship
2011 2015
http://www.computerweekly.com/news/4500251688/GDS-saves-the-government-17bn-through-digital-and-technology-transformation
So how did they do it?
• Formed the “right” multi-disciplined team
• Limited initial scope
• Delivered value early & often
• Strangled the old world
• Pursued principles over rules
• Fostered a culture of continuous improvement
AWS helps you become a Lean Enterprise
1. Focus on Customer
Value
2. Map the Value
Stream
4. Create Flow
5. Continuous
Cycle & Iteration
3. Reduce Batch Size & Waste
Eliminate the undifferentiated
heavy lifting
Reduced cost of support &
maintenance
Common platforms,
modularization
PAYG
Eliminate the innovation
bottleneck
Automation
Process Uniformity
A/B testing
Real-time
customer data
Lean Enterprise: How High
Performance Organizations
Innovate at scale
Additional Reading
www.lean.org
Thank you!
Joanne Molesky jmolesky@thoughtworks.com
Conor McNamara mcnconor@amazon.com
top related