llkd13 thriving under uncertainty
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© Patrick Steyaert, 2013 Thriving under uncertainty
Thriving under uncertainty with
Discovery Kanban
@PatrickSteyaert
London Lean Kanban Day March 2013
© Patrick Steyaert, 2013 Thriving under uncertainty
2 Options and variation
Option 1
Effort = 300MD Most likely delivery = May 31 Variation = ±10 days
Option 2
Effort = 300MD Most likely delivery = May 31 Variation = ±20 days
Deadline = May 15
© Patrick Steyaert, 2013
Options perspective (Anti-fragile)
§ thrive from disruption; variation can be beneficial
Thriving under uncertainty
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Risk perspective (Resilient)
§ absorb variation and tolerate disruption without collapsing
TEAM
Customers/ Users / Stakeholders
FLEXIBLE BOUNDARY
Thriving under uncertainty
Plan perspective (Robust but fragile)
§ variation and disruption are not tolerated very well
© Patrick Steyaert, 2013 Thriving under uncertainty
4
Pains and gains in the history of projects
Absorbing variation - Classes of Service
Thriving on variation - Options
Kanban variations
© Patrick Steyaert, 2013
A calamitous history of projects*
Project Actual traffic as percentage of forecast
Channel tunnel UK-FR
18%
Miami metro, USA
15%
Denver International Airport, USA
55%
Thriving under uncertainty
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Project Cost overrun
Channel tunnel UK-FR
80%
Øresund access link, DE
70%
Great belt link, DE
54%
Øresund coast-to-coast
26%
Conclusion: don’t trust cost estimates Conclusion: don’t trust
usage forecasts
*Source: Megaprojects and risk, an anatomy of ambition, Bent Flyvbjerg, Nils Bruzelius and Werner Rothengatter, 2003
© Patrick Steyaert, 2013
IT projects
Thriving under uncertainty
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4
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to integration testing.
3. Building effective teamsLarge projects can take on a life of their own in an
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teams need a common vision, shared team processes,
and a high-performance culture. To build a solid team,
members should have a common incentive structure
that is aligned with the overall project goal, in contrast
with individual work-stream goals. A business-to-
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value-delivery targets will also ensure that all the
critical change-management steps are taken and
that, for example, communications with the rest
of the organization are clear, timely, and precise.
To ensure the smooth start-up of new front-end
and core systems that more than 8,000 people
would use, one company team launched a massive—
and successful—change-management program.
The program included a regular newsletter, desktop
calendars that highlighted key changes and mile -
stones, and quarterly town-hall meetings with the
CEO. The team made sure all top business-unit
leaders were involved during the user-acceptance
phase. The company included at least one change
agent on each team. These agents received training
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of the IT change. The actions helped the company
to verify that it had the required business capabili-
ties in place to make full use of the technology being
implemented and that it could deliver the business
value expected in the overall project business case.
4. Excelling at core project-management practices
To achieve effective project management, there’s
no substitute for tested practices. These include
having a strategic and disciplined project-manage-
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for managing requirements engineering and change
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Unexplainedcause
Rough cost-overrun disaggregation, %
McKinsey On Business Technology 2012 — Value AssuranceExhibit 2 of 3
IT executives identify 4 groups of issues that cause most project failures.
1With cost overrun, in 2010 dollars.2Cost increase over regular cost.
Source: McKinsey–Oxford study on reference-class forecasting for IT projects
Missing focus1
Content issues2
Skill issues3 Execution issues4
13
45
9
6
11
6
IT projects >$15 million1
2 45%
Benefits shortfall –56%
Exhibit 2
Delivering large-scale IT projects on time, on budget, and on value, Michael Bloch, Sven Blumberg, and Jürgen Laartz
17 percent of IT projects go so bad that they can threaten the very existence of the company (cost overruns of +200% and schedule slippage of nearly 70%)
Double Whammy – How ICT Projects are Fooled by Randomness and Screwed by Political Intent, Alexander Budzier, Bent Flyvbjerg, Aug
2011.
© Patrick Steyaert, 2013
Delusions and deception
§ Imperfect forecasting techniques and inadequate data
§ Planning fallacy & optimism bias
§ Strategic misrepresentation and asymmetric information
Thriving under uncertainty
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© Patrick Steyaert, 2013
How projects are “sold”
Thriving under uncertainty
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Gains/Losses f(X)
Unknown X
Gain
Pain
Gain more than pain
Convexity
© Patrick Steyaert, 2013 Thriving under uncertainty
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© Patrick Steyaert, 2013
How projects turn out in practice
Thriving under uncertainty
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Gains/Losses f(X)
Unknown X
Gain
Pain
Pain more than gain Concavity
© Patrick Steyaert, 2013
Variation and disruption
§ Political intervention
§ Interrupt work
§ Technical problems
§ Changing requirements
§ Resources not available
§ Environmental problem(s)
§ …
Thriving under uncertainty
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§ Order of magnitude (size)
§ Customer
§ Team
§ Policies
§ Technology
§ Environment
§ …
© Patrick Steyaert, 2013
Amplification – pain
Requirements Product Work
Prioritization
Changes
Thriving under uncertainty
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Failure load / Rework
© Patrick Steyaert, 2013
Irreversibility & Lock-in
Thriving under uncertainty
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© Patrick Steyaert, 2013
Complex projects
Thriving under uncertainty
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Convexity Concavity
How they are planned How they turn out
© Patrick Steyaert, 2013
Options perspective (Anti-fragile)
§ thrive from disruption; variation can be beneficial
Thriving under uncertainty
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Risk perspective (Resilient)
§ absorb variation and tolerate disruption without collapsing
TEAM
Customers/ Users / Stakeholders
FLEXIBLE BOUNDARY
Absorbing variation
Plan perspective (Robust but fragile)
§ variation and disruption are not tolerated very well
© Patrick Steyaert, 2013
Kanban systems – Less pain
Demand
Capability
Variable demand
Variable capability
Bottlenecks Uncertainty Loopbacks
Accredited Kanban Training
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Kanban
© Patrick Steyaert, 2013
Cost of delay
time
17
Thriving under uncertainty
INTANGIBLE
FIXED DATE
STANDARD
EXPEDITE
Cost/Value
x
© Patrick Steyaert, 2013
Classes of service - Minimize Cost of delay while retaining flexibility
Thriving under uncertainty
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Cos
t of
del
ay
§ will be pulled immediately by a qualified resource
§ will be pulled based on risk assessment (delivering on time)
§ will use first in, first out (FIFO) queuing approach to prioritize pull
§ will be pulled through the system in an ad hoc fashion
Urgent
Important Fl
exib
ility
INTANGIBLE
STANDARD
FIXED DATE
EXPEDITE
§ cost of delay may be significant but is not incurred until much later
§ cost of delay is shallow but accelerates before leveling out
§ cost of delay goes up significantly after deadline
§ critical and immediate cost of delay
Respond
Anticipate
Cost of delay Policy
© Patrick Steyaert, 2013
Capacity allocation across classes of service
time
19
Thriving under uncertainty
INTANGIBLE
FIXED DATE
STANDARD
EXPEDITE
Cost/Value
x
8 = 50%
+1 = +5%
4 = 20%
6 = 30%
Expedite
Fixed date
Standard
Intangible
© Patrick Steyaert, 2013
Options perspective (Anti-fragile)
§ thrive from disruption; variation can be beneficial
Thriving under uncertainty
20
Risk perspective (Resilient)
§ absorb variation and tolerate disruption without collapsing
TEAM
Customers/ Users / Stakeholders
FLEXIBLE BOUNDARY
Thriving under uncertainty
Plan perspective (Robust but fragile)
§ variation and disruption are not tolerated very well
© Patrick Steyaert, 2013
Amplification of gains
Requirements Product Work
Resources
Opportunities
Thriving under uncertainty
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User feedback/ Revenue
© Patrick Steyaert, 2013
Risk/Options
Opportunity for learning
time
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Enablers Can we build it?
Table stakes What is essential?
Exceptionals Protect & exploit existing value
Cost/Value
Thriving under uncertainty
Probes Is there a need?
© Patrick Steyaert, 2013
Never commit early (unless you know why)
Thriving under uncertainty
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EXCEPTIONAL
Potential option
PROBE Potential
option Validate
ENABLERS
Potential option Validate
TABLE STAKES
Potential option Validate
© Patrick Steyaert, 2013
Exercising options
Thriving under uncertainty
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Exercised Option
Potential Option Option
© Patrick Steyaert, 2013
Options expire
Thriving under uncertainty
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§ Expedite – critical and immediate cost of delay
§ Fixed date – cost of delay goes up significantly after deadline
§ Standard – cost of delay is shallow but accelerates before leveling out
§ Intangible – cost of delay may be significant but is not incurred until much later; important but not urgent
è will be pulled immediately by a qualified resource
è will be pulled based on risk assessment (delivering on time)
è will use first in, first out (FIFO) queuing approach to prioritize pull
è will be pulled through the system in an ad hoc fashion
© Patrick Steyaert, 2013
Options have value
Thriving under uncertainty
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Gains/Losses f(X)
Unknown X
Gain
Pain
Gain more than pain
Convexity
© Patrick Steyaert, 2013
Options - Maximize learning, minimize cost of failure
Cos
t of
fai
lure
Thriving under uncertainty
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Option
Commitment Le
arnin
g op
por
tunit
y
Exploration
Exploitation
ENABLERS § Minimally coherent end-to-end functionality showing critical quality
§ Explore feasibility and critical quality
TABLE STAKES § End-to-end functionality with standard quality
§ Explore what is essential for exploitation
EXCEPTIONAL § Broad and detailed functionality, Hi-Fi implementation
§ Protect & exploit existing value
§ Fragmented functionality, Lo-Fi implementation
§ Explore customers and needs
PROBE
© Patrick Steyaert, 2013
Exploration versus exploitation
Thriving under uncertainty
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PROBE
EXCEPTIONAL
TABLE STAKES
ENABLERS
Potential option
Potential option
Potential option
Potential option
Validate
Validate
Validate
Exploitation
Exploration
© Patrick Steyaert, 2013
Real options*
An option is the right to do something but not the obligation
§ Options have value
§ Options expire
§ Never commit early (unless you know why)
Thriving under uncertainty
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*Ref: Chris Matts & Olav Maassen
© Patrick Steyaert, 2013
The knowledge discovery process
Thriving under uncertainty
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Potential option Option Exercise
option Validate option
Abandoned / Continue
Narrative, fragmented,
possibly conflicting
Coherent, shared concept
Working product (i.e. probe, enabler,…)
Feedback (e.g. user feedback)
Decision to dampen or
amplify
Discovery front-end Development Discovery back-end
Forming hypotheses Validating hypotheses
© Patrick Steyaert, 2013
Discovery Kanban Board
Potential option
Option Exercise option
Validate option
Abandon / Continue
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table stakes
Thriving under uncertainty
3/3/9/4 1/1/5/2 1/1/4/2
WIP limits express exploration – exploitation balance
enabler
probe
Expedite
Fixed date
Standard
Intangible
Legend
Probe
Enabler
Table stakes
Exceptional
Fixed date probe Demo for tradeshow on 28/3
Intangible probe R&D
probe 28/3
Exploration Exploitation
FLOW
Expedite table stakes Overdue regulatory development
Standard enabler Framework development
FLOW
© Patrick Steyaert, 2013
Kanban variations
1. Visualize – options
2. Minimal options / maximum un-
validated assumptions
3. Manage Flow – flow of customer/
user acquisition
4. Make Process Policies Explicit –
option policies (e.g. in terms of
cost of failure)
5. Implement Feedback Loops –
customer feedback loops
6. Improve Collaboratively, Evolve
Experimentally (using models/
scientific method)
1. Visualize – work
2. Limit work in progress
3. Manage Flow – flow of work
4. Make Process Policies Explicit –
work policies (e.g. in terms of
cost of delay)
5. Implement Feedback Loops – at
workflow, inter-workflow and
organizational levels
6. Improve Collaboratively, Evolve
Experimentally (using models/
scientific method)
Delivery Kanban Discovery Kanban
Thriving under uncertainty
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© Patrick Steyaert, 2013
Not just for start-ups
§ Product development (mature product)
§ Business-IT programmes
§ Business transformation
§ Lean agile coaching
Thriving under uncertainty
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© Patrick Steyaert, 2013
Options perspective (Anti-fragile)
§ thrive from disruption; variation can be beneficial
Thriving under uncertainty
34
Risk perspective (Resilient)
§ absorb variation and tolerate disruption without collapsing
TEAM
Customers/ Users / Stakeholders
FLEXIBLE BOUNDARY
Thriving under uncertainty
Plan perspective (Robust but fragile)
§ variation and disruption are not tolerated very well
© Patrick Steyaert, 2013
Inspiration
Thriving under uncertainty
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http://alistair.cockburn.us/ The+Design+as+Knowledge+Acquisition+Movement
Knowledge discovery process:
© Patrick Steyaert, 2013
Classifying features
Anti-fragile projects
37
Epic Epic Epic
Story
Story
Story
Story
Story
Story Story Story Story Story Story
Story Story
Story
Story
Story
Story
Story
Story
Story Story
© Patrick Steyaert, 2013
Classifying features - probes
Anti-fragile projects
38
Epic Epic Epic
Story
Story
Story
Story
Story
Story Story Story Story Story Story
Story Story
Story
Story
Story
Story
Story
Story
Story Story
© Patrick Steyaert, 2013
Classifying features - enablers
Anti-fragile projects
39
Epic Epic Epic
Story
Story
Story
Story
Story
Story Story Story Story Story Story
Story Story
Story
Story
Story
Story
Story
Story
Story Story
Enablers
© Patrick Steyaert, 2013
Classifying features – table stakes
Anti-fragile projects
40
Epic Epic Epic
Story
Story
Story
Story
Story
Story Story Story Story Story Story
Story Story
Story
Story
Story
Story
Story
Story
Story Story
Enablers
Table stakes
© Patrick Steyaert, 2013
Classifying features – exceptionals
Anti-fragile projects
41
Epic Epic Epic
Story
Story
Story
Story
Story
Story Story Story Story Story Story
Story Story
Story
Story
Story
Story
Story
Story
Story Story
Enablers
Table stakes
Exceptionals