Lean, Agile, Innovation… All buzzwords? Pat Boens - Lato Sensu Management Pag e 1

Page 2 A bit of history  Scientific Management (mass production): Frederick Winslow Taylor  Mass Production in Automobile: Henry Ford (Ford Motor Company)  TPS (Lean Manufacturing has developed from that): Toyota became in 2008 number #1 of the sector

Page 3 Lean: Setting the Scene  Eliminate variations in the production process, “3M” or MUs:  Muda (wastes)  Muri (unreasonable)  Mura (irregularity; lack of uniformity)  Eliminate wastes (“muda”) is the prime motto

Page 4 Chasing Wastes  Simply put, there are 7 wastes that Lean wants to hunt. With time, people have added new ones  Personally, I use a picture of 8 wastes that I have abbreviated as DOMINO-TW:

 Seiri: eliminate obstacles by removing unnecessary items  Seiton: make sure everything is at its place  Seiso: clean and inspect  Seiketsu: standardize the practices  Shitsuke: sustain the practices Page 5 5S

Page 6 Continuously (shitsuke)

Page 7 Continuous Improvement: Kaizen  Little by little (baby steps)  Better if sustained from the basis with support of management

Page 8 Pull System  Teams pull their work; there is no use to push it  Teams work with small batches (as opposed to mass production) (see  Production flow is limited by capacity; strict application of WIP (Work In Progress); birth of JIT

Page 9 Value Stream & Systems Thinking  Lean takes care of the entire Value Stream  No local optimization that hampers global optimization

Page 10 Let People Find Solutions  At the core, Toyota Kata:  Set a vision  Grasp current condition  Establish target condition  See

Page 11 Agility in Software Development  In the software industry, the Agile methods were officially born in 2001, even though they were around already many years before  They exist in opposition to more traditional methods of software development, called the waterfall methods, born after their father, Winston Royce, published a paper about large Software Engineering efforts back in 1970.

Page 12 Agility in Software Development  At the core of the Agile methods we find different flux of thoughts: working with small teams having an end-to-end perspective (vision), simplify to the max (simplicity is the art of maximizing the work not done), working in small iterations in which the product gets built little by little, releasing software as soon as possible as to be able to get feedback of the field asap, refining the product based on the feedback that was collected, improving continuously little by little,...  Wait a minute! Isn’t that Lean?

Page 13 Agility in Software Development  Yes, Agility is “Lean” applied to “Software development”  People with in small batches (iterations or sprints)  People are self-organized (let them find solutions by themselves)  People reflect regularly upon how they’re doing via retrospectives (Kaizen)  People do whatever is the simplest thing to build (chasing all kind of wastes)  People work with visible backlogs (kanban) limiting what the work in progress (WIP limits)  People working in all transparency  …

Page 14 Software Development in Motion  Many major companies tend to work more and more the Agile Way (understand Lean)  They simply copy some giants such as Microsoft, Apple, Google, Facebook, Netflix, Amazon, …  Banks have know understood they are IT companies, and therefore are copying more and more the giants from above  … BUT THEY ALL NEED TO INNOVATE DESPERATELY … and that’s the birth of Lean Startup

Page 15 Lean Startup: Innovation Method  Scientific method based on learning:  Accept that Business Plans are full of hypotheses  Accept that each hypothesis must be put to test  Check asap (one by one – not too many at once)  Build the simplest thing that can possibly (like Science does in Labs) (MVP – Minimum Viable Product)  Persevere or Pivot  Do this in an iterative way

Page 16 Lean Startup: Cone of Uncertainty  Full of hypotheses? Accept the Cone of Uncertainty  A startup is an organization designed to create new products and services under conditions of extreme uncertainty.

Page 17 Lean Startup: BML  Build, Measure, Learn Iterations … pretty much Deming

Page 18 Lean Startup: MVP  Simplest Product that’s viable…

Page 19 Lean Startup: Innovation Method  Usual high-level questions of Lean Startup  Do consumers recognize that they have the problem you are trying to solve?  If there was a solution, would they buy it?  Would they buy it from you?  Can you build a solution for that problem?  This poses the two most fundamental questions:  Value hypothesis  Growth hypothesis

Page 20 Reading Corner  Eric Ries: The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses  Mike Rother: Toyota Kata: Managing People for Improvement, Adaptiveness and Superior Results: Managing People for Improvement, Adaptiveness and Superior  Jez Humble, Joanne Molesky, & Barry O'Reilly: Lean Enterprise: How High Performance Organizations Innovate at Scale  Henrik Kniberg: Lean from the Trenches: Managing Large- Scale Projects with Kanban

Page 21 Reading Corner  Daniel H. Pink: Drive: The Surprising Truth About What Motivates Us  James Womack & Daniel Jones: Lean Thinking: Banish Waste and Create Wealth in Your Corporation  David J Anderson: Kanban  Jim Collins: Good to Great: Why Some Companies Make the Leap...And Others Don't