1. December 6, 2015 Dragos Dumitriu Kanban Style High Performance Tailor Solutions Fit for Your Context

2. The Kanban Method 2

3. Principles 1.Start with what you do now 2.Agree to pursue incremental, evolutionary change 3.Encourage acts of leadership at all levels Core Practices  Visualize Workflow, Work and Current Process  Limit Work-in-Progress (WIP)  Manage Flow  Make Policies Explicit  Implement Feedback Loops  Improve Collaboratively, Evolve Experimentally Principles 1.Start with what you do now 2.Agree to pursue incremental, evolutionary change 3.Encourage acts of leadership at all levels Core Practices  Visualize Workflow, Work and Current Process  Limit Work-in-Progress (WIP)  Manage Flow  Make Policies Explicit  Implement Feedback Loops  Improve Collaboratively, Evolve Experimentally The Kanban Method 3

4. The Kanban Method - Components 4

5. The Kanban Body of Knowledge 5

6. Strategy Review Risk Review Monthly Service Delivery Review Bi-Weekly Quarterly Kanban Meeting Daily Operations Review Monthly Replenishment/ Commitment Meeting Weekly Delivery Planning Meeting Per delivery cadence change info change info Kanban Meetings and Reviews 6

7. Accelerate delivery of service from concept to consumption – Team focuses on systemic improvements like lead time and flow efficiency across a value stream rather than on individual utilization – Continuous improvement in every phase of engineering and operations leads to minimizing or eliminating waste – Limiting WIP improves predictability and management of dependencies Maintain sustainable pace – Pull systems prevent overburdening because work starts when there is capacity to complete it – Collective design of a tailored work system improves morale and engagement – Visibility of capacity and priorities calibrates work cadence Strengthen relationships with customers – Pull systems are based on customer’s needs (customers initiate the pull) – Focus on the end-to-end process improves quality and predictability – Visualizing WIP and policies improve trust and transparency Common Kanban Application 7

8. Productivity Cost (x 100) Sev 1 TTR Other TTR Replace Estimates with Forecast Better Requirements Focus on Flow (TOC) Changed dev : test ratio from 1:1 to 2:1 Added 1 developer and 1 tester Zero Backlog Achieved Some Idle Time Extra Capacity 8 2004: Worst to Best Microsoft IT Team in 1 Yr.

9. 9 2010: The Kanban Method

10. From Worst to Best IT Org in 1.5 years Make work, workflow, and queue/wait times visible (Kanban) – Enterprise NOT Stakeholder prioritization based on capacity, eliminate failure demand, shorten cycle time. Cross train people and focus on moving knowledge (first) and work (second) from T3 to lower tiers – 80-300% boost to tiers capacity over 2 years, lower cost, higher productivity Establish Service Lines run by a Service Manager (ITIL v3) – Put the pain where it belongs; resulted in jaw dropping reduction of failure demand within weeks. MI Reviews and Trend Analysis are tied to Service Team rewards – Automation, identification of training needs for IT and for customers – Established reputation for building the right thing, right Between 2008 and 2013, IT Org is voted 3 times as one of the Best Places to Work in IT (CIO Magazine or IDG’s Computerworld) 10

11. 2013: European CIO of The Year Eric-Jan Kaak 11

12. 2015: European CIO of The Year Anton Leitner 12

13. 2014: From 12 to 60 in 2 Months 13

14. Team Members Say… “We don’t know what the priorities are.” “Constant change in priorities.” “I couldn’t do anything I was planning to do today.” “Everything is urgent.” “Who screams the loudest gets their work done!” “We are blocked by other teams.” “We don’t have enough information to finish what we start.” Customers Say… “Your team is always late!” “Your team is like the Bermuda Triangle, where is our request?” “You don’t understand our process” “You’re too slow to react” “You’re blocking us” A Knowledge Worker’s World 14

15. A Knowledge Worker’s World 15

16. Fortunately… 16

17. Unfortunately… Do you feel driven to complete small tasks even though they are low priority? Does it happen to you to work on one task, and worry about other tasks at the same time? Do you feel tensed when thinking of tasks not completed? Zeigarnik Effect - Our mind has an overwhelming desire to finish what we have started: When we are prevented from finishing tasks, we are left in a state of tension. which manifests itself in improved memory for the uncompleted task. The more outstanding tasks we have, the more difficult it becomes for us to pursue any single objective with uninterrupted concentration. Unfinished tasks tend to constantly interrupt our thoughts, a sort of auto-pilot system reminding us of what needs to be completed. The Bad News: When we have a lot of tasks in progress, it is hard to concentrate on one. Interruptions that cause a person to fall behind in their objective also cause anxiety that brings about constant thoughts of unfinished business. The Good News: We are inclined to focus on finishing what we start. Prioritization, use of blockers and allocating work based on capacity to complete it, helps accelerating completion of tasks and projects. See more at: http://www.ccpace.com/we-cant-break-physical-laws-we-can-break-ourselves-against- them/#sthash.JJTRZ8fv.dpufhttp://www.ccpace.com/we-cant-break-physical-laws-we-can-break-ourselves-against- them/#sthash.JJTRZ8fv.dpuf 17

18. Unfortunately… 18

19. A Knowledge Worker’s World “Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.“ – Einstein 19

20. Visual Management Board To Do Done In progress 20

21. Visual Management Board 21

22. 11 M$ 109 Requirements, $100K Each 22

23. Kanban System For Knowledge Work Input Queue Dev Ready In Prog Done Build Ready Test Release Ready StageProd. Done In Prog Development Analysis 5 4 34 22 ∞ ∞∞ 23

24. Kanban System For Knowledge Work H F F O M N K J I Pull Ideas D E A I Dev Ready G 5 Ongoing Development Testing Done 33 Test Ready 5 F B C Pull * UAT Release Ready ∞∞ 24

25. Kanban System For Knowledge Work Kanban systems make it obvious when work is ready to be “pulled” from one stage to the next (based on the limits in each step rather than being pushed from start to finish. Flow of work could is affected by many forms of waste or non-value adding activities including: multitasking overburden interruptions incomplete requirements conflicting or inconsistent priorities continuous change in priorities dependencies 25

26. Kanban System For Knowledge Work The team should assign an explicit limit to how many items can be in each workflow state to prevent the inefficiency introduced with multi-tasking. New work cannot be pulled in until there is available capacity in that stage. Benefits of Limiting WIP: Decrease Lead Time Avoid Task Switching Improve Quality Prevent Overload Improve Predictability Enable Faster Feedback Create Slack Make Decisions Faster Ability to Adapt to Change Improve Morale Options for Limiting WIP: Limit the Whole System Column Limits Personal Limits Sprints/Iterations Discussion 26

27. A Knowledge Worker’s World Little’s law: lead time = work-in-progress (WIP) throughput 27

28. A Knowledge Worker’s World Backlog Estimating Building TestingAcceptance/SOX Ready to Deploy Deployed Weeks Work Items Lead Time 11 Engineering Cycle Time Engineering Cycle Time Lead Time 6 WIP 11 WIP 6 28

29. 29 Kanban Performance Indicators (KPI) Lead Time – Lead Time is essentially resolution time or time to market. It is defined as a period of time measured from the moment when the request is made until the work item is ready to be used. It is important to understand that lead time is not effort. You may have a lead time of three weeks for a change request that took only a week of effort. Work-In-Progress Limit – A Work-In-Progress (WIP) limit is the limit set of the number of tickets/cards/work items that can be worked on at any one time. This allows people to focus on what’s important and not switch too much between tasks (which creates waste). Low limits lead to idle people and high limits lead to idle tasks. Experiment, measure and find out what is right for your team. Cycle Time – Cycle time is the time from when work starts on the change request until the change is live; it is not effort. Cycle Time is always shorter than Lead Time. Flow Efficiency – Percentage of Lead Time representing value-adding activities compared to wait times between activities (non-value-adding). It is the best metric to drive improvements in capacity. A flow efficiency of 10 percent for a process that has a Lead Time of 10 days, means that only 1 day is spent on value-added activities. In IT we commonly see flow efficiency in single digits before using Kanban and 30% – 70% within a year of Kanban.

30. 30 Build an Evolutionary Forecasting Model In July, based on historic information, we know general zones of hurricane origin and tracks for the hurricane season. In August, hurricanes can originate in different locations than predicted and can travel much different paths from the average. Forecasts are adjusted accordingly and proactive action is taken (e.g. evacuation). In September, we can forecast with higher degree of confidence. We will never know the exact path until after the hurricane is over.

31. 31 Probabilistic Forecast = Better Predictability SLA expectation of 45-50 days with 85% on-time Mean of 31 days SLA expectation of 106-113 days with 98 % on-time

32. Complexity Requires Adaptability The boundaries of a complex system evolve as we interact with the system. To solve problems in the realm of complexity, we need adaptive systems that help us See patterns of change as they form so we can React quickly when needed or Experiment with them in order to continuously learn about and improve the system Our continuous improvement process must allow us to Learn how to classify and reclassify information How to evaluate its reliability How to build better practices in real time 32

33. Complexity Requires Adaptability Kanban Systems Help us understand the work relationships in our organization Support context-specific learning that can be applied to optimizing our processes Monitoring and measuring the work allows the capability for continuous, incremental changes to the system. Kanban Practices Reveal how actions impact the results we seek How to classify and reclassify information as our context changes How to look at problems as direction constantly changes How to teach ourselves 33

34. Complexity Requires Adaptability Visualize Limit WIP Manage FlowExplicit Policies Feedback Loops (Kata) Improvements 1 10+ coach teamOps review 5+ 1 1 7 LRM proto kanban multi Ops review coached Model-driven Impl deepening Observed evo NPS 2,3,4 11/13/201220 11/01/201319.5 08/21/201431.5 6,5.5,10 3,2,4 3,4,7 3,3,4.5 3,2,2 34

35. Complexity Requires Adaptive Systems 35

36. Thank You! @thewaitlifter 36 Software Engineering IT Operations Portfolio Management Lean Enterprise Solution Delivery Director, Enterprise Solutions Dragos’ passion is to help organizations reach higher levels of performance with engaged employees who delight customers. He designs strategy and leads teams to deliver business solutions that accelerate time to market and deliver sustainable gains in profitability, performance, and shareholder value. Over the past 15 years, Dragos performed in almost every role critical to software development, to IT operations and to application support. He has held leadership, consulting and training roles providing simple and effective solutions to hundreds of customers worldwide. ddumitriu@ccpace.com

37. Addendum - Practical Example

38. 38 From Worst To Best In One Year “It takes you forever to get anything done!” Unhappy Customer GM

39. 39 “It takes you forever to get anything done!” - We do not understand what they are doing - Deliveries take forever - Deliverables are always late - Only what gets escalated is completed - Team must be incompetent The Worst

40. GDCI PM PS Backlog 155 Days Change Requests Redmond PM Dev Test Support User Acceptance Testing Management Production ROM Customers ROM SOX Rework 40 The System 60-80 tickets WIP

41. PS Backlog GDCI PM 155 Days Change Requests Redmond PM DevTest Support User Acceptance Testing Management Production Rework Customers ROM SOX 22 Days 41 The Change 60-80 10 tickets WIP 10 5 5

42. Productivity Cost (x 100) Sev 1 TTR Other TTR Replace Estimates with Forecast Better Requirements Focus on Flow (TOC) Changed dev : test ratio from 1:1 to 2:1 Added 1 developer and 1 tester Zero Backlog Achieved Some Idle Time Extra Capacity 42 The Best

43. Visualized work, workflow, and process (Kanban) – Manage flow, limit WIP, improve flow efficiency Replaced deterministic estimation with probabilistic forecasts based on historical data – 30% boost to DEV and to TEST capacity Replaced Cost Accounting with ROI based on budget contribution – 20% boost to PM capacity PM makes sure requests have necessary and sufficient info for Dev, Test, and Ops – 20% boost to DEV, Test, and Ops capacity Balance team capacity (e.g. changed dev:test ratio from 1:1 to 2:1) – 33% boost to DEV capacity, and reduced avg. delivery time from 60 to 30 days Leverage Operations SME upfront not at the end of the process – Improved overall productivity and minimized rework Use Kanban KPIs to show impact of internal and external decisions – Priceless build of trust with customers and of employee morale 43 Action Summary