Lean Startup: It’s Not Just Technology, Lives are at Stake Ken Power

About me ! My day job

! Co-Founder, Agile Office at Cisco !  Internal Agile & Lean Consultant

! Extra-curricular activities ! Fellow of the Lean Systems Society (http://LeanSystemsSociety.org/) ! Award-winning publications in Agile and Lean product development ! Frequent speaker at major international Agile and Lean conferences !  Involved in organizing international Agile and Lean conferences !  Industry/academic collaborative research on Agile and Lean software development ! Blog: http://SystemAgility.com/ ! Twitter: @ken_power

Pilot Projects

2008 • First agile pilots • Agile Projects • Organic Growth across the BU through ground-up pilot projects

Formal Agile Transition Program

Launched

2009 • More Teams • Agile Program Management

• System Wide Focus

• Formal Training Plan

• Formal Exec Support

• Broader Stakeholder Engagement

• Lean Thinking • Lean Principals

Agile Office Established

2010 • Commitment to sustainable and sustained agility

• Broad Organization Focus

• Focused Stakeholder Engagement

• Closer Customer Engagement

• Investigate Lean Startup approaches

Culture and Mindset

2011 • Support teams in innovating and developing the processes that are right for them

• Expand adoption across product areas

• Lean Startup principles

• Improve capability of organization

• Develop Portfolio Management Concepts

Portfolio Management

across the Business Unit

2012 • Synchronize all products across the BU

• Problem solving and obstacle removal at an org level

• Organization Learning

• Quantify and reduce Technical Debt

• Agile Architecture

• Eliminate Waste

Ongoing continuous

improvement

2012+ • Create Flow through the Organization

• Continue to Lead through Innovation

• Focus on Teams and Culture

• Refine and Improve

• Build on Organization Learning

• Sustainable Organization

January 2008! December 2009! August 2010! May 2012!

Evolution of a Lean Organization June 2011!

“there were macroeconomic forces outside of our control”

Don’t let this be an excuse:

What could possibly go wrong?

6 Myths of Product Development

The fallacies that cause delays, undermine quality, and raise costs

D.#G.#Reinertsen,#“The$principles$of$product$development$flow$:$second$genera8on$lean$product$development”.#Redondo#Beach,#Calif.:#Celeritas,#2009.###S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#Review,#vol.#90,#pp.#84G94,#May#2012#

Myth 1 High utilization of resources and people will improve performance.

Myth 2 Processing work in large batches improves the economics of the process.

Myth 3 Our plan is great; we just need to stick to it. Myth 4 The sooner the project is started, the sooner it will

be finished. Myth 5 The more features we put into a product, the more

customers will like it. Myth 6 We will be more successful if we get it right the

first time. D.#G.#Reinertsen,#“The$principles$of$product$development$flow$:$second$genera8on$lean$product$development”.#Redondo#Beach,#Calif.:#Celeritas,#2009.###S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#Review,#vol.#90,#pp.#84G94,#May#2012#

What is Lean Startup?

!

Agile Software Development

Minimum Viable Product

The Fastest Learner Wins

Ideas

Build

Products

Measure

Data

Learn

Customer Development

Here is some data about you as a group

Understand your customers

Roles

CEO Other Exec Product Manager Engineer Consultant

Organization Profile

Startup

Established Company

Primary Activity

Products Srvices Non Profit

Company Size

2 to 50 101 to 1000

Areas of Interest

Innovation

Customer Development Short Releases

Managing Change Strategy

Entrepreuner or Intrapreuner?

Entrepreneur Intrapreneur Neither Both

0 1 2 3 4 5

Lean Startup Lean Agile

Experience with Agile, Lean, Lean Startup

Business Model Canvas

What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?

Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?

For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?

For whom are we creating value?Who are our most important customers?

What type of relationship does each of our CustomerSegments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?

What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?

What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?

Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?

What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?

Day Month Year

No.

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/

or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

http://glennas.wordpress.com/2010/07/31/business-model-innovation-alexander-osterwalder/

Lean Canvas

“This is not the kind of entrepreneurial question you can ask or expect an answer to in a focus group. Customers often don't know what they want.”

Different Perspectives on Organization Structure

The Hierarchical Perspective !  Is your organization is a

reflection of what it says in the Organization Chart? !  A collection of titles and

functional areas?

The Social Network Perspective !  Is your organization the set

of diverse relationships that cross functional boundaries?

The Information Flow Perspective !  Is your organization

represented by the currents of information that flow through the network?

Remember: (1) All models

are wrong, but some are useful

(2) More than one thing can be true

Technical Debt

Investment Strategy

Technical Debt Quality Debt Features Spike Tests Research Planning

Pay your debts, or else…

Technical Debt Quality Debt Features Spike Tests Research Planning

Consequences beyond Release 1

0

2

4

6

8

10

12

Release 1

Release 2

Release 3

Release 4

Features Technical Debt Quality Debt

Management Debt

Value Stream Map

Value Streams ! Whole products or systems ! Product lines ! Portfolios ! Cross-cutting portfolio or product line elements

Manage WIP

D.#G.#Reinertsen,#“The$principles$of$product$development$flow$:$second$genera8on$lean$product$development”.#Redondo#Beach,#Calif.:#Celeritas,#2009.###S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#Review,#vol.#90,#pp.#84G94,#May#2012#

Planned Ready In Progress (3)

Done

This is our Ready policy. Thanks for reading.

Request Queue (Backlog)

This is our Planned policy. We will plan something when ….

We will start work on something when ….

Work Items are declared ‘Done’ when ….

Understanding Lead Time and Cycle Time

http://stefanroock.wordpress.com/2010/03/02/kanban-definition-of-lead-time-and-cycle-time/

Cumulative Flow Diagrams

The Seven Wastes of Manufacturing

The Seven Wastes of Software Development

Wastes in Software Development

!  Inventory ! Extra Processing ! Overproduction ! Transportation ! Waiting ! Motion ! Defects

! Partially Done Work ! Extra Processes ! Extra Features ! Task Switching ! Waiting ! Motion ! Defects

Waste elimination and continuous improvement applies even more to

high-performing teams and organizations

PDSA •  Follows the steps of the

Scientific Method •  Plan: develop a hypothesis or

experiment •  Do: conduct the experiment •  Study: collect measurements •  Act: interpret the results and

take appropriate action

• Also known as •  PDCA •  The Deming Cycle •  The Shewart Cycle

Plan

Do Study

Act

Lean Thinking with A3 Focus Problem Solving Proposal Writing Project Status Review

Thematic content or focus

Improvements related to quality, cost, delivery, safety, productivity, etc.

Policies, decisions, or projects with significant investment or implementation

Summary of changes and results as an outcome of either problem solving or proposal implementation

Tenure of person conducting the work

Novice, but continuing throughout career

Experienced personnel; managers

Both novice and more experienced managers

Analysis Strong root-cause emphasis; quantitative/analytical

Improvement based on considering current state; mix of quantitative and qualitative

Less analysis and more focus on verification of hypothesis and action items

PDCA cycle Document full PDCA cycle involved in making an improvement and verifying the result

Heavy focus on the Plan step, with Check and Act steps embedded in the implementation plan

Heavy focus on the Check and Act steps, including confirmation of results and follow-up to complete the learning loop

From Table 5.1 from “Understanding A3 Thinking”

John Clifford, Construx http://forums.construx.com/blogs/johnclif/archive/2009/09/30/if-you-want-to-improve-stop-managing-your-problems.aspx

Applications of A3 Proposal Writing ! Create a Value Stream Manager role to help with Portfolio

Backlog Management ! Align all products and components on a quarterly commit

cadence ! Ensure architecture consistency across multiple product lines

Applications of A3 Problem Solving ! Reduce Cycle Time for Portfolio Architecture Analysis ! Reduce Product delivery cadence from 6+ months to 3

months ! Reduce the Lead Time for high priority customer requests

Use Lean Management Thinking ! Use A3 Problem Solving reports to help people develop as

Value Stream Managers !  Improve their Problem Solving skills ! Help people learn how to navigate the organization

Creativity needs space to develop

Creativity needs space to develop

Where do good ideas come from? “Chance favors the connected mind”

YouTube Video

5 Ways to Foster Innovation and Learning Now

Do try this at home (and work)

Give yourself and your team space to think

Absorb ideas from many influences

Play time

Conduct safe-to-fail experiments

Be prepared to pivot

Jazz Improvisation ! Provocative competence: Deliberate efforts to interrupt

habit patterns ! Embracing errors as a source of learning ! Shared orientation toward minimal structures that allow

maximum flexibility ! Distributed task: continual negotiation and dialogue

toward dynamic synchronization ! Reliance on retrospective sense-making !  "Hanging out": Membership in a community of practice ! Taking turns soloing and supporting

“Creativity and Improvisation in Jazz and Organizations: Implications for Organizational Learning” - Frank J. Barrett "Organization Science" / Vol 9, No.5. September-October 1998

The companies that are starting up now have the potential to save the world. Someone has to; why not you?

“The criminal waste of human creativity and potential”

For all our vaunted efficiency in the making of things, our economy is still incredibly wasteful. This waste comes not from the inefficient organization of work but rather from working on the wrong things – and on an industrial scale. … It is hard to come by a solid estimate of just how wasteful modern work is.

Create Awesome Products

Create Awesome Service

Create Awesome Places to Work

Life is Short, Time is Precious Our Lives are at Stake

Thank You!