Deliver Value: Lean Kanban for Portfolio Prioritization

Ram SrinivasanLean - Agile Coach and Trainer

http://linkedin.com/in/ramvasan

@ramvasan

I Help Clients with Product Discovery, Product Management, Portfolio Alignment, Process Consulting, and Organizational Coaching

What is Portfolio Planning?

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Challenges in Portfolio Management

● Firefighting - reactive execution● Unstable, unclear, incomplete requirements● Insufficient alignment and coordination of extended

enterprise● Processes are locally optimized and not integrated for

the entire enterprise● Unclear roles, responsibilities and accountability● Mismanagement team competency and knowledge● Insufficient planning● Improper metrics, metric systems and KPIs● Lack of proactive risk management● Poor acquisition and contracting practices

System Thinking Perspective

Insufficient Planning

Improper metrics, metric systems and KPIs

Insufficient Alignment and Coordination of the

Enterprise

Mismanagement of Competency and

knowledge

Unclear Roles, Responsibilities and

Accountability

Poor Acquisition and Contracting Practices

Unstable, Unclear and Incomplete Requirements

Lack of Proactive Risk Management

Process Locally Optimized and Not Integrated

Firefighting

Dave Snowden's Cynefin Framework

Disorder

Project Type Characteristics Leader’s Job

Chaotic

High TurbulenceNo clear cause and effectUnknowablesMany decisions and no time

Immediate action to reestablish orderPrioritize and select actionable workLook for what works than perfectionAct, Sense, Respond

ComplexMore unpredictability than predictabilityEmergent answersMany Competing Ideas

Create bounded environment for actionIncrease interaction and communicationServant leadershipGenerate ideasProbe, Sense, Respond

ComplicatedMore predictability than unpredictabilityFact based managementExperts work out wrinkles

Utilize experts to gain insightsUtilize metrics to gain controlSense, Analyze, Respond

Simple

Repeating patterns, consistent eventsClear cause and effectWell established knownsFact based management

Use best practicesExtensive communication not necessaryEstablish patterns, optimize themCommand and Control

Source: “Leadership framework for Decision Making” - Snowden and Boone, HBR 2008

Managing Complexity - Leader’s Job

Deliver Value: Understand Principles

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

Origin of Lean Thinking - TPS

Lean Thinking - Principles

● Optimize the Whole● Focus on Customer● Energize Workers● Eliminate Waste● Learn First, Decide Last● Deliver Fast● Build Quality In● Keep Getting Better

Kanban Method

● Visualize Work● Limit Work in Progress● Measure and Manage Flow● Make Process Policies

Explicit● Implement feedback loop● Improve collaboratively,

evolve experimentally

Optimize the Whole - Value Stream Maps

References: http://leadinganswers.typepad.com/leading_answers/2011/09/pmi-acp-value-stream-mapping.html http://www.rmcproject.com/pmi-acp/pdfs/PMI-ACP%20Chapter%203.pdf

Three Projects, Three Experiments !!!

Project 1: 1, 2, 3, …. 30Project 2: a, b, c, d, ….ZProject 3: 2, 4, 6, ….54

Question to Ponder Over...If the cost of execution per unit time (day,week) is the same, what would stakeholders prefer?

A. Shorter Cycle Time - 40% utilization, working one project at a time, projects delivered in a shorter time, one after another?

B. Higher Utilization - 95% utilization, working on multiple projects at a time and projects taking longer to complete?

Lean Thinking - Wastes

● Overproduction of Information● Waiting● Unnecessary Movement of Information● Over-Processing of Information● Inventory of Information● Unnecessary Movement of People● Rework, Defects● Loss of Tactical Knowledge/Skills

Portfolio Planning Strategy

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How Should We Compare Variables?

Focus on Lifecycle Profits

Cost of Delay Profiles

WSJF based on CoD and Duration

Project Duration Cost of Delay(CoD) Weight = CoD/Duration

1 1 10 10

2 3 3 1

3 10 1 0.1

Accuracy vs. Precision

Estimate with Relative Sizes

100%

50%

0%

Effort

Ret

urns

on

Effo

rt In

vest

ed

XS S M L XL XXL

Portfolio Planning Strategy

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Economic Filters

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Manage Project Arrival and Departure Rates

Class of Service- Policies & Capacity

Analysis Planned In Progress Deployed

Expedite Standard Fixed Date

Embracing Emergent Opportunities

Smaller Projects, Frequent Releases

Smaller Projects, Frequent Releases

Portfolio Planning Strategy

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Limit WIP - Focus on Throughput (Not Utilization)

Cycle Time as a Function of Utilization and Batch Size

Trashing

{{High Performing Teams

Reference: Lean Software Development by Mary and Tom Poppendieck

Complete Engaged Teams With Multi-Skilled Team Members

Maximize flow & Value Delivery - Long Lived Empowered Cross Functional Feature Teams

Portfolio Planning Strategy

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Profit vs. Marginal Profit

Reference: The Principles of Product Development Flow by Donald Reinertsen

Marginal Economics - Other Concepts

● Throughput Accounting■ Increase Throughput, Reduce Inventory, Reduce

Operating ExpenseNet Profit (NP) = Throughput – Operating Expense Return on Investment (ROI) = Net Profit / Investment TA Productivity = Throughput / Operating Expense Investment turns (IT) = Throughput / Investment

● Software Capitalization● Beyond Budgeting ● Ignore Sunk Costs

Portfolio Planning Strategy

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References

email@ramvasan.com

http://ramvasan.com

http://linkedin.com/in/ramvasan

@ramvasan

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