Kanban  for    Por*

olio  Problems  

LSSC 2012

Kanban: Thinking tools for portfolio-level problems

Mike Burrows (@asplake)

mike@djaa.com http://positiveincline.com

Kanban  for    Por*

olio  Problems  

Why “Portfolio-level problems”?

n  Tes$ng  the  Kanban  Method  as  a  thinking  tool  n  Less  about  offering  solu$ons  to  copy  n More  about  framing  &  solving  problems  

n  Idea  &  experience  sharing  n  Good  &  bad  n  Contextual  

n  Vision  

Kanban  for    Por*

olio  Problems  

Typical scenario §  Organisation

§  Functional, hierarchical, not co-located, part outsourced

§  Defined life cycle

§  Well observed

§  Specs, signoffs

§  Cross-functional appetite for improvement, resourced

§  Many fixed-date projects §  Remaining durations of many months

§  Very low confidence of date compliance

Kanban  for    Por*

olio  Problems  

Cole sees dead people

Kanban  for    Por*

olio  Problems  

Cole sees dead people

I  see  enterprise-­‐scale  problems  of  overwhelming  WIP,  ins$tu$onalized  at  every  level  of  the  organisa$on  

Kanban  for    Por*

olio  Problems  

Characteris$cs  of  typical  top-­‐down  solu$ons  to  porIolio  level  problems  

n  Narrow  

n  Compliance-­‐driven  

n  Push  

n  Disconnect  between  person  &  system  n Disrespect  

Kanban  for    Por*

olio  Problems  

n  “We  don’t  know  what  each  person  is  working  on”  n So  allocate  them?  

n  “We’ve  no$ced  that  people  are  too  busy  on  too  many  things”  n So  add  some  front  end  process?  

Scaling  up  has  its  issues  too  

Kanban  for    Por*

olio  Problems  

No  maPer  how  narrow  you  make  the  funnel  or  how  fine  you  make  the  filter…  

...the  pipeline  will  remain  full  

Kanban  for    Por*

olio  Problems  

PorIolio  level  problems  

n  They’re  very  real  

n  From  all  sides,  solu$ons  that  don’t  help,  miss  the  point  or  make  things  worse  

Kanban  for    Por*

olio  Problems  

The  6  Kanban  prac$ces    –  are  they  even  relevant  here?  

1. Visualize

2. Limit work-in-progress

3. Manage flow

4. Make process policies explicit

6. Improve collaboratively (using models) 5. Implement feedback loops

Kanban  for    Por*

olio  Problems  

The  6  Kanban  prac$ces    –  are  they  even  relevant  here?  

1. Visualize

2. Limit work-in-progress

3. Manage flow

4. Make process policies explicit

6. Improve collaboratively (using models) 5. Implement feedback loops

Kanban  for    Por*

olio  Problems  

1. Visualize

n  Visualize  work  n Projects1  n Non-­‐projects  

n  Demand  &  supply  

n  Flow,  delivery    

1Disclaimers  apply  

Kanban  for    Por*

olio  Problems  

2. Limit work-in-progress

n  PorIolio  constraints  designed  to  generate  flow  &  provoke  improvement  n Number  n Size  ($,  dura$on  expected)  n WIP  ($,  elapsed  incurred)  n Burn  rate  n Delivery  intensity  /  smoothness  n Cost  of  Carry  

Kanban  for    Por*

olio  Problems  

At  both  extremes  of  scale,  limi$ng  by  number  is  very  effec$ve  

n  #  of  developer-­‐level  work  items  

n  #  of  ini$a$ves  

Kanban  for    Por*

olio  Problems  

At  intermediate  scales,  visualizing  or  limi$ng  by  number  is  less  help  

n  Projects  vary  in  size  by  orders  of  magnitude  

n  Volume  

n  Not  everything  is  (or  should  be)  a  project  

Kanban  for    Por*

olio  Problems  

Some  relevant  $$  measures  for  single  projects  

J F M A M J J A S O N D Burn

1 2 3 4 5 6 7 8 9 10 11 12 WIP

J F M A M J J A S O N D Cost of Carry (cumulative)

n  Leverage  what  you  have  now  

n  Derive  or  es$mate  before  adding  new  tracking  

Kanban  for    Por*

olio  Problems  

Size:  cost  *  dura$on  

Duration

Cos

t n  You  probably  want  to  penalize  both  

n  You  might  wish  to  trade  them  

Kanban  for    Por*

olio  Problems  

More  ques$ons  of  cost  *  $me  

n  Where  is  the  inventory  that  we  should  help  out  of  the  door?  

n  Which  projects  should  we  try  hardest  to  split?  

n  Where  has  our  posi$on  worsened  unexpectedly?  

n  What  is  my  porIolio  cycle  $me?  n  By  IT  or  business  stream?  n  By  class  of  service?  

n  What  is  our  inventory  cos$ng  to  hold?  

Kanban  for    Por*

olio  Problems  

Cost  of  Carry  

n  Cost  *  rate  integrated  over  $me  

n  Roughly  propor$onal  to  cost  *  dura$on  

n  Apply  a  meaningful  rate  that  reflects  both  financing  and  delay  costs  n  >>  your  cost  of  funds  n  >  25%  p.a.  (Reinertsen)  n  >  2  *  your  hurdle  rate  (me)  n Risk-­‐adjusted?  

Kanban  for    Por*

olio  Problems  Limit to capacity

Many  of  these  measures  can  be  aggregated,  sliced  &  diced  

J F M A M J J A S O N D

Analyse Design Build Test

Limit this… to limit this

Kanban  for    Por*

olio  Problems  

3. Manage flow

n  Visual  management,  DSS  n  See  inventory  &  its  cost  n  See  flow  as  inventory  turnover  n  See  bright  spots,  rough  spots  what’s  dragging,  where  to  intervene  

n  Time  dimension,  backwards  &  forwards  

n  A  support,  not  a  subs$tute  for  leadership  n  An  organiza$onal  feedback  mechanism,  “tension”  for  improvement  

n  Make  the  most  of  what  you  have  now  

Kanban  for    Por*

olio  Problems  

@alhui  nails  it  

n  Provide  just-­‐in-­‐$me  informa$on  to  promote  market  liquidity  and  buyer  decision-­‐making  #lssc12  

n  Money  is  not  our  currency.  It's  not  scarce  enough.  Time  and  effort  are  our  unit  of  currency  #lssc12  

Kanban  for    Por*

olio  Problems  

My  hope  is  that  these…  

1. Visualize

2. Limit work-in-progress

3. Manage flow

4. Make process policies explicit

6. Improve collaboratively (using models) 5. Implement feedback loops

…lead  to  these  

Kanban  for    Por*

olio  Problems  

But  first  these…  

Agreement

Respect

Leadership

Understanding

Kanban  for    Por*

olio  Problems  

Cole sees dead people

I  see  enterprise-­‐scale  problems  of  overwhelming  WIP,  ins$tu$onalized  at  every  level  of  the  organisa$on  

Kanban  for    Por*

olio  Problems  

To:  kanbandev  Subject:    #ppm  <subject>    Your  problems,  thoughts,  experience  

Kanban  for    Por*

olio  Problems  

Thank you.

Questions?

Mike Burrows (@asplake) mike@djaa.com

http://positiveincline.com