This document discusses key concepts of lean thinking and agile practices. It covers the history of lean principles, value thinking over productivity metrics, management focusing on coaching teams rather than command and control, forming cross-functional swarms instead of individual superstars or siloed teams, and how waste reduction can free up capacity equivalent to additional teams. Slack is discussed as necessary for learning and improvement rather than just maximizing output in the short-term. The document provides context around applying lean concepts from manufacturing to knowledge work and software development.

1. Agile Vancouver
The Lean Thinking Organization
Lawell Kiing April 2012
Senior Dir Engineering, SAP

2. Lean Thinking
1. History/background
● Lean principles
2. Value thinking
3. Management in Lean
4. Super stars vs. team vs. the SWARM
5. The devastating impact of waste
6. Slack thinking

3. History and Background
History of management
● Importance to human development
● Limits when applied to knowledge work in a complex ecosystem
● Organization as machine versus organization as organism
How Lean in software differs from Lean in manufacturing
● Continuous design cycle
– Manufacturing: design then build
– Software: design, implement, test, repeat…
● Creative human endeavor with limited physical bounds
– Tools bench means very different
– Inventory means very different

4. Lean Transformation
"This transition from an agrarian and craft-based society to an
industrial economy required an epical re-socialization of the
work force. Unruly and independent-minded farmers, artisans
and day laborers had to be transformed into rule-following,
forelock-tugging employees. 100 years on, this work
continues, with organizations around the world still working
hard to strap rancorous and free-thinking human beings into
the strait-jacket of institutionalized obedience, conformance,
and discipline.” - Gary Hamel

5. Lean House

6. Lean Principles

7. Value Thinking
How is productivity calculated in a typical software shop?
-Amount of code written
-Number of defects fixed
-Number of features implemented and/or delivered
-Number of specifications written
-Speed of delivery
-Speed of changes accepted (“agility”)
“Productivity is a measure relating a quantity or quality of
output to the inputs required to produce it. Often means labor
productivity, which is can be measured by quantity of output
per time spent or numbers employed. Could be measured in,
for example, U.S. dollars per hour.” – economics.about.com
But does this make any real sense?

8. Value Thinking

9. Value Thinking
Concept to Cash
•Denotes as simple as it gets the entire value chain
•If it does not ultimately deliver value to the customers so that
they pay cash for it, then it is literally waste
•With that thinking in mind, all previous metrics have to be re-
examined
•With value being core, than the “numbers” metrics have an
opposite effect
•E.g. a team that writes 100,000 LOC which contains 50
features vs. a team of equal size that writes 10,000 LOC that
contains 10 features would be considered more productive in
the previous metric.
•But with value in the equation, if each team‟s product is used
by its customers with only 10 features fully utilized (delivering
value), then the second team would instead be considered
more productive

10. Management in Lean
Software on its own is a very young industry
Management is often promoted because of their technical
abilities, not management

11. Management in Lean
But that is not a scalable model. In most instances, because
they are technologists, not managers, most high tech
companies have “low-tech” people structures

12. Management in Lean
Lean/Agile does not dictate what management structure is
like, but it clearly calls for different principles and viewpoints
between team and management.
Management:
•Mentoring, teaching, thinking, coaching, spread
knowledge, develop people, go see, etc…
People:
•Long term great engineers, entrepreneurial chief product
manager, team/individuals continue to evolve their own
practices and improvements, cross-functional, etc…

13. Management in Lean

14. Management in Lean
Mike Cohn – CDE: Container, Differences, Exchanges
● Leveraging structure, influences and conversations rather than
command-n-control
New Thinking
● “Managers build teams, teams build software”
● “Managers complete their teams, not compete with their teams”
● Differences between working on the business vs. working in the
business
– Working in the business creates today
– Working on the business creates tomorrow

15. Superstars, team and SWARM
How are most teams shaped in Lean/Agile?
•Many retain what they have before
• Superstars – team is really the few superstars (or just the one)
• Team – developers and testers, but mostly working on their own
• Component based - un-clear value, handoffs necessary
•Lean asks for cross-functional teams

16. Lean Cross Functional Team
Cross Functionality
Overall Team Skills
● Delivers functional value
● Employs a diversity of ideas
● Fosters common end-to-end understanding
● Increases flexibility of individuals and teams
● Allows for different kinds of experimentation
Favoring Generalizing Specialists
● One or more fields of expertise
● General knowledge of software developmentMe today Me in 2 years Me in 5 years
● General knowledge of business domain
● Actively seeking to gain new skills
© SAP 2010 / Page 16

17. SWARM
But even with cross-functional teams, you can wind up with
waterfall
Business as usual:
•Each developer(s) pick up a feature, works till about mid-sprint,
then testers pick them up and rushes to get them all tested and
bugs fixed
•What’s wrong with this picture: handoffs, delays, working on
lowest value, testers flow, silos and possible nothing is DONE
SWARM:
•Swarm the team on the highest priority item until it is DONE
•Then start on the next one
•Experts rotate from item to item

18. Devastating Impact of Waste
For Lean, there are 7 main wastes:

19. Devastating Impact of Waste
However, waste is now part of our development cycles.
•It is expected and accepted
•It is used as an indicator when things are finished
•It is used to measure productivity and even success
•It is even celebrated
But what is true impact (Lean Thinking):
•It bothers the customers, a LOT!
•It is completely unpaid work
•It causes very uneven loads/batches, can cause massive overtime
•It takes away your ability to do new work, slows you down
• My example, if we reduced just 5%, we could have gained the
equivalent of a team of 90 people
•It promotes completely the wrong behavior

20. Devastating Impact of Waste

21. Slack Thinking
The key to management success is that every ounce of
capacity is used in production
•The more production is done in even less capacity, the higher the
reward
•But this is false thinking and can lead instead of things slowing
down or waste creation
•Such examples as:
• sub-optimization
• queues
• push mode
• no slack

22. Slack Thinking
Slack really takes a mindset change
•The concept of having slack in the system to increase efficiency is
counter intuitive
•But in practice, no slack cost the following:
• No feedback, measurements and retrospectives
• No learning and development
• No sharing of information and knowledge
• No improvements
• No risk prevention/management
• No waste management
•It often results in:
• “I am too busy fixing the problem to be fixing the PROBLEM”
• “Penny wise, pound foolish”

23. Final Thoughts
“It's not the strongest that survive, nor the most intelligent, but
the one most responsive to change.” – some professor
“You must be the change you want to see in the world.” -
Gandhi
“Leadership is not something you do to people, it is something
you do with people.”
“Of the best leaders, when the job is done, the task is
accomplished, the people will say „We have done this
ourselves.” - Lao Tzu 500 BC

24. “It's not the strongest that
survive, nor the most
intelligent, but the one
most responsive to
change.”
– some professor

25. Thank You
Lawell Kiing
Senior Director Engineering
SAP Canada
Lawell.kiing@sap.com