Lean Management System
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Most lean-agile transformations are missing a critical ingredient to sustain their improvements: a Lean Management System. A Lean Management System is an approach to running an organization that can not only sustain the improvements from their lean transformation but continuously improve as well.
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Lean Management System
- 1. Lean Management System Agile Austin - Agile Leaders SIG Leland Newsom October 7, 2016 10/7/2016 1
- 2. True North People Systems Standard Work Visual Controls Leader Standard Work Accountability / Transparency Systems Lean Management System 10/7/2016 2
- 3. Psychological Safety is #1 10/7/2016 3
- 4. VersionOne 10th Annual State of Agile Survey 10/7/2016 4
- 5. VersionOne 10th Annual State of Agile Survey continued 10/7/2016 5
- 6. SAFe House of Lean 10/7/2016 6
- 7. Lean Enterprise Academy – Lean Transformation Model 10/7/2016 7
- 8. True North People Systems Standard Work Visual Controls Leader Standard Work Accountability / Transparency Systems Lean Management System 10/7/2016 8
- 9. The three leadership elements create a closed-loop system that creates process focus and extends new habits to build a culture of continuous improvement. • Focus of leadership shifts from delivery only to delivery + growing the capabilities of the organization. DELIGHTED CUSTOMERS Process / Value Flow Visual Controls Transparency/ Accountability Leader Standard Work Changing Culture with Lean Leadership 10/7/2016 9
- 10. Making Lean Management Go Original image taken from: Creating a Lean Culture, Third Edition by David Mann 10/7/2016 10
- 11. True North People Systems Standard Work Visual Controls Leader Standard Work Accountability / Transparency Systems Lean Management System 10/7/2016 11
- 12. Visual Controls – The Transmission The primary purpose of visual controls is to focus on the process and the flow of value to the client. − show process abnormalities and opportunities so the teams can take appropriate action. − Should provide error proofing. − Measure and show progress of how valuable software flows through the process. 10/7/2016 12
- 13. Tiered Visual Management Systems Team – Have the most power to affect component or “project” level metrics Manager/Director – Have the most power to affect tactical execution and influence LOB product direction Executives – Have the power to affect organizational issues, budgets, and strategy 10/7/2016 13 Agile Metrics in Action Christoher W. H. Davis 2015
- 14. SDPI - Balanced Metrics 10/7/2016 14 Get the report at: https://www.rallydev.com/finally-get-real-data-about-benefits-adopting-agile?nid=6201
- 15. Control Chart - LeanKit 10/7/2016 15
- 16. 10/7/2016 16
- 18. True North People Systems Standard Work Visual Controls Leader Standard Work Accountability / Transparency Systems Lean Management System 10/7/2016 18
- 19. Leader Standard Work – The Engine VP Standard Work MD/Mgr. Standard Work Team Standard Work Purpose: Provides a structure and routine that helps shift from a sole focus on value delivery to a dual focus on value delivery and building the capabilities of the organization. − Allows leaders to get the routine tasks taken care of with less mental energy, leaving them free to focus on improvements and building the capabilities of the organization. − Provides a way to sustain and extend improvements by updating the standard work as kaizen events occur. − Overlapping elements in leader standard work across levels supports the integrity of the process. Guidelines 1. Focus on activities and behaviors that demonstrate leading with respect. 2. Make development and coaching a central theme. 3. The higher the level of the manager, the more strategic the focus will be. Strategic Focus Tactical Focus 10/7/2016 19
- 20. Leader Standard Work - Example 10/7/2016 20
- 21. True North People Systems Standard Work Visual Controls Leader Standard Work Accountability / Transparency Systems Lean Management System 10/7/2016 21
- 22. Accountability/Transparency- The Steering Wheel and Gas Pedal Sets direction and pace. Ensures that focus on process leads to action to improve it. Daily Standup Kanban Board Gemba walk – Go see, ask why, show respect − Have a purpose for the walk − Focus on flow and value delivery − Look for wastes (Defects, Over Production, Waiting, Non-utilized talent/resources, Transportation, Inventory, Motion and Excess Processing) Observations from the visual controls and Gemba walks are converted to assignments for action − Follow up occurs regularly (daily standup) to track progress 10/7/2016 22
- 25. True North People Systems Standard Work Visual Controls Leader Standard Work Accountability / Transparency Systems Lean Management System 10/7/2016 25
- 26. True North True North defines the strategic objectives of an organization. − defines the outcomes of the system and where we want the system to take us in the future − define direction, purpose and values Hoshin Kanri and “catch ball” − Hoshin Kanri is a strategic planning process. "Hoshin" meaning shining needle or compass. Kanri means management or control − Is a process for embedding strategy and aligning an organization toward common goals. − “Catch ball” is a negotiation process where goals, strategies, action items, and measures are tossed back and forth between management and employees to gain consensus and focus. 10/7/2016 26
- 28. X-Matrix Hoshin Kanri cont. 10/7/2016 28
- 30. Strategy deployment is a negotiation process is known as “catchball,” because the “ball” of strategy is tossed back and forth from team to team until a final consensus is reached about what needs to be done and how to do it. 10/7/2016 30
- 31. True North People Systems Standard Work Visual Controls Leader Standard Work Accountability / Transparency Systems Lean Management System 10/7/2016 31
- 33. Management by Objective Management by Objectives Strategy Deployment Top Down (unidirectional) Built both top down and bottom up (catchball) Focuses on rear-view mirror results Concentrates resources on key priorities Little effort to understand or improve the system or process Controls means and methods, not just results Usually based on calendar for performance review cycles (annual, bi- annual, quarterly reviews) Continuous/Frequent reviews up & down the org chart. Not based on the calendar Often unlinked (individual goals not tied to strategic objectives) Linked to the strategic objectives Tied to performance appraisals (carrot or whip) Not tied to performance appraisals Focus on profits/delivery. Adding value to shareholders. Voice of the Customer (VOC), not just profit/delivery goals 10/7/2016 33 Strategy Deployment
- 36. True North People Systems Standard Work Visual Controls Leader Standard Work Accountability / Transparency Systems Lean Management System 10/7/2016 36
- 37. Standard Work Standard work answers the who, what, where, when, why, and how. − Who operates this process? − What are the quality check points? What does the final product look like? − Where is this process completed? − When will it be done? − Why is this step necessary? Why is this a quality check point? Why is this a value- adding? − How is the process followed? How do I know the process is followed? How do we measure success? Standard work is a collection and implementation of best practices known at that point. − Update Standard work as improvements are made. Update work instruction documents, training, onboarding, and practice. Standard work incorporates what is needed to start the process and the finished state of the process. Standard work should always be questioned and improvements sought. 5S – Sort, Set in Order, Shine, Standardize, Sustain 10/7/2016 37
- 38. Standard Work Provides structure and routine to build the capabilities of the organization that sustain and extend improvements. Without standardization, incremental improvements may be lost with time. 10/7/2016 38
- 40. PDCA Loop True North People Systems Standard Work Leader Std. Work Visual Controls Accountability Systems 10/7/2016 40
- 41. 10/7/2016 41
Notes de l'éditeur
- Why is LMS important? What is a manager’s job in a lean-agile organization? How do you sustain your improvements made and not let cultural inertia pull the teams back into their old way of doing things? These six elements create an organization that can not only sustain the improvements from their lean-agile transformation but also keeps a focus on continuously improving and how the manager can serve the teams.
- Maslow’s hierarchy of needs Safety is just above the physiological needs (food, water, etc.) Modern Agile says “Make Safety a prerequisite” Manager’s #1 responsibility is to remove fear from the org. People are at the heart of everything we do. Respect people is a key element of any lean system. Respecting people means to create an environment that allows everyone to reach his/her full potential. That includes a system that wipes out chaos, fear, and ambiguity in favor of one that Builds trust. Trust requires safety Establishes a culture in which people feel safe speaking up Safe to experiment and learn Encourages, enables and provides opportunities for learning and growing What are you doing to make a safe environment for your teams?
- For CY2015 Culture and lack of management support continues to dominate the top causes of failed agile projects. 2 of top 5 are because of culture 2 of top 7 are because of management
- Concerns about culture and management continue to lead the results: Top item is ability to change organizational culture 3 of the top 8 about management Why is culture and management support so high on the list and what can we do to change it? We’ve asked teams to change how they work, but what about management’s roles? How has the management team’s roles changed to support the teams in their agile journey? Are managers still following the MBO approach that Peter Drucker first wrote about in 1954 (62 yrs old)? Are managers only focused on projects and “resources”? How do managers help support the changes needed to change the culture to further the agile adoption if they are still following old practices? What new practices have we put in place to extinguish old behaviors and how have we sustained those changes instead of falling back into the old cultural inertia (“how we do things around here”)? We’re asking the development teams to change how they work but what about managers?
- Foundation – Leadership What does “Management applies and teaches Lean thinking” mean? 1st column – respect for people and culture Respect People Build trust To change the culture, change the org The Goal: Value Shortest, sustainable lead time Best quality and value High morale Safety Customer delight Now that we have a definition of what value is, we can start to build our metrics to measure value.
- Notice Management System / Leadership in the middle - What leadership behavior and management systems are required for this?
- Primary elements of a LMS to sustain improvement gains
- Learning new habits requires consistent positive reinforcement of the new habits. LMS gives structure to provide the constant focus on the new habits.
- Shows how they all work together and are not meant stand alone. LSW is the engine that powers the system. Transparency is the gas pedal and steering wheel. It sets direction and pace of the improvements Visual controls are the transmissions and converts the driving force of the LSW into traction. Discipline is the fuel that powers the system. Without the disciple (fuel) the system will go no where. Continuous adherence is needed to sustain to changes.
- If you’re going to start building your own system, start with visual controls. Pick metrics and visual controls that tie into your goals of your lean-agile transformation. Metrics that give a way to look inside at how value is flowing through the system
- Visual indictors that inspire you to take action and provides error proofing Sign doesn’t just say low bridge ahead, it has error proofing built in that will inspire a driver to take action.
- Team metrics – things like cycle time (or velocity), lead time, defect trends, business value Manager/Director – metrics like time to market, release, innovation rates, quality, predictability Executives – budget, progress against strategic goals, client satisfaction, etc.
- The Software Development Performance Index. The SDPI framework includes a balanced set of outcome measures. These fall along the dimensions of Responsiveness, Quality, Productivity, Predictability. Each of these are opposing forces. Its unlikely any team will excel at all of them. Increasing productivity beyond team capability will likely cause a decrease in quality. Responding faster likewise, could mean corners are cut on quality. Track data trends in each area will help the team improve. Focus metrics on end goal Highest priority is to satisfy the customer through early and continuous delivery of valuable software Working software is primary measure of progress Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale. SAFe House of Lean: Goal: Value – Shortest sustainable lead team. Best quality and value. Customer delight. Quality: Escaped defect counts, defects carrying over sprints, defect age, code coverage % Productivity: Throughput, Release frequency, Business value delivered, WIP trends Responsiveness: Lead Time (Customer and Team), Cycle Times Predictability: Standard deviation of cycle time
- In addition to showing the team’s average cycle time (17.5 days), the chart includes three standard deviations to help predict if the team will complete a work item within a certain timeline: 68% of the time, the team will finish a work item within 35.5 days. 95% of the time, the team will finish a work item within 54.5 days. 99% of the time, the team will finish a work item within 89.7 days. The key to using a predictability chart is to take the range of possible delivery dates and apply them to your team’s work. Then, when you’re asked to provide an estimate of how long something will take, you can turn to the chart — instead of making an arbitrary guess. With about 70% certainty, you can say that your team can finish a work item in about 36 days. For a higher level of certainty, you know you need to start a work item about 55 days before it must be delivered. In contrast to estimates, using historical date ranges can give teams and their stakeholders a more realistic view of their anticipated cycle time.
- Development team builds things, Leaders build people (leaders develop leaders) Should place attention on developing people and building the problem solving ability of the org. Are leaders developing people Pushing decisions down to the teams Removing roadblocks Engaged in Continuous Improvement and fixing the root of the problems
- Intent based leadership. Growing capabilities of the team. Learn, teach, coach
- Who’s working on what Can see direction and pace
- Start with Visual Controls. As improvements are made, update the Leader Standard Work or Standard Work to the new standard. Use the visuals controls and gemba walks to ensure new standard is followed.
- "True North" is a key concept in Lean process improvement. It is an idiom that emerged from Toyota twenty years ago, connotes the compass needle for Lean transformation. True North works as a compass proving a guide to take an organization from the current condition to where they want to be. It might be viewed as a mission statement, a reflection of the purpose of the organization, and the foundation of a strategic plan. Catchball involves the teams in creating the strategy and the tactics for achieving the strategy. Together these build transparency and trust from the teams.
- The X-Matrix approach Strategy (3-5 year objectives) Tactics (annual objectives that move us toward achieving the 3-5 yr objectives) Process (How to achieve the yearly objectives) Results (how do we measure our progress) Who has primary and secondary responsibility
- Example of an X-Matrix implementation.
- A form of respect people If a process involves people doing the work, involve the people doing the work. Leaders “toss” ideas or objectives to level below That returns the ball with their input and ideas Continue to pass ball back and forth and down until goals and objectives have cascaded across the org Everyone has a clear understanding of the objectives because they provided input in the process
- Leaders build people (leaders) not things. Build high performing teams Quality People Value Stream feeds into how leaders attract, development, engage, and inspire exceptional people to continuously improve (Outputs). Attracting talent – think of your hiring process for developers. Is the first contact to send them to hacker rank to do a coding challenge? Or could you treat them with respect and let them talk to someone and maybe even have them do a pair programming session with the same problem? - Which would engage you more and which would turn you off from the company?
- How many still do MBO as part of an annual review process? Does that process measure teams or individuals against their teammates? Google uses a “newer” model of MBO called OKR-Objectives and Key Results. MBO was introduced by Peter Drucker in 1954 (62 yrs old) and perfected in the 1960’s. The first formal description of the waterfall model was a 1970 (46 yrs old) article by Winston Royce.
- Does your performance management and rewards pit people against each other? Does it create an environment where someone at the company must lose? Rewards should not encourage internal competition or create an environment where another employee must lose. Instead they should pit your people against external forces, like your competitors. Ester Derby says, “Vague statements and labels, one-sided evaluations, surprises, and secondhand complaints” are the problem with the annual review process. In his “Out of Crisis” book (1989), Deming said the evaluation of performance, merit rating, or annual review is one of the seven deadly diseases in organizations. When asked he suggested doing what Peter Scholtes suggests in his book, “Total Quality or Performance Appraisals: Choose One”. Focus on systems, processes, and methods – not individual workers (safety). For decades, General Electric practiced a rigid system, championed by then-CEO Jack Welch, of ranking employees. Formally known as the “vitality curve” but frequently called “rank and yank,” the system hinged on the annual performance review, and boiled the employees’ performance down to a number on which they were judged and ranked against peers. The company got rid of formal, forced ranking around 10 years ago. But now, GE’s in the middle of a far bigger shift. It’s abandoning formal annual reviews and its legacy performance management system. With the decision, GE joins other high-profile companies—like Microsoft, Accenture, and Adobe—that have started dumping or have already gotten rid of formal annual reviews.
- Respect people and growing capabilities of the team. - this capability matrix doesn’t use the 1-5 ranking that could be used against someone. It uses a scoring system that lets the manager focus on the needs of the team without rank or shame. Or even better, remove the names and let people anonymously complete this information (more psychologically safe). Modern agile – Make people awesome Use data for building a learning curriculum for the team. This information radiator makes it easy to decide what needs to be done and to take action. Allows us to visually see where the strengths and training opportunities exist to grow the team’s capabilities Use symbols instead of numbers to avoid perception of ranking people. * = know it well enough to teach [] = comfortable working with it o = would like to learn more X = don’t need it for my job and don’t want to learn it