Opening & Key Note - Modern Management Methods UK 2013 - Kanban Evolutionary Management

Why Modern?
Why now?
What does
modern
mean and
what is
enabling new
ways of
managing in a
new century

Presenter:
David J. Anderson
CEO Lean Kanban Inc.

Lean Kanban UK
London
October 2013
Release 1.0

dja@leankanban.com @lkuceo

Copyright Lean Kanban Inc.

Modern in Music



Progressive but not Modern!



Modern



Modern in Art



Photography
The arrival of photography
heralded an end to several
hundred years of
representational painting
Photography was a
discontinuous innovation



Impressionism – a new beginning



Modern in Science



Newtonian physics was out and the era of
Quantum Mechanics arrived

James
Clerk-Maxwell

Albert Einstein

Werner Heisenberg


Niels Bohr


The Drucker Challenge



Drucker’s Challenge in 1999
Can we improve the
productivity of
knowledge workers by a
factor of fifty times
during the twenty first
century?



Where might a 50x improvement come from?
Ready
For
Delivery Delivered

Pool
of
Ideas

Testing
FlowCommitted measures the
efficiency Development
3
∞
percentage of total lead time
2
3
∞
Ongoing
Done
is spent actually adding value Verification Acceptance
(or knowledge) versus waiting efficiency% = Work Time
Flow

commonly reported*, **

Multitasking means time spent
E in working columns is often
waiting time

G

PB
GY

DE

Waiting Working

MN
AB

Waiting

Working

Lead Time
* Hakan Forss, Lean Kanban France, Oct 2013
** 2% reported by Zsolt Fabok, Lean Kanban France, Oct 2012


x 100%

Lead Time

F Flow efficiencies of 1-5% are P1
D
I

∞


Waiting

Waiting

Modern Management



We stand on the verge of a revolution in
modern management
New science, new thinking and new technology is
enabling us to implement new ways of managing
creative work for the businesses of the 21st
Century



Breakthroughs in Understanding humans
The big innovation in understanding humans is the
emergence of neuroscience in the past 25 years
While significant advances in sociology have given
us models for understanding tribal behavior in the
workplace
Advances in complexity science have given us
ways to understand and react to situations where
the outcome is emergent and the starting
conditions matter



The Quantum Era of Management
Management has been rooted in the philosophy of
determinism and reductionism. It's 18th Century in
origin. Recent trends have seen us move to a more
holistic systems thinking approach, and a
probabilistic and statistical approach to risk and
decision making
These changes parallel the move from Newtonian
Physics to Quantum Mechanics in natural philosophy



New technologies enable a new form
New technologies such as the humble Post-It note
as well as tracking & simulation software, flat panel
touch-sensitive displays, ubiquitous broadband
Internet available globally, high definition web
cams, and video over IP are just some of the
technologies enabling us to embrace a new form
of management



Social Capital Reaps Rewards
This new management involves understanding
people - trusting them, empowering them
But it is an empowerment without loss of control
It is autonomy without loss of governance
It's humane without being anarchistic



The System & Environment Matter
Modern management also recognizes that the system
and the environment matter
Individual performance isn't enough
Reductionism to the smallest unit - the worker - local
optimization - make each worker produce as much as
possible - isn't the answer
The complex system of which the worker is just a
single part must be designed and managed
Understanding and affecting the outcome from
complex systems of work is the key to delivering on
Drucker's challenge.
Simply motivating people isn't enough!


Conclusion



The Form Must Change!
The key idea with any modern movement is that a
discontinuous innovation causes the form to change!

Modern Management contains the idea that we must
do things differently. View the world through a different
lens. Frame and make decisions differently.
To deliver on Drucker’s challenge we must understand
the complex nature of modern work using new models
& new science. We must use this understanding to
make better decisions


Thank you!


Kanban
and evolutionary
management
Presenter:
David J. Anderson
CEO Lean Kanban Inc.

Lean Kanban UK
London
October 2013
Release 1.0


Lessons we can learn
from Bruce Lee’s journey
in martial arts

Bruce Lee’s Journey in Martial Arts



Bruce Lee rejected traditional teaching and styles
of Chinese martial arts
• There are some parallels in
the story of Bruce Lee and
the emergence of his
approach to Kung Fu
• Lee rejected the idea of
following a particular style
of Chinese Martial Arts



Kung Fu Panda simplified the art to only four
styles

Mantis
Snake

Tiger

Monkey


There are in fact very many styles…



“Dry land swimming” provides a false sense of
capability

• The only way to learn is to train with a live opponent
• Lee rejected the many styles of martial arts for various reasons,
mainly that they gave the practitioners a false sense of
capability, putting them at risk in real combat situations
• He was against Kata (learning patterns without an opponent)
and described them in derogatory terms such as "dry land
swimming.“


Lee wanted to start from first principles and core
concepts

Four ranges of combat
•
•
•
•

Kicking
Punching
Trapping
Grappling

Five* Ways of Attack***
• Single Direct Attack (SDA)
• Attack By Combination (ABC)
• Progressive Indirect Attack
(PIA)
• (Hand) Immobilization Attack
(HIA)
• Attack by Drawing (ABD)
• Single Angle Attack (SAA)

*Apparently still called the Five Ways, there are actually now six **with the later inclusion of SAA
**The fact that The Five Ways has six elements is evidence of evolution in action
***Incorporated core ideas such as "center line" and single fluid motion from Wing Chun and parrying from Epee Fencing****
****Not a Chinese Martial Art and hence evidence of "no limitation as limitation"



Lee’s approach still needed a name
• He named his approach
Jeet Kune Do - the way of
the intercepting fist - after
one of the practices taught in
his method
• He was quick to point out that
it was just a name, a way of
communicating a set of
ideas. He was passionate
that practitioners shouldn't
get hung up on the name or
the inclusion of any one
move or action.


Jeet Kune Do

Having no
limitation as
limitation

Using no
way as way

Jeet Kune Do encourages development of a
uniquely personal style

"absorb that which is
useful“
discard the remainder


• a framework from
which to pick &
develop a personal
style
• an evolutionary
approach where
adoption of
maneuvers is
learned &
reinforced by
training with an
opponent
• Nothing was sacred

Training with an opponent provides the core
feedback loop to drive adaptation
Lee pursued ever
more elaborate
approaches to
protected real
combat training
to enable the
closed loop
learning that was
core to the
evolutionary
nature of JKD


Kata are not adaptive

In comparison with JKD, patterned styles of martial
arts taught with "kata" were open loop and not
adaptive. There is no learning from practicing kata



Martial Arts viewed through a Cynefin* Lens
Complex
Jeet Kune
Do
Emergent Practices

Complicated
Patterned
Styles
Good Practices

Chaotic

Simple

Novel Practices

Individual
Best Practice
Kata

*http://en.wikipedia.org/wiki/Cynefin


Lee’s genius was recognizing hand-to-hand
combat is an unordered problem
• Patterned styles are
perfectly good for
controlled circumstances
such as competition
• Sporting combat is an
ordered domain problem
• Street fighting is not orderly
and therefore emergent
practice is required
• Unordered problem
required a new philosophy


Motivation for the Kanban Method



Traditional Change is an A to B process
Designed
Current
Process

Defined
transition

Future
Process

• A is where you are now. B is a destination.
• B is either defined (from a methodology definition)
• or designed (by tailoring a framework or using a model
based approach such as VSM* or TOC TP**)

• To get from A to B, a change agency*** will guide a
transition initiative to install B into the organization
* Value stream mapping, ** Theory of Constraints Thinking Processes
***either an internal process group or external consultants


Change initiatives fail (even) more often than
projects
Change initiatives
often fail (aborted)
or produce lack
luster results
They fail to
institutionalize
resulting in
regression back to
old behavior


Daniel Kahneman has given us a simple model for
how we process information
Learning from
theory

Learning by
Experience

SLOW

FAST

But fast to learn

But slow to learn
System 1
Sensory Perception
Pattern Matching

Daniel Kahneman

System 2
Logical Inference
Engine

How we process change…
I logically evaluate
change using System 2
I adapt quickly

I feel change emotionally
using System 1
Silicon-based
life form

I adapt slowly
Daniel Kahneman



Carbon-based
life form

Adopting new processes challenges people
psychologically & sociologically
• New roles attack identity
• New responsibilities using new
techniques & practices threaten
self-esteem & social status
• Most people resist most change
because individually they have
more to lose than gain
• It is safer to be conservative and
stick to current practices and
avoid shaking up the current
social hierarchy
• Only the brave, the reckless
or the desperate will pursue
grand changes


The Kanban Method…
• Rejects the traditional
approach to change
• Believes, it is better to avoid
resistance than to push
harder against it
• Don’t install new processes
• Don’t reorganize

• Is designed for carbon-based
life forms
• Evolutionary change that is
humane


The Kanban Method…
• Catalyzes improvement
through use of kanban
systems and visual boards*
• Takes its name from the use
of kanban but it is just a name
• Anyone who thinks Kanban is
just about kanban (boards &
systems) is truly mistaken

*also known as "kanban" in Chinese and in Japanese when written with Chinese characters


The Kanban Method is a new approach to
improvement

Kanban is a
method
without methodology


Water flows around the rock

“be like water”

the rock represents resistance


The Kanban Method



Kanban should be like water*
In change
management,
resistance is from
the people involved
and it is always
emotional (system 1)
To flow around the
rock, we must learn
how to avoid
emotional resistance
* http://joecampbell.wordpress.com/2009/05/13/be-like-water/


Principles behind the Kanban Method
• Start with what you do now
• Agree to pursue evolutionary change
• Initially, respect roles, responsibilities and job
titles
• Encourage acts of leadership at all levels
The first 3 principles were specifically chosen to
address System 1 objections, to flow around the
rock of emotional resistance in humans


The Kanban Lens
Kanban asks us to view the world of work through a
new lens
• Creative work is service-oriented
• Service delivery involves workflow
• Workflow involves a series of knowledge discovery
activities

Kanban would be less applicable if a serviceorientated view of work were difficult to conceive or
the work was sufficiently new that a definable series of
knowledge discovery activities had not emerged


6 Practices Enable Process Evolution
The Kanban Method
Visualize
Limit Work-in-progress
Manage Flow
Make Policies Explicit
Implement Feedback Loops
Improve Collaboratively, Evolve Experimentally
(using models & the scientific method)



Start with what you do now
• The Kanban Method evolved with the principle
that it “should be like water” - enable change
while avoiding sources of resistance
• With Kanban you start with what you do now,
and "kanbanize" it, catalyzing the evolutionary
process into action. Changes to processes in
use will occur
• Evaluating whether a change is truly an
improvement is done using fitness criteria
that evaluate an external outcome



Fitness Criteria



Fitness criteria are metrics that measure
observable external outcomes
• Fitness criteria are metrics
that measure things
customers or other external
stakeholders value
•
•
•
•

Delivery time
Quality
Predictability
Safety (conformance to
regulatory requirements)

• or metrics that value actual
outcomes such as
• customer satisfaction
• employee satisfaction



Net Promoter Score is a Fitness Evaluator
but is it the only metric we need?
• Steve Denning has proposed
that Net Promoter Score
(NPS) is the only metric that
business should care about
• NPS is interesting because
it is a fitness evaluator. It
will indicate whether a
business (or product) is likely
to survive & thrive
• But is it the only metric we
need?


Steve Denning

Net Promoter Score is a way of evaluating
customer satisfaction

• In a general sense and at an abstract level NPS tells us whether
customers like what we offer but we cannot know what they truly
care about
• For the abstract problem of, “Can we measure customer
satisfaction?” NPV is a reasonably good measure, if used properly



The problem with Net Promoter Score is that it
doesn’t tell you what to do!
• Net Promoter Score (if used properly) will tell
you whether your product or service is likely to
continue selling
• However, it doesn’t give you any clues about
what to do or how to improve
• If NPS is your only metric you’re left to randomly
experiment to generate a higher score
• Like biological evolution, random mutation is
expensive, takes a long time & involves luck


Can we be smarter by using better fitness criteria
than NPS?
• If we have a service-oriented view of the world,
and want to evaluate service delivery then we
already know what customers care about
•
•
•
•

Lead time
Quality
Predictability
Safety (or conformance to regulatory reqs)



If we order a pizza we know what we care about…
• Fast delivery
• lead time from order to
delivery

• Accuracy and quality
• Pepperoni not Hawaiian
• Still warm on delivery

• Predictable Delivery
• If they say “ready in 30
minutes”, we want delivery in
25-35 minutes


If we need a medical procedure…
• Short waiting time
• Queuing time from diagnosis to procedure

• Short procedure & recovery time
• Fast procedure, fast recovery time, implies minimally
invasive surgery and use of technology to reduce the craft
input and eliminate variability

• Predictability of schedule & outcome
• Procedure should proceed as scheduled
• Outcome should have high probability of success

• Safe
• Low risk of complications
• Regulatory health & safety procedures followed



Validate Fitness Criteria with real customers
• It is necessary to keep checking that the fitness
criteria we are measuring do indeed matter to
customers
• Variation in what matters to different customers
provides the opportunity to segment demand
and offer different classes of service within your
kanban system
• e.g. Will you pay extra to have your pizza delivered
faster?



Which system is fitter?
System B

System A Mean 17 days

Mean 12 days

30

14
12
10
8
6
4
2
0

25
20
15
Frequency

10

Frequency

5
0
5

Lead Time (Days)

10

15

20

25

30

More

Lead Time in Days

We don’t know!
System B is faster but without understanding
customer expectations, both may be fit enough


Measuring delivery against expectation
System B

System A Mean 17 days
14
12
10
8
6
4
2
0

System B is clearly fitter!

Mean 12 days

30
25
20
15

Frequency

10

Frequency

5

System B delivers 5/7 within expectations
System A only delivers 3/7 within expectations
0

5

10

15

Lead Time (Days)

20

10
8
6
4
Frequency

45
40
35
30
25
20
15
10
5
0

Frequency

-15

Lead Time Expectation Spread (Days)


More

System B

12

0

30

Lead Time in Days

System A

2

25

-10

-5

0

5

10

15

20 More

Lead Time Expectation Spread (Days)


Business Risks, Fitness Criteria & Classes of
Service should all align
• If your kanban system is designed properly the
classes of service you are offering should align
with the true business risks in the domain
• And the metrics being used to evaluate system
capability, should be fitness criteria that are
derived from the business risk being managed
• For example, cost of delay requires us to
measure lead time



Assessing fitness to pursue a
short Shelf-Life strategy

1-2 years)

Lead Time

If we plan to pursue short shelf-life
opportunities, we must measure predictability, lead
time, replenishment & delivery frequency as fitness
Medium
criteria. Expectations are set based on our chosen
(months,
strategy to pursue short shelf-life opportunities
quarters,

Delivery

Frequent Short Frequent

Replenishment

Predictability

Are our business
agility &
High
predictability fit
Short
(days,
enough for our weeks,
strategy? months)

Business Agility

Long
Low

(years,
decades)

Seldom Long

Kanban system dynamics

Seldom

Evolutionary change has no defined end point
Initial
Process

Evaluate
Fitness
Roll
back

Evaluate
Fitness

We don’t know the
end-point but we do
know our emergent
process is fitter!
Evaluate
Fitness

Roll
forward

Evolving
Process

Evaluate
Fitness

Evalua
Fitnes

Future process is
emergent



Kanban viewed through a Cynefin*work types
Multiple Lens
Ordered

Kanban systems alone
Unordered
aren’t enough in the
unordered domain
domains

Pragmatic
Holistic
Philosophy
Probabilitic
Quantum
Mechanics

Multiple classes of
domains
service

Complex
Kanban
Method
Emergent Practices

Complicated
Deep
Kanban
Good Practices
System Single work type

Enlightenment
Reductionist
Philosophy

Single class of service
disorder

Chaotic
Kanban
Method
Novel Practices
Not
Applicable

*http://en.wikipedia.org/wiki/Cynefin

Simple
Simple
Kanban
Best Practice
System


Deterministic
Newtonian
Physics

Enabling Evolutionary Management



Institutionalize feedback systems to enable
evolutionary change

Operations
Review
System
Capability
Review
Standup
Meeting

manager to subordinate(s)
(both 1-1 and 1-team)



Disintermediate!
Risks, fitness criteria & classes of service should
be explicit & transparent
Operations
Review

Lead time
Quality
Predictability

Expose risk, classes of
service & fitness criteria
at all 3 levels of
Lead time
Quality
feedback
System

Capability
Review

manager to subordinate(s)
(both 1-1 and 1-team)


Predictability

Standup
Meeting


Lead time
Quality
Predictability

Is there room for improvement?

Ready
For
Delivery Delivered

Pool
of
Ideas

Testing
FlowCommitted measures the
efficiency Development
3
∞
percentage of total lead time
2
3
∞
Ongoing
Done
is spent actually adding value Verification Acceptance
(or knowledge) versus waiting efficiency% = Work Time
Flow

commonly reported*, **

Multitasking means time spent
E in working columns is often
waiting time

G

PB
GY

DE

Waiting Working

MN
AB

Waiting

Working

Lead Time
* Hakan Forss, Lean Kanban France, Oct 2013
** 2% reported by Zsolt Fabok, Lean Kanban France, Oct 2012


x 100%

Lead Time

F Flow efficiencies of 1-5% are P1
D
I

∞


Waiting

Waiting

Other metrics should only be used as input to
models to drive improvement
• Flow efficiency will help us
identify wasteful delay
• Time blocked and blocker
clustering will help identify
wasteful delay from specific
assignable causes such as
vendor dependency
• Metrics like this help us focus
improvement initiatives to
improve the fitness criteria
results – e.g. removing delay
improves lead time
http://www.klausleopold.com/2013/09/blocker-clusters-problems-are-not.html



Know why you are using a metric!
• Is your metric a fitness criteria that assesses
system capability and indicates fitness for
purpose and likelihood of surviving and thriving
by satisfying customers?
• Or, is your metric evaluating and guiding a
specific change to improve fitness of the
system?
• If neither, you don’t need it!
• Metrics guiding improvements should be
temporary & discarded when no longer needed


The future of creative knowledge work should be
inspired by Bruce Lee & JKD
Our opponents are uncertainty & risk.
Engage directly
Visualize & make them explicit throughout
the workflow & at all 3 levels of reporting
Teach beginners to set up
safe-to-fail, learning environments at the
individual, workflow & business unit levels
Evolutionary methods are required to help
us manage in complex environments
If humans are involved the environment is
Train with live opponents
complex
Fitness-for-purpose & sustainability come
No kata
from developing strong adaptive capability

No "dry land swimming“



David Anderson is a thought leader in
managing creative knowledge workers.
He is CEO of Lean Kanban Inc. a business
franchising training & events globally
with a vision of sustainable evolutionary
approaches for improved service
delivery & management in creative 21st
Century industries.

About

He has 30 years experience in the high technology industry starting with
computer games in the early 1980’s. He has led software teams
delivering superior productivity and quality using innovative methods at
large firms such as Sprint and Motorola.
David is the pioneer of the Kanban Method an evolutionary approach to
improved service delivery and better business agility. His latest book
is, Lessons in Agile Management – On the Road to Kanban.
He founded Lean Kanban University, the education division of Lean
Kanban Inc, a trade association of member firms & franchisees dedicated
to assuring high quality Kanban training through a worldwide network of
accredited trainers offering classes based on a defined and peer reviewed
curriculum.



Acknowledgements
The idea of Modern Management Methods was inspired by History of Modern Part 2 by
Orchestral Maneuvers in the Dark.
Daniel S. Vacanti first suggested that the Kanban Method and related techniques of
probabilistic forecasting, statistical methods, and both qualitative and quantitative risk
management were creating a change in management methods of the same magnitude
and of a similar nature to the shift from Newtonian physics to Quantum Mechanics.
Janice Linden-Reed assisted with photo editing for this presentation



Acknowledgements
Joe Campbell first blogged about the similarity in philosophy between the Kanban Method
and the teachings of Bruce Lee. He coined the phrase “Kanban should be like water”.
The data on slides 60 & 61 was provided by Raymond Keating of CME Group.
My approach to change was framed by an observation from Peter Senge, “People do not
resist change, they resist being changed!” He intuited resistance was rooted in identity.
The Cynefin Framework & “Safe-to-fail Experiment” originated with Dave Snowden.

Steve Denning proposed NPS as the only metric that matters in his book, “Radical
Management.”


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