LLKD13 thriving under uncertainty

Thriving under
uncertainty with
Discovery Kanban
London Lean Kanban Day
March 2013

patrick.steyaert@okaloa.com
@PatrickSteyaert

© Patrick Steyaert, 2013 Thriving under uncertainty

Options and variation 2

Option 1

Effort = 300MD
Most likely delivery = May 31
Variation = ±10 days

Deadline = May 15
Option 2

Effort = 300MD
Most likely delivery = May 31
Variation = ±20 days


Thriving under uncertainty 3

Plan perspective Risk perspective Options perspective
(Robust but fragile) (Resilient) (Anti-fragile)

§  variation and §  absorb variation and §  thrive from disruption;
disruption are not tolerate disruption variation can be
tolerated very well without collapsing beneficial
Customers/ Users /
Stakeholders

TEAM

FLEXIBLE BOUNDARY


4

Pains and gains in the history of projects

Absorbing variation - Classes of Service

Thriving on variation - Options

Kanban variations


A calamitous history of 5
projects*
Project Cost overrun Project Actual traffic
Channel tunnel 80% as percentage
UK-FR of forecast

Øresund 70% Channel tunnel 18%
access link, DE UK-FR

Great belt link, 54% Miami metro, 15%
DE USA

Øresund coast- 26% Denver 55%
to-coast International
Airport, USA
Conclusion: don’t trust
Conclusion: don’t trust
cost estimates
usage forecasts

*Source: Megaprojects and risk, an anatomy of ambition, Bent
Flyvbjerg, Nils Bruzelius and Werner Rothengatter, 2003

IT projects 6
ps of issues that cause most project failures.

IT projects >$15 million1
2 45%

ssues Beneﬁts shortfall –56%
Delivering large-scale IT projects on time, on budget, and on
value, Michael Bloch, Sven Blumberg, and Jürgen Laartz

3 Skill issuesof
17 percent IT projects go so bad that they can
4 Execution issues
threaten the very existence of the company (cost
overruns of +200% and schedule slippage of nearly 70%)
Double Whammy – How ICT Projects are Fooled by Randomness and
Screwed by Political Intent, Alexander Budzier, Bent Flyvbjerg, Aug
2011.
6

Delusions and deception

§  Imperfect forecasting techniques and
inadequate data

7
§  Planning fallacy & optimism bias

§  Strategic misrepresentation and
asymmetric information


How projects are “sold” 8

Gains/Losses
f(X)

Gain Convexity

Unknown
X
Pain

Gain more than pain

9


How projects turn out in practice 10

Gains/Losses
f(X)

Gain
Unknown
X

Pain

Concavity
Pain more than gain

11
Variation and disruption

§  Order of magnitude (size) §  Political intervention
§  Customer §  Interrupt work
§  Team §  Technical problems
§  Policies §  Changing requirements
§  Technology §  Resources not available
§  Environment §  Environmental problem(s)
§  … §  …


Amplification – pain 12

Changes

Prioritization

Requirements Product
Work

Failure
load /
Rework


13
Irreversibility & Lock-in


Complex projects 14

How they are planned How they turn out

Convexity Concavity


Absorbing variation 15


Customers/ Users /
Stakeholders

TEAM

FLEXIBLE BOUNDARY


Kanban systems – Less pain 16

Variable
capability Variable
demand

Capability
Bottlenecks
Uncertainty Demand
Loopbacks

Kanban

© Patrick Steyaert, 2013 Accredited Kanban Training

Cost of delay 17

EXPEDITE

Cost/Value

FIXED DATE

STANDARD

INTANGIBLE

x time

Classes of service - Minimize Cost 18
of delay while retaining flexibility
Cost of delay Urgent Respond Policy
§  critical and immediate EXPEDITE §  will be pulled immediately
cost of delay by a qualified resource

§  cost of
delay goes up FIXED DATE §  will be pulled based on
risk assessment
Cost of delay
significantly after

Flexibility
deadline (delivering on time)

§  cost of
delay is shallow STANDARD §  will use first in, first out
but accelerates before (FIFO) queuing approach to
leveling out prioritize pull

§  cost of
delay may be INTANGIBLE §  will be pulled through the
significant but is not system in an ad hoc
incurred until much fashion
later
Important Anticipate

Capacity allocation across classes of 19
service

EXPEDITE

Expedite +1 = +5%
Cost/Value
Fixed
date 4 = 20%
FIXED DATE

Standard 8 = 50%

Intangib
le 6 = 30%
STANDARD

INTANGIBLE

x time



Customers/ Users /
Stakeholders

TEAM

FLEXIBLE BOUNDARY


Amplification of gains 21

Opportunities

Resources

Requirements Product
Work

User
feedback/
Revenue


Opportunity for learning 22

Risk/Options Cost/Value

Probes Enablers Table stakes Exceptionals
Is there a Can we build What is Protect & exploit
need? it? essential? existing value

time

Never commit early (unless you 23

know why)
Potential
option Validate
PROBE

Potential
option Validate

ENABLERS

Potential Validate
option
TABLE STAKES

Potential
option
EXCEPTIONAL


Exercising options 24

Potential Exercised
Option Option
Option


25
Options expire
§  Expedite – critical and immediate
cost of delay
è will be pulled immediately by
a qualified resource

§  Fixed date – cost of delay goes
up significantly after deadline
è will be pulled based on risk
assessment (delivering on time)

§  Standard – cost of delay is
shallow but accelerates before
leveling out
è will use first in, first out (FIFO)
queuing approach to prioritize pull

§  Intangible – cost of delay may be
significant but is not incurred until
much later; important but not
urgent
è will be pulled through the
system in an ad hoc fashion


Options have value 26

Gains/Losses
f(X)

Gain Convexity

Unknown
X
Pain

Gain more than pain

Options - Maximize learning,
27
minimize cost of failure
Option Exploration
§  Fragmented functionality, PROBE §  Explore customers
Lo-Fi implementation and needs

Learning opportunity
§  Minimally coherent end- ENABLERS §  Explore feasibility
to-end functionality and critical quality

Cost of failure
showing critical quality

§  End-to-end functionality TABLE STAKES §  Explore what is
with standard quality essential for
exploitation

§  Broad and detailed EXCEPTIONAL §  Protect & exploit
functionality, Hi-Fi existing value
implementation
Commitment Exploitation

Exploration versus exploitation 28

Potential
option Validate
PROBE
Exploitation
Potential
option Validate

ENABLERS

Potential
Exploration option Validate

TABLE STAKES

Potential
option
EXCEPTIONAL


29
Real options*

An option is the right to do
something but not the obligation

§  Options have value
§  Options expire
§  Never commit early (unless you
know why)

*Ref: Chris Matts & Olav Maassen


The knowledge discovery process 30

Narrative,
fragmented, Working product Decision to
possibly (i.e. probe, dampen or
conflicting enabler,…) amplify

Potential Exercise Validate Abandoned
Option
option option option / Continue

Coherent, Feedback
shared (e.g. user
concept feedback)

Discovery front-end Development Discovery back-end
Forming hypotheses Validating hypotheses

Discovery Kanban Board 31

WIP limits express exploration – exploitation balance
Exploration Exploitation
Legend
Expedite Potential Option Exercise Validate Abandon /
option option option Continue
Fixed
date 3/3/9/4 1/1/5/2 1/1/4/2
Probe
Standard probe probe
28/3
Intangib Enabler
le enabler
Intangible
Fixed date probe
probe
F
Table Demo for tradeshow
table R&D
L
stakes on 28/3
stakes O
W
Exceptional

Expedite table stakes
Overdue regulatory Standard enabler
development Framework development

FLOW

Kanban variations 32

Delivery Kanban Discovery Kanban

1.  Visualize – work 1.  Visualize – options

2.  Limit work in progress 2.  Minimal options / maximum un-
validated assumptions
3.  Manage Flow – flow of work
3.  Manage Flow – flow of customer/
4.  Make Process Policies Explicit – user acquisition
work policies (e.g. in terms of
cost of delay) 4.  Make Process Policies Explicit –
option policies (e.g. in terms of
5.  Implement Feedback Loops – at cost of failure)
workflow, inter-workflow and
organizational levels 5.  Implement Feedback Loops –
customer feedback loops
6.  Improve Collaboratively, Evolve
Experimentally (using models/ 6.  Improve Collaboratively, Evolve
scientific method) Experimentally (using models/
scientific method)

Not just for start-ups

§  Product development (mature product)

33
§  Business-IT programmes

§  Business transformation

§  Lean agile coaching




Customers/ Users /
Stakeholders

TEAM

FLEXIBLE BOUNDARY


Inspiration 35

Knowledge discovery process:

http://alistair.cockburn.us/
The+Design+as+Knowledge
+Acquisition+Movement


Thank You
patrick.steyaert@okaloa.com
@PatrickSteyaert


Classifying features 37

Epic Epic Epic

Story Story Story Story Story Story Story

Story Story Story Story Story

Story Story
Story Story

Story
Story

Story Story Story

© Patrick Steyaert, 2013 Anti-fragile projects

Classifying features - probes 38

Epic Epic Epic



Story Story
Story Story

Story
Story

Story Story Story


Classifying features - enablers 39

Epic Epic Epic

Enablers


Story Story
Story Story

Story
Story

Story Story Story


Classifying features – table stakes 40

Epic Epic Epic

Enablers

Table stakes
Story Story
Story Story

Story
Story

Story Story Story


Classifying features – exceptionals 41

Epic Epic Epic

Enablers

Table stakes
Story Story
Story Story

Story
Story
Exceptionals Story Story
Story


LLKD13 thriving under uncertainty

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