Fit For Purpose. Resilience & Agility in Modern Business. Presenter David J. Anderson CEO. Agile Business Conference London October 2014 Release 1.

Transcription

1 Fit For Purpose Resilience & Agility in Modern Business Presenter David J. Anderson CEO Agile Business Conference London October 2014 Release 1.0

2 America Square Conference Centre London Register now!

3 Understanding fitness for purpose

4 What makes a pizza delivery service fit for purpose? Fitness criteria are metrics that measure things customers value when selecting a service again & again Delivery time Quality Predictability Safety (or conformance to regulatory requirements)

5 Meet Neeta - a project manager Delivery time = approximately 1 hour Non-functional quality = tasty & hot Functional quality (order accuracy) = doesn t matter if small mistakes are made, geeks will eat any flavor of pizza Predictability = +/- 30 minutes is acceptable Safety = so long as health & safety in food preparation is good, it s fine Neeta s team are working late (again) Neeta needs to feed them with pizza What attributes do her team care about in a pizza delivery service?

6 Neeta is also a working mom! Neeta Delivery gets time home = late. Her 20 kids minutes are really hungry and even though she shouldn t she decides to order pizza for them Non-functional quality = doesn t matter too much, it s pizza!!! Functional quality (order accuracy) = it must be cheese pizza! No other flavor is acceptable! (even if you take the pepperoni off) Predictability = +/- 5 minutes maximum!!! What makes a pizza delivery Safety service = acceptable to her kids age 4, 6, 9 & 11 years? only mommy worries about that stuff!

7 Lesson 1

8 To be fit for purpose there is a We need to offer a selection of product component & a service different recipes which are tasty delivery component & popular. However, we must also deliver with speed & predictability

9 Modern creative & knowledge Operational worker businesses excellence often and service obsess with delivery product excellence definition are often & strategy overlooked or treated as inferior management skills

10 Lesson 2

11 Each Neeta has 2 Mother Traditional of Neeta s and demographic Project identities represents a different market Manager & income segment Nor, group for for the that segmentation does not accurately pizza matter, capture delivery do personas. the context service As Neeta represents two segments to understand not just one fit for persona purpose

12 Defining Fitness Criteria

13 Rate Of Market Adoption Market Adoption Lifecycle Segmentation Little Chasm Moore s Chasm Enthusiasts Early Adopters Early Majority Late Majority Laggards time Fit for purpose Change of time Fit for purpose Community development Hip Cool Buggy Niche Market Features Good func quality Adequate non-func quality Permission Giving Early adopter Exceptional func and nonfunc quality Cost Effective Broad Features Exceptional func and nonfunc quality Low Cost Easy Access Forced adoption Viewed as taxation

14 Customer Storytelling & Clustering Tell stories about real customers, their motivation, Give each what cluster they a nickname buy e.g. and why. Cluster similar stories All ins Aspirationals Bet hedgers Boy scouts

15 You can t just ask! Neeta, how fast would you like your Believe pizza what customers delivered? actually How do, do not believe predictable Customers what Would do they you will you say need tend pay they ll more to tell do! for us to you be they with the need our things delivery better you say service you estimate? and Actually more need features behavior and than want? will they vary from really declared need! intent! No, probably not!

16 Who knows your customers? Front line staff Those who take and those who deliver orders Those who provide customer care Often the lowest paid staff in a business Often the highest turnover, shortest tenured positions And yet, they have the vital information that enables the business to survive, thrive and compete

17 Pizza boy knows Neeta s Story! Staff who meet customers can be trained to learn what matters Create ways to them to capture and customer why stories or directly involve customer facing staff when defining customer segments fitness criteria

18 GT car manufacturer story A well known manufacturer of GT cars Determining determined Damaging your fitness brand, customers criteria were your They learned prepared reputation thresholds this by to and by your letting wait delivery 21 reducing months profitability service time to slip take levels is a strange until to 27 months delivery customer way to complaints discover how rise to and to receiving dangerous cancellations levels isn t and be a customers safe to switching fail approach! to a rival manufacturer fit for purpose!

19 Is it safe to fail? Retarding customer service until customers complain vehemently or take their business elsewhere could be damaging We need general guidance that allows us to probe for If fitness we can t criteria ask, and we can t threshold allow service values that to decline is until Undermines brand safe to complaints fail Damages make reputation the threshold Loss evident, of market what share can Loss of revenue we do? Probing for threshold values by reducing service quality isn t safe to fail

20 Probe with classes of service Create a class Fixed of delivery service to date class of respond to Look service the believed for emerged clusters new this or way. segment Observe patterns take up of of demand, class of or service similar Initially expectations, abused or by Set service Is it emerging levels over-used? at or segments close (or abused?) to If so anticipated tighten marketing, threshold qualification eligibility levels criteria criteria were tightened it up. Is it under-used? Consider removing

21 Telecom Equipment Example A platform Now design maintenance and offer 3 Each request is tagged with the originating Imagine department telco 3 classes American of at service operator a telco telecom for operators whom with the equipment different request strategic is manufacturer being positions implemented. receives High quality, Each demand tight operator only done is from criteria for each step given Verizon a lane internal value on the quality application kanban most Short lead time pull board priority, Sprint value departments time-to-market looser done criteria Voicestream/T-Mobile USA values low Low cost junior staff, lowest cost priority compared to other work

22 Verizon 10 Sprint Different lanes, different risks 10 Engineering Ready customer D PB E MN Deployment Ready Development Testing Ongoing Done Verification Acceptance 10 Each lane represents a different Different classes of service and source of demand but also different pull criteria policies are different G fitness criteria and defined for each lane providing P1 threshold values AB service levels tuned to the fitness DA for purpose expectations of each Done T-Mobile 10 F I DE GY

23 Lesson 3

24 To have confidence you are offering Classes of a service that should is fit align for to To purpose, serve market more you segments than must one offer and market different fitness segment criteria adequately, classes (or stakeholders of service you must needs) offer a selection of classes of service

25 Service Delivery Kanban improves business agility

26 Commitment Frequency Ideas Replenishment Dev Ready 5 Development Test Ready Testing Ongoing Frequent Done replenishment & commitment is more agile. UAT Release Ready Pull F F F F F F F Discarded G I On-demand commitment is D most agile! The frequency of system replenishment should reflect arrival rate of new information and the transaction & coordination costs of holding a I meeting E

27 Defining Kanban System Lead Time Ideas Dev Ready Development Test Ready Testing UAT Release Ready 5 Ongoing Done Pull F F F F F F F G D The clock starts ticking when we accept the customers order, not when it is placed! Kanban system lead Until then customer orders are merely E time ends available options when the item reaches the first queue System Lead Time Discarded I I

28 Delivery Frequency Ideas Dev Ready Development Test Ready Testing UAT Release Ready Ongoing Done Frequent delivery is more agile. Delivery Pull F F F F F F F On-demand delivery is most D agile! G E Discarded I The frequency of delivery should reflect the transaction & coordination costs of deployment plus costs & tolerance Iof customer to take delivery

29 Lesson 4

30 Kanban Kanban doesn t systems use decouple time-boxed Instead planning, iterations, commitment prioritization or conventional is deferred, & Service commitment delivery from can be lead tuned time to selection planning is just-in-time or prioritizaztion and and the dynamics delivery of scheduling the business prioritization methods is dynamic & based environment and evolve to be on class of service fitter for purpose

31 Adapting to deliver better service

32 Demand Demand Demand Each service delivery workflow can have its own kanban system Observed Capability Observed Capability Observed Capability

33 Demand Demand Demand Dependencies between systems create an ecosystem Observed Capability Looking downstream, you want the system to help you anticipate and manage dependencies Looking upstream, Observed you want the Combine the two, and across Capability the system to help you anticipate and organization you smooth flow manage demand end-to-end improving lead times and predictability Observed Capability

34 Feedback is needed at 3 levels Operations Review monthly Service Delivery Review weekly Standup Meeting daily

35 Standup Meeting Daily Disciplined conduct and acts of leadership lead to improvement opportunities Problem solving & improvement discussions are taken outside the meeting

36 Service Delivery Review Weekly A focused discussion about system capability Usually in private (often 1-1) between a more senior manager and individual(s) responsible for the system operation Review against fitness criteria metrics, e.g. current capability versus lead time SLA with 60 day, 85% on-time target Discuss shortfalls against (customer) expectations Analyze for assignable/special cause versus chance/common cause Discuss options for risk mitigation & reduction or system design changes to improve observed capability against expectations

37 Buffer dependencies, agree SLAs Input Queue Analysis In Prog Done Dev Development Ready In Prog Done Build Ready Test Release Ready... Waiting on External Group Dots denote clock ticking on SLA Late against SLA

38 Operations Review Monthly Disciplined review of demand and capability for each kanban system Provides system of systems view and understanding System changes are suggested by attendees

39 Risks, fitness criteria & classes of service should be explicit & transparent at all levels Operations Review monthly Lead time Quality Predictability weekly Service Delivery Review Lead time Quality Predictability Standup Meeting Lead time Quality Predictability daily

40 Organizational Improvements Emerge

41 Lesson 5

42 Adaptation and evolution requires Fitness criteria metrics from the feedback loops to generate external environment should be mutations (suggested changes) used to evaluate fitness and guide evolutionary changes regardless of the level in the organization

43 Sensing Changes in Market Conditions

44 We need a different set of Our business needs the ability to thresholds for our fitness criteria sense changing customer tastes. for each market segment As time goes by, the criteria & thresholds for a given market segment may change

45 Our pizza delivery service can be fitter for purpose by offering different classes of But, service do we for have each the market capability segment to deliver on customer expectations?

46 Fitness For Purpose Review Regular recurring meeting Review with customer front-line stories staff Review Do they Fitness map to criteria existing clusters? Do we perceive customers of a Or, Perhaps performed at different given do we cluster/segment see emerging new are happy clusters? organizational levels to roll-up and consider us fit for purpose information in larger scale What services or product features organizations or service delivery expectations have emerged or changed?

47 Integration with Net Promoter Score Making sense of supplementary question responses by clustering & interpreting fitness criteria makes Net Promoter Score actionable! NPS should have a 2 nd question Why did you give this rating? which has a micro-narrative answer Micro-narratives can be clustered with SenseMaker software. Segments identified and fitness criteria suggested and tested

48 Lesson 6

49 We need the ability to sense or Our our sensing ability capability to respond exists may with no our staff longer who be interact appropriate directly with customers, we must involve them directly in our feedback loops & metrics definition

50 Conclusions

51 1. Fitness for Purpose has both a product component & a service delivery component 2. Market segmentation should be done based on unique fitness criteria metrics 3. To be confident you are fit for purpose you must offer a selection of classes of service aligned against fitness criteria metrics

52 4. Kanban decouples planning, lead time & delivery activities increasing business agility 5. Adaptation requires feedback loops & these should be driven by evaluation against fitness criteria metrics 6. Without a capability to sense our ability to respond may be inappropriate. We need a sensing feedback loop involving customer facing personnel

53 America Square Conference Centre London Register now!

54 Thank you!

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56 About David Anderson is an innovator in the management of 21 st Century businesses that employ creative people who think for a living. He leads a training, consulting, publishing and event planning business dedicated to developing, promoting and implementing new management thinking & methods He has 30 years experience in the high technology industry starting with computer games in the early 1980 s. He has led software organizations delivering superior productivity and quality using innovative methods at large companies such as Sprint and Motorola. David defined the Modern Management Framework and originated Kanban Method an adaptive approach to improved service delivery. His latest book, published in June 2012, is, Lessons in Agile Management On the Road to Kanban. David is CEO of David J. Anderson & Associates Inc., a consulting and training firm operating globally offering management training solutions for 21 st Century businesses where employees make performance defining decisions daily.

57 Acknowledgements Customer storytelling and segmentation by clustering stories will be recognized by some as a form of Dave Snowden s Sense Making exercise. Safe to fail is an approach to experimental, evolutionary adaptation to a complex and changing environment, also advocated by Dave Snowden. Sense and Respond was inspired by Stephen Parry and his book of the same title.

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