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What is this thing called Pull?
An Inflection Point in the Way Things are Done
mary@poppendieck.com Mary Poppendieck www.poppendieck.com

2. Push From Forecast
Video Cassette Plant – early 1980’s
Pancake
Coat Slit Pancake Wind Package Ship
Pancake
Chemicals Mix
Parts Assemble
Supplies
MRP scheduled all purchases and sent orders to each workstation
 Reliably shipped ~ 60% of weekly plan
 Orders filled in ~ 6 weeks
 A lot of expediting
2 September 10 Copyright©2010 Poppendieck.LLC l e a n
“If only you would try harder to do what the schedule says….”

3. Pull From Demand
Crisis at our Video Cassette Plant
 Competition selling cassettes
for less than we could make them
Our Response
 Statistical Analysis for Quality
Improvement Immediate Results:
 Just-in-Time (Lean) Production  95% of weekly plan
 Orders filled in 2 weeks
The Great Coffee Cup Simulation
 No expediting
Pancake
Coat Slit Pancake Wind Package Ship
Pancake
Supplies
Chemicals Mix
3 September 10
Parts
Copyright©2010 Poppendieck.LLC l e a n
Assemble

4. Preparation
It’s Not Luck
Years of Quality Improvement
 Statistical Analysis System
 QA moved to the production line
 Stop-the-Line Attitude
Months spent designing the details of a pull system
 Designed by production workers
 Pre-dated Just-in-Time consultants
 Leadership through all levels of line management
 The design process WAS the training
The most critical factors?
 Freedom to experiment at the local level
 Deep engagement of every worker in the plant
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 Ability to rapidly and easily adapt to problems

5. Strategic Inflection Point
Business goes on
to new heights
Inflection Point
10x change in an element of the business.
What worked before doesn’t work now.
The executives are the last to know.
Business
declines
5 September 10 Copyright©2010 Poppendieck.LLC l e a n
From: Only the Paranoid Survive, by Andy Grove,

6. Theory
Any transition from Push to Pull
will create an inflection point.
Business goes on
to new heights
Inflection Point
Transition from Push to Pull creates 10x change.
What worked before doesn’t work now.
The executives are the last to know.
Business
6 September 10 Copyright©2010 Poppendieck.LLC l e a n declines

7. Software Development
Inflection Points
Version 1.0 – Contract Focus Version 2.0 – Development Focus Version 3.0* - Customer Focus
 Processes and tools  Individuals and  Team vision and
 Comprehensive interactions initiative
documentation  Working software  Validated learning
 Contract negotiation  Customer collaboration  Customer discovery
 Following a plan  Responding to change  Initiating Change
Inflection Point:
Customer Pull
2000 2005 2010 2015
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*Kent Beck, Startup Lessons Learned – April 23, 2010
Copyright©2010 Poppendieck.LLC http://www.justin.tv/startuplessonslearned/b/262656520

8. Understand the Job
The purpose of a product is to make a job easier, cheaper,
faster, more convenient, and/or give better results
The development team must deeply understand the job and
the value to be gained from doing the job in a new way.
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Ethnography
September 10 Copyright©2010 Poppendieck.LLC l e a n
Ideation

9. Pull From Customer Value
Not this: But this:
P
R
I
O
R
I
T
I
Z
E
D
!
Brilliant Systems are the result
of a matching of mental models
between those developing a
system and those whose job will
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be made easier by the system.
September 10 Copyright©2010 Poppendieck.LLC l e a n

10. Case Study
GE Healthcare
“We realized that the biggest
impediment was that we were
selling what we were making
[rather than] making what the
customers here needed.”*
The MAC-i: EKG’s for Rs 9
“Our engineering and marketing teams now interact
closely with the customers here [in India] to understand
their requirements. We look at their work flow, their
environmental limitations, their profitability issues and
The Vscan: $8000 Ultrasound unit other factors and we then price, design and manufacture
the size of a mobile phone. Based
on designs originating in China, it
will revolutionize global healthcare.
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the products accordingly”** **Ashish Shah, general manager,
global technology, GE Healthcare
*V. Raja, president and CEO of GE Healthcare-South Asia.

11. Build the Thing Right
It’s Not Luck Basic Technical Disciplines:
1. Low Dependency Architecture
2. Coding Standards
3. Design/Code Reviews
4. Refactoring is a Habit
5. Source Control / Configuration Mgmt
6. Automated Unit Tests
It’s Hard Work 7. STOP if the tests don’t pass
8. Continuous Integration
9. Automated Acceptance Tests
10. System Testing / UAT – early & often
11. Automated Release / Install Packages
12. Escaped Defect Analysis & Feedback
11 September 10 Copyright©2010 Poppendieck.LLC l e a n

12. Disruptive Technologies
The question now really is:
“Why isn’t all enterprise
When I started Salesforce, software like Facebook?
I asked the question: Version 3.0
“Why isn’t all enterprise
software like Amazon.com?
Associated Press
Marc Benioff Version 2.0
July 28, 2010
Salesforce.com
“Over the past four years, I have watched with
“The fact is that because of the cloud,
amazement the rise of Amazon Web Services.
today a young upstart can take market
What started out as a basic S3 storage service
share without an incumbent having
… has disrupted – and transformed – the entire
time to react.” – Werner Vogles, Amazon.com
technology landscape.” – Technology writer Om Malik
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Werner Vogles
Amazon.com

13. Preparation
The OODA Loop*
Act Observe
Those who execute
this loop fastest
always win.
Decide Orient
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*Developed by John Boyd
Copyright©2010 Poppendieck.LLC l e a n

14. Pull from Passion
Remember the times when:
 You are deeply engaged
 Distractions disappear
 Time evaporates
This is called FLOW.
Flow occurs when we are
pulled by our passion:
 To master a difficult
challenge
 To be a part of something
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larger than ourselves

15. Motivation 3.0
Factors that Lead to
Better Performance &
Personal Satisfaction:
Autonomy:
 The desire to be
self-directed.
Mastery: www.youtube.com/watch?v=u6XAPnuFjJc
 The urge to get better. Open Source
Purpose:  “The impossible public good.”
 Incredibly stable
 The aspiration to make a  Impossibly complex
 No monetary rewards or sanctions
contribution to something  No central authority in the traditional sense
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larger than ourselves.
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 This defies known social & economic theory
 Why would people contribute?

16. Is Open An Inflection
Source Point?
Motivation 2.0 Motivation 3.0
 Extrinsic motivation  Intrinsic motivation
 Pay for time  Treat workers like volunteers
Economics 2.0 Economics 3.0
 The key scarcity which  The key scarcity is the time, energy &
drives decisions is capital brainpower of bright, creative people
Coordination 2.0 Coordination 3.0
 Leaders direct followers  Leaders recruit followers
 No option to opt-out  There is always an option to opt-out
Complexity 2.0 Complexity 3.0
 The plan-driven archetype  The evolution archetype
 Centralization  efficiency
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 Requisite variety  survival

17. Preparation:
1970: Jan Wallander became CEO
Focus on profitability, not growth.
Decisions devolved to branch managers:
independent agents who make
all decisions for their branch
Small central staff that must sell
services to branch managers
Measurements:
Cost-to-income ratio
Income per employee
Governance:
Friendly competition among branch managers
Company-wide profit sharing
Result:
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Top European bank that easily
weathers economic storms
September 10 Copyright©2010 Poppendieck.LLC l e a n

18. Preparation:
A fundamental measure of our success will be the shareholder value we create over the long
term. From the very beginning, our emphasis has been on the long term and as a result, we may
make decisions and weigh tradeoffs differently than some other companies. We will continue to:
Focus relentlessly on our customers.
Make bold investment decisions in light of long-term leadership
considerations rather than short-term profitability considerations.
There is more innovation ahead of us than behind us, and to that end, we are committed to
extending our leadership in e-commerce in a way that benefits customers and therefore,
inherently, investors -- you can’t do one without the other. Some of these bold investments
will pay off, others will not, but we will have learned a valuable lesson in either case.
Work hard to spend wisely and maintain our lean culture.
We understand the importance of continually reinforcing a cost-conscious culture.
Focus on hiring and retaining versatile and talented employees, and
weight their compensation to significant stock ownership rather than cash.
We know our success will be largely affected by our ability to attract and retain a motivated
employee base, each of whom must think like, and therefore must actually be, an owner.
We are firm believers that the long-term interests of shareholders are tightly linked to the
l e a n
interests of our customers. If we do our jobs right, today’s customers will buy more tomorrow,
we’ll add more customers in the process, and it will all add up to more cash flow and more long-
term value for our shareholders.
18 September 10 Copyright©2010 Poppendieck.LLC http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-govHighlights

19. Preparation:
2004 Founders’ IPO Letter
SERVING END USERS
We founded Google because we believed we could provide an important service to
the world-instantly delivering relevant information on virtually any topic. Serving
our end users is at the heart of what we do and remains our number one priority.
LONG TERM FOCUS
As a private company, we have concentrated on the long term, and this has served
us well. As a public company, we will do the same. In our opinion, outside
pressures too often tempt companies to sacrifice long term opportunities to meet
quarterly market expectations.
RISK VS REWARD IN THE LONG RUN
Our business environment changes rapidly and needs long term investment. We
will not hesitate to place major bets on promising new opportunities.
GOOGLERS
Our employees, who have named themselves Googlers, are everything. Google is
organized around the ability to attract and leverage the talent of exceptional
technologists and business people. We have been lucky to recruit many creative,
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principled and hard working stars. We hope to recruit many more in the future. We
will reward and treat them well.
http://investor.google.com/corporate/2004/ipo-founders-letter.html
Copyright©2010 Poppendieck.LLC

20. Business goes on
What do these Companies to new heights
have in Common?
Inflection Point
Business
1. Organize to be able rapidly recognize and declines
quickly respond to strategic inflection points.
2. Focus on customer success,
rather than company success.
3. Focus on attracting and engaging top people,
rather than selecting and executing top projects.
4. Believe that shareholders are better served by a long
term focus, even at the expense of quarterly results.
5. Believe that local decision-making is more important
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than company-wide process standardization.
September 10 Copyright©2010 Poppendieck.LLC l e a n

21. From To
Update to Version 3.0
Economics 3.0
The coming scarcity:
The time, energy & brainpower
3.0 of bright, creative people.
Coordination 3.0
2.X Leaders attract followers.
Wisdom is found at the worksite.
Motivation 3.0 Complexity 3.0
Autonomy Independent agents make
Mastery better decisions at scale.
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Passion
September 10 Copyright©2010 Poppendieck.LLC l e a n
Evolve or die.

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Thank You!
More Information: www.poppendieck.com
mary@poppendieck.com Mary Poppendieck www.poppendieck.com