The document discusses concepts from game theory and behavioral economics including equilibrium, Pareto efficiency, Nash equilibrium, and cognitive biases. It notes that organizations can fall into a "bad equilibrium" similar to the TV show "Breaking Bad" if the incentives are not properly structured. To achieve a "good equilibrium", the document recommends adopting DevOps practices like making work visible, managing work in progress, embracing failure, and cultivating psychological safety and blamelessness. It argues the "really hard" work involves rethinking agreements and increasing buffers and headcount to build a true "learning organization".

1. “Breaking Bad” Equilibrium
John Willis
Twitter: botchagalupe
GitHub: botchagalupe

2. • One of the founding members of “Devopsdays”
• Co-author of the “Devops Handbook”.
• Author of the “Introduction to Devops” on Linux Foundation edX.
• Podcaster at devopscafe.org
• Devops Enterprise Summit - Cofounder
• Nine person in at Chef (VP of Customer Enablement)
• Formally Director of Devops at Dell
• Found of Socketplane (Acquired by Docker)
• 10 Startups over 25 years
About Me
https://github.com/botchagalupe/my-presentations

3. • Economics
• Wealth
• Markets
• Thermodynamics
Equilibrium

4. • Techical Debt
• Cooperation
• Risk
• Work Life Balance
• Burnout
Equilibrium

5. It’s a strategy that all the
players in the game can adopt
and converge on, but it won’t
produce a desirable outcome
for anyone.
Bad Equilibrium

6. False Equilibrium

7. False Analytics
http://www.slideshare.net/swardley/an-introduction-to-wardley-maps

8. False Analytics
http://www.slideshare.net/swardley/an-introduction-to-wardley-maps

9. Movie Fun

12. More Fun - Game Theory

13. Is a state of allocation of resources in
which it is impossible to make any one
individual better off without making at
least one individual worse off.
Pareto Efficiency

14. A situation is inefficient if someone
can be made better off even after
compensating those made worse off.
Pareto Inefficiency

17. A concept of game theory where the
optimal outcome of a game is one
where no player has an incentive to
deviate from his chosen strategy after
considering an opponent's choice.
Nash Equilibrium

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Nash
Equilibrium

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51. Why Michael Lewis?

53. Forty years ago, Israeli psychologists Daniel Kahneman
and Amos Tversky wrote a series of breathtakingly
original studies undoing our assumptions about the
decision-making process. Their papers showed the
ways in which the human mind erred, systematically,
when forced to make judgments in uncertain situations.
Their work created the field of behavioral economics,
revolutionized Big Data studies, advanced evidence-
based medicine, led to a new approach to government
regulation, and made much of Michael Lewis’s own
work possible. Kahneman and Tversky are more
responsible than anybody for the powerful trend to
mistrust human intuition and defer to algorithms.

54. • Human Irrationality
• Heuristics
• System 1 (fast)
• System 2 (slow)
• Availability Bias
• Regression to the Mean
• Overconfidence
• Illusion of Validity

56. That’s how it’s
always been done
around here!

57. • Undesirable Outcomes
• Pareto Inefficient
• Nash Equilibrium
• False Analytics
• Human Irrationality
• Cognitive Bias
• Overconfidence
Devops Bad Equilibrium
Good
Opportunities…
- Discontinuity
- Dislocation

58. Breaking Bad Equilibrium

59. • Make work visible
• Manage WIP
• Manage Flow
• Create high trust
• Embrace failure
Devops Advanced
Good Better

60. Really Hard Stuff
Better Excellent
• Psychological Safety
• Blamelessness
• Rethink SLA’s
• Increase Headcount
• Increase Buffers

61. You are either building a
learning organization…
or you will be losing to
someone who is…
Andrew Clay Shafer