2. We are living under the tyranny of the prevailing style of
management. Most people imagine that this style of
management has always existed and is a fixture. Actually, it is a
modern invention, a trap that has led us into decline.
Transformation is required.
-W. Edwards Deming
The New Economics: For Industry, Government, Education
9. Portfolio Strategy
why brand identity is important to mode of operation
Michael Treacy and Fred Wiersema
The Discipline of Market Leaders: Choose Your Customers, Narrow
Your Focus, Dominate Your Market
13. Team A Team B
Component
A
Component
B
Team C Team D Team E Team F
Initiative 1
X X X X
Initiative 2
X X X
Initiative 3
X X X X
Initiative 4
X
Initiative 5
X X
Initiative 6
X X
Initiative 7
X X X Conflicts
Value Stream Analysis
25. Contact/ References
Slideshare - slideshare.net/dave225
Twitter - twitter.com/daveungar225
Email â dave.ungar@gmail.com
Linkedin - linkedin.com/in/daveungar/
PMO LIG - PMI Central Ohio Chapter PMOLIG
Group for Portfolio Management - Central Ohio Lean Portfolio Management
Reading List:
Everything you can find, and also:
⢠Escape Velocity - Moore, G. A. (2011). Escape velocity: Free your company's future from the pull of the past. New York,
NY: HarperBusiness.
⢠The Lean Startup - Ries, E. (2011). The lean startup: How today's entrepreneurs use continuous innovation to create
radically successful businesses. New York: Crown Business.
⢠Principles of Product Development Flow - Reinertsen, D. G. (2009). The principles of product development flow:
Second generation lean product development. Redondo Beach, Calif: Celeritas.
⢠The new economics for industry, government, education - Deming, W. E. (1993). The new economics for
industry, government, education. Cambridge, MA: Massachusetts Institute of Technology, Center for Advanced Engineering
Study.
⢠Drawing on the Right Side of the Brain â Edwards, B. (1979). Drawing on the right side of the brain: A course in
enhancing creativity and artistic confidence. (leave your frame of reference!)
⢠http://ScaledAgileFramework.com
⢠http://www.lean.org/LeanPost/Posting.cfm?LeanPostId=243#.U9EYi5cvnzU.twitter
30. â˘Feel Sick
â˘Call to schedule an appointment
â˘Wait on hold
â˘Make appointment
â˘Wait for appointment day to arrive
â˘Check in at office
â˘Wait for nurse to take BP
â˘Wait for doctor
â˘Talk to doctor
â˘Doctor leaves the room
â˘Doctor returns, heâs going to give you a prescription
â˘Wait in lobby to get prescription
â˘Drive to the pharmacy
â˘Fill prescription
â˘Go home
â˘Take pills
â˘Feel better
32. Roadmap
how to prioritize projects
http://ppmexecution.com/tag/portfolio-optimization/
33. Roadmap
how to prioritize projects
Value (currency)
Do nothing
Steady stream
(e.g. Revenue)
34.
35. Priorities tug from all directions. Resources are at a premium. Perspectives and
agendas differ, and teams are asking for more focus. In this session, learn how Lean
planning addresses these issues and what strategies, tools and techniques can help
clarify your portfolio strategy and roadmap.
Presentation Abstract: Defining a project backlog is the easy part of
portfolio management. Prioritizing the backlog is more difficult, especially
if your organization is keeping up with multiple initiatives. Demand
management can be an even greater challenge â How can you be sure to
have the right resources available when the business needs them? This
session will take a brief look at Lean planning methodology, followed by
strategies, tools, techniques and models for defining a portfolio strategy,
allocating resources to investment categories, and creating a portfolio
roadmap.
Defining a project backlog is the easy part of portfolio management; Anything you can
dream of goes into the backlog. Prioritizing the backlog is more difficult, especially if
your organization is keeping up with multiple initiatives. Demand management can be
an even greater challenge â How can you be sure to have the right resources available
when the business needs them?
Do you have a solid portfolio strategy and roadmap methodology to make data-based
decisions? What if all of the key stakeholders donât value the same outcomes? How
engaged are the development teams when it comes to delivering outcomes and not just
software? How often should you replan?
This session will take a brief look at Lean planning methodology, followed by strategies,
tools, techniques and models for defining a portfolio strategy, allocating resources to
investment categories, and creating a portfolio roadmap.
Some of the concepts covered: Brand Identity and Operational Mode, Analytical
Hierarchy Process, Common Economic Value, Solution Matrix, Outcome Forecasting,
Investment Categories.
Hinweis der Redaktion
Today weâre going to talk about Lean Portfolio Management â or, everything BUT Lean as you may know it. You can learn about Lean all over the place these days â Iâll talk about it briefly, but this is lean-portfolio, versus lean-get-a-bunch-of-stuff-done. Lean-get-a-bunch-of-stuff-done isnât too hard â create a backlog, work it as a kanban system, measure and adjust. You can learn that a lot of places. And please do!
(Lean six sigma is about process improvement and eliminating waste â also a worthy goal. You should learn about that too!)
There is no âAgile Portfolio Management.â There is only âPortfolio Management.â
And you can be good at it and responsive to business opportunities, or
You can be lousy at it and view success as compliance to your documented plan.
Lean Portfolio management â is about choosing the right things to invest your time and staff skills in, delivering them at the right time, and being flexible enough to adapt to new opportunities or new strategies based on what youâre learning from the market.
Taking a cue from Deming â view outcomes as a part of the system. So donât focus on the outcomes â focus on the system that produces the outcomes.
I will give you key concepts and references for further study. You donât need to write it all down â the slides will be available.
Reference:
Deming, W. E. (1993). The new economics for industry, government, education. Cambridge, MA: Massachusetts Institute of Technology, Center for Advanced Engineering Study.
First and foremost â if you think you want to be lean, you have to adopt systems thinking. Put the SYSTEM above objectives, above so-called success. You canât improve by looking for quick wins and low hanging fruit, or by setting numeric goals. Start to view the enterprise as a system â turning a gear over there creates motion there, there and there..
(Clock from multiple perspectives â doesnât matter how itâs moving, how youâre moving, what angle your viewing from, whatâs obscuring it â itâs still a thing that tells time.)
I guarantee that when you think about this or when you present it to others, people will say âBut what about âŚ?â Chances are, whatever that question is â is the WRONG question. They are trying to fit new thinking into an old context. Get yourself out of todayâs thinking and the structures youâre comfortable with. The question is not âhow do we keep <doing whatever>â but âwhat is the perfect system for delivering the most value in the shortest amount of time?â (And âWhat do we mean by âvalueâ ?â)
And I stress that to be a systems thinker, you have to engage your right brain. Create visual art, write or read fiction, listen to music with intention, think about things you could invent, think of 100 ways to use a rubber band. You donât have to produce anything â just get into that mode of thinking, often. And donât phone it in â drinking wine and painting a copy of a tree is not engaging anything but your social life.
References:
Owens, D. A. (2012). Creative people must be stopped: Six ways we kill innovation (without even trying). San Francisco: Jossey-Bass.
Godin, S. (2012). The Icarus deception: How high will you fly?. New York: Portfolio/Penguin.
http://blog.bufferapp.com/connections-in-the-brain-understanding-creativity-and-intelligenceconnections?utm_source=WhatCountsEmail&utm_medium=Above%20the%20Fold&utm_campaign=Above%20the%20Fold&_wcsid=F77673E6099BBF92762F3ABB81240E6E0ED6D63E39980AC5E2E9227FD5C941C0
Exercise: How can you use a barometer to tell the height of a skyscraper?
âundoubtedly the best way would be to knock on the janitor's door and say to him âI will give you this barometer if you tell me the height of this skyscraper'.â
Change your thinking.
.. So today I will give you ideas of where to spend some time learning. If you give me a free barometer, Iâll tell you more.
>> Now letâs talk a little about Lean and why weâre not all using it alreadyâŚ..
Who here is old?
Do you remember punch cards? Time-sharing on computers? You had to get it right the first time when you ran a program. It was costly and time-consuming to run code.
So we managed it like we manage building a skyscraper. You have to get it right the first time. Thereâs no architectural refactoring in a 100 story building.
We donât need that style any more, do we? Processing is cheap. Weâre closer to manufacturing now. AND â itâs virtual. The biggest thing weâre wasting is time.
Delivery teams have figured out that they can work differently and produce value faster. But at the enterprise level, we still want to plan and control everything â and the only way we can prove that weâre successful is compliance to the plan. REJECT! Lean portfolio management is not about scaling agile â this is about being agile.
Define whatâs valuable â economic view, currency, scoring models
Determine how to execute â value stream, resources
Establish flow of value through the system â measure cycle time & throughput
Limit work-in-progress.
Cut waste.
Increase capacity by opening bottlenecks.
Demand-based, from customer through delivery chain
Optimize
Agilists like to talk about business value. âDo the thing with the highest business value!â But what is business value?
Look at Jim Collins/ Hedgehog Concept â itâs not just where the money flows â but where you can create unmatchable power in the marketplace and where you can authentically connect with your customers. That is what sustains your business. The money is what keeps it solvent. (Both in cash flow and in continued investment. No one wants to invest in a business that has no return.)
If ROI is whatâs really importantâŚ
why donât we just sell real estate? (ROI is an incomplete measure)
Picture in the middle is an example from Pearson Publishing. Economic decisions are based on whether people (customers) are learning as a result.
Think about Southwest Airlines â yes, they make a profit, but they are very focused on delivering the best travel experience (within their market segment.)
(So Iâm going to spend the rest of this session teaching you how to earn a positive cash flow with no money down.)
Reference:
Collins, J. C. (2001). Good to great: Why some companies make the leap--and others don't. New York, NY: HarperBusiness.
Key Point: If you are creating a new system of management, a new methodology â What is its aim? More value through the system, but in what respect? (ie brand)
Who are we? When we talk about portfolio strategy, prioritization and project selection, we need a standard for making those decisions.
Brand is your customersâ perceptions of you. (Including potential customers.)
Uber â is not a product leader just be cause they were innovative. They are not customer-intimate just because they serve their customers well. They are operationally excellent because they can get a car to you when you need one.
(See also, maybe, for other reasons â the Lean Canvas)
Reference:
Treacy, M., & Wiersema, F. D. (1995). The discipline of market leaders: Choose your customers, narrow your focus, dominate your market. Reading, Mass: Addison-Wesley Pub. Co.
Ries, E. (2011). The lean startup: How today's entrepreneurs use continuous innovation to create radically successful businesses. New York: Crown Business.
Q: What if I canât affect the brand? Thatâs way above me!
A: 1) You can bring this question to your senior leadership. Perhaps they have an answer -or perhaps theyâve never thought about this either â they may need to take 6 months to get back to you.
2) You can make up your own answer. For lack of an answer from anywhere else, talk it over with your peers, your staff, your CUSTOMERS (but not naively â ask âhow do you see us?â) .. Use that as a way to be consistent in your approach to prioritization.
Just look at the three columns. Segment investments. They have different modes of operation.
===============================================================
(Opex = operational expense, Capex = capital expense, timex/ time.)
Investment categories:
Gotta do â to keep the product from dying
Doing â current rate of growth (or decline) to maintain steady relevance as a mature/maturing product
Disruptive â disrupting the market, differentiation, creating a new market, transformational.
Plan these at the highest possible level â combine resources by investment type (category), not by product silo.
Roadmap items should indicate VALUE and Effect on the Market (or customers.) Not merely features to be delivered. How will the market/customersâ lives change?
Revisit the roadmap often. Itâs probably wrong! A roadmap is a chart for how to get to a future vision. You donât know what youâre going to encounter along the way â itâs an educated guess. You need it, but donât expect it to be stable. Itâs not for managing delivery! And donât bother assigning dates â theyâll change. (Assign priority. Track cycle time. Infer dates based on those inputs.)
Reference:
http://www.mindtheproduct.com/2014/07/video-guide-roadmapping/
http://scaledagileframework.com/?s=roadmap
Moore, G. A. (2011). Escape velocity: Free your company's future from the pull of the past. New York, NY: HarperBusiness
Look at an actual map of roads. Do you see dates? Donât confuse a roadmap with a plan. A roadmap shows you how to get where you intend to go. And if you get off course, it shows you another way to get there. And it tells you how far youâve gone and how much farther you have to go. So you can estimate when youâll get to certain points, but thatâs the schedule - not the map!
Also â roads arenât straight. Expect turns, detours, obstacles.
The map is just a representation of the landscape. It could be wrong â itâs not real.
References:
http://jonkarpman.blogspot.com/ - 20 mile march â keep a cadence and work toward the goal.
http://www.mindtheproduct.com/2014/07/video-guide-roadmapping/
http://scaledagileframework.com/?s=roadmap
http://www.mindtheproduct.com/2014/08/video-changing-a-global-product-culture/
A portfolio roadmap starts to take into account what it takes to deliver the most important work at the earliest time possible â based on resource availability, dependencies, ability to execute and collective value.
Us this to look back at the product roadmap and revise it â based on the portfolio plan. (i.e. Envision the product, create PRODUCT roadmaps, incorporate into the portfolio, create a PORTFOLIO roadmap, adjust the PRODUCT roadmaps based on portfolio strategy, goals and capabilities.)
See also:
Release Train, http://Scaledagileframework.com
http://www.mindtheproduct.com/2014/07/product-roadmapping-prioritisation-portfolio/
First, establish flow. Think back to the coffee beans. Just getting them to flow through at a constant rate is the most productive thing you can do. Donât try to get more through the funnel than will fit â first get them to flow so you can measure the rate of value through the system.
Then, measure. Take that baseline measurement of what flow looks like.
Also â donât focus your staff on a numerical goal â focus them on a means to achieve better results.
Try to jam more coffee beans through a funnel.
I wonât go into this too much today â in short, place value on the things that are closest to the customer. Start at the end of the chain and work backwards on what it takes to give the customers what they need. Spend effort on completing things that are almost ready to move to the next stage â but work right to left, not letting supply outpace demand. (donât âpushâ things from one stage to the next â pull them as needed (or just before.))
References:
Collins, J. C., & Hansen, M. T. (2011). Great by choice: Uncertainty, chaos, and luck : why some thrive despite them all. New York, NY: HarperCollins Publishers.
Reinertsen, D. G. (2009). The principles of product development flow: Second generation lean product development. Redondo Beach, Calif: Celeritas.
Execution.
So now weâve established what Flow looks like, and have determined what Value is âŚ
To make this practical â this is nothing new: create some programs, rank them against some value criteria, then:
- Value STREAM Analysis.
Validate ability to execute. This doesnât have to be a complicated process using a PPM tool.
In fact, a whiteboard works better.
---------
How do we turn this into work for teams? How to define programs, estimate and promise delivery?
How do we promise stuff to the market? (or users, if internal)
when do we promise/ announce?
*Using kanban, etc. Still canât *promise* anything â but we can gain control over more environmental factors - (cycle time data/ estimation, focus)
Reference:
https://www.bmgi.com/resources/articles/seven-steps-hoshin-planning
Demand management
Estimate on ideal team weeks, not on fte. Use Average Cycle Time to estimate.
Project Manager becomes Program manager â manage multiple efforts, not individual projects.
(Get a PgMP or PfMP !)
A pit crew takes lots of individual skills â but the race is won by the team. Imagine if the carâs owner tried to allocate crew members based on how long their job took in the pit.
The pit crew knows that their job is to work together to get the pit time as low as possible â let them figure it out.
Read More:
http://www.rallydev.com/community/business-agility-0
(Is there some way we can PULL the patientâs needs?)
Who here has ever been to a doctor?
Between the time you recognize the need to visit and the time you have a cure, how much time do you waste?
(list)
Which of these steps actually add value? What is the elapsed time/ cycle time? What if there were a system where you describe your symptoms and get a remedy within minutes? How great would that be? Think of all the waste we could cut out of this system.
Now think about your own operations. How much time do you spend waiting for no reason, letting WIP sit idle? Where can you cut waste?
This is called Value Chain analysis.
*If the doctor only saw one patient at a time, would that mean less waiting? What if the doctor saw two patients at a time? From the previous slide, we know what flow looks like and we can measure the rate of value through the system. So now do we get more value through when we have one patient at a time or two? Letâs test it. Letâs measure. (I should add that you can create mathematical models that can take the place of much testing â although you still need to test once youâve created a model that appears to increase efficiency.)
*If we built a self-diagnosis machine, would that speed up delivery? What about quality?
What changes can we make that will do the most to eliminate delays in value delivery? (And does it affect quality?)
All good areas of study and important to understanding lean, Kanban, flow.
Reference:
https://www.coursera.org/course/operations
https://www.udemy.com/operations-management
Fix the biggest problems that 1) cause the most costly delays and/or 2) limit flow/bandwidth/ throughput.
Donât focus on âWhat you can controlâ â focus on the biggest, costliest problems with delays & throughput. If itâs out of your control, find an advocate.
Donât make assumptions and donât manage on intuition. Use experimentation/ testing and data to make decisions.
Focus on throughput, not on cost cutting - Fix what limits throughput, not what cuts costs.
There is a limit to how much cost-cutting you can do â and eventually, your mode of operation is to contract/shrink.
(Cost-cutting may be beneficial if costs are way out of line.)
More value through the system, faster. Not the same value through the system, cheaper.
Focus on flow before focusing on bottlenecks.
Donât fix âlow hanging fruitâ problems. These are a distraction. Youâre missing 80% of the tree. Fix the biggest problems that 1) cause the most costly delays and/or 2) limit flow/bandwidth.
(Yes, I said fix problems with costly. But I mean delays â limits to throughput â fix the delays that cost the most in terms of throughput.)
**Cost of Delay is THE single most important thing to fix. (reinertsen)
Reference:
Reinertsen, D. G. (2009). The principles of product development flow: Second generation lean product development. Redondo Beach, Calif: Celeritas.
Adding value âvs sucking value
AT OCLC â I switched our measurement from âAre we doing the right things at the right timeâ to simply âHow long does it take us to do anything?â WHY? Because getting work completed and putting value into production was the #1 change I wanted to invoke. So we started measuring success as: once we start on something, do we complete it on schedule? Is it adding value or sucking value? (either by being late or needing extra help.) (Can people game this? You bet â but for the better!)
Use metrics to change behaviors, make decisions. Every metric should have a threshold that triggers an action.
And rather than measure âare we doing the right things?â I just trust that the prioritization process is good. Because for now, it is. Our problem has never been whether we know the best thing to work on, nor has it been that the teams donât work fast enough. The problem has always been that we bite off more than we can chew. So thatâs what we measure. And people respond to that by making sure they can finish what they start before they start it.
Tradeoffs:
Productivity - vs Responsiveness - Efficient Frontier
http://en.wikipedia.org/wiki/Efficient_frontier
You have a great car, but itâs outdated. Itâs not going to run much faster by adding better parts. You need a new design. Take the time â pull off the road â design a new vehicle. You need to put real effort into changing.
There is an incredible amount that I have skipped today. So I want to extend the offer to you that if you have more granular questions or are looking for good resources to answer questions specific to your organization, you can contact me and Iâll do my best to help. I have extensive research on the subject, but only selective memory! (Slides & references will be available)
Complex System
Takes effort, but reduces waste
Takes guidance & facilitation, but simplifies plan
Requires systems thinking and process learning â or faith.
Adopt the Premise First - âDevil in the Detailsâ â stay on the higher plane.
Identify Constraints â to adapt, not to criticize.
Plan/ Do/ Study/ Act - to implement, execute, learn and adjust the process.
Understand first,
Action plan second
While you need to learn big, you can start small. Create an action plan for implementation. Hereâs the trick though â you have to understand the big picture. You may not know just how to implement the whole thing, but you have to understand lean as a system so you donât get caught in the trap of trying to make it jive with an old way of thinking.
Lean Action Plan: http://www.lean.org/WhatsLean/GettingStarted.cfm
A caution on the reading list â like I said at the beginning of this talk â you first need to seek understanding. Create your own philosophy. You canât find a good cookbook â take ingredients from everywhere, understand how they can work together and cook it yourself. Tomorrow, make something better. This is about learning and changing. (Plan Do Study Act)
What are YOU taking away from this session? How will you put it into action? What do you need to know more about?
Taste this choc bar & describe to someone.
Now do they know what it tastes like? Are you sure? If I gave you some chocolate , could you ID this (described) choc it in a blind taste test?
I can tell you lots of things today. That wonât take the place of context, experience and experimentation. Plus thereâs so much that Iâm leaving out.
Also â you can get a basic understanding from watching Youtube videos or reading LEAN in 30 seconds or some other lightweight âHow toâ books published by AgilePMPress ⌠But really, you need to knuckle down and read some heavyweight operational management texts â and do some math homework so you can really understand how parts of a process interact and affect each other. This is real math, not armchair, intuitive âsounds correctâ management.
Now â how do you prioritize? âŚ
(Analytic Hierarchy Process (AHP), other math-based scoring models)
No time today to get into this â AHP may be a good model for you to try if you have difficulty with prioritization across multiple criteria/ multiple stakeholders.
bubble chart. See why common currency matters?
outcome chart. See why common currency matters?
Make your biggest constraints internal, so you can change them at will.
Eg
*Rate of growth in a market segment
* supply (capacity) and demand
* Demand â via marketing strategy, donât create more demand for your product than you can supply.
Capacity limits
Capacity limits â do not plan utilization at 100%
Much easier to control these and adjust them as your throughput rises (or falls.) It would be harder to satisfy demand if youâre always at capacity or always way overstaffed (waste)