Jul 16, 2018| Dan Young
Through use of Value Stream Mapping, Impact Mapping and Cost of Delay we’ve helped IT leadership teams to break out of the iron triangle of traditional project management thinking. Instead they’ve been able to understand their organisation as a system, get visibility of things that really matter and find new ways to set direction, prioritise and measure progress.
Traditional management thinking can create staggering amounts of waste. In one of our enterprise customers 40-50% of their capacity was being used for rework. Half of their payroll was being spent on creating defects and fixing them.
If you’ve worked in any organisation where the number of employees is measured in thousands you’ve probably experienced some common behavioural patterns and frustrations.
Firstly it seems impossible to reach a decision; nobody can seem to agree on what the “right answer” is.
Next, folks get upset because the plan keeps changing as new information is discovered, which has an impact on the mesh of internal commitments that got made based on the plan.
Then when you look at progress during delivery of the plan, it’s obvious that everyone is really busy but it takes so long to get anything done.
To understand why we end up in this situation, we need to consider the lens through which business leaders traditionally view their organisations. We inherited our working methods from the industrial revolution but we never upgraded them for knowledge work in the 21st century. This means we’re usually stuck in a rut, asking questions about the three most visible aspects of our work:
When we’re trapped inside this triangle of thinking, all our management efforts actually tend to make things worse:
It’s painful, isn’t it? These methods have long proven themselves to be ineffective in situations where we face a lot of uncertainty, yet we keep trying to use them.
At EngineerBetter we often discover that our customers have a management approach that creates friction, so we started using a number of techniques to help them get to a better place.
When IT leadership teams have been tasked with reducing costs, helping them acquire knowledge of the organisation as a system can provide some much needed enlightenment. To make this visible we can use the lean-management technique of Value Stream Mapping to discover which parts of an organisation are on the critical path to delivering something useful and understand the impediments to flow.
If enterprise IT delivered physical things we’d have visibility of flow, but unfortunately information is invisible which usually leads to some unfortunate management decisions.
Imagine you’re in charge of allocating money to maintain a water pump which turns a water wheel, except the water is invisible. The pump is leaking badly but you don’t see any water leaking out onto the floor, you just see the wheel turning slowly. You’re standing there holding a bill of materials for the pump and feeling very frustrated.
If you don’t understand the whole system and its problems, you’ll likely try to optimise by making changes to what is visible to you. For example, you might assume that the way to achieve cost efficiency is to pay less for the parts of the pump, since you have no visibility of the leaks. There is a strong possibility that modifying the pump to use cheaper parts will simply make the leaks worse.
If you can understand the way in which value flows through your system you can begin to see where your money is really going. Usually this isn’t overspending on the parts of the system, but the shocking amount of waste we simply aren’t aware of. For example, when we looked at the software development value stream in one of our enterprise customers we found poor internal feedback loops meant that 40-50% of their capacity was being used for rework. In other words, half their payroll was being spent on creating and fixing defects. They actually had a quality problem, not a spending problem.
Studying the system gives us appreciation of flow and visibility of where waste occurs in our system. One of the most common sources of waste is excessive planning and analysis. Usually a series of decisions and commitments become dependent on this plan, but it soon ends up becoming irrelevant, as the world changes around us.
How might we change the way we define our objectives, to cope with change and reduce this waste?
We often talk about defining outcomes instead of outputs when describing agility in senior leadership, but how is this done? Often folks have a shopping list of things to be done, but the business intent behind them is poorly communicated. We’ve found that Impact Mapping is a fast way to reverse engineer an exec leadership shopping list into the desired outcomes before building a backlog.
Humans like to jump to solutions rather than understand problems and the iron triangle compounds this effect by encouraging a bias for action. Traditional management systems reward having certainty over the plan for delivery. It’s understandable why communication of ideas as outcomes instead of outputs is not something most people are used to.
One technique we’ve used to help surface intent and outcomes is to ask folks to tell stories about the business after their solution has been implemented. What would be different in the world as a result of having this thing?
Once you’ve discovered the outcomes you can then identify the actors involved and what change in behaviour we want to influence to achieve it. This leads to the actual deliverables in small enough chunks to write stories. Now everyone in the room can quickly validate their solution ideas within the context of business goals.
As you can hopefully see, this sets up a new relationship between management and delivery teams. We’ve decoupled the business goals (which are less likely to change) from the specific deliverables (which are highly likely to change). Teams can iterate on deliverables while being measured against the goal.
Now we know what our desired outcomes are, how do we know which is the most important? If we can identify what business outcomes are worth, not just what they cost, we know how the value of these things is leaking away over time. This allows us to quickly make prioritisation and tradeoff decisions. The tool for quantifying business value is called Cost of Delay. Like many Lean and Agile concepts, Cost of Delay helps facilitate a better quality of conversation. When we’re forced to surface all our assumptions about why something is valuable, it allows everyone to examine these assumptions.
When you’re expressing your ideas as measurable business outcomes, rather than specific deliverables, you enable the system to cope with uncertainty and iterate towards the solutions that will move the needle on these outcomes. Attaching metrics to goals allows teams to be measured in a far more meaningful way than whether they have delivered a particular set of features on time.
When we communicate our intent behind an epic or story as a hypothesis to be tested we frame our roadmap as a runway of questions to be answered within a time window, instead of “scope” to be delivered by a deadline.
All of these techniques contribute to a shift in thinking that alleviates the friction that commonly occurs between management and agile development teams. We’ve always aimed to help software teams work on the most important things in the simplest possible way, but by working with senior leaders in the above ways we can raise levels of mutual empathy and understanding.
If we change the internal commitments that are made then we ultimately improve flow. No more broken promises about arbitrary scope that hasn’t been delivered on time - just sustainable, continuous delivery of the most valuable ideas, straight to end customers.