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Agile Base Patterns:The Agile Way of DoingDan Greening dan@senexrex.com

Copyright 2015, Senex Rex LLC. This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License. 38

• Managing Director: Senex Rex Agile Consulting

• Certified Scrum Coach (CSC)

• Head coach: Skype, Citrix Online

• Startup successes

• PhD, computer science, UCLA

Dan Greening

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• Why did lean and agile methodologies arise?• What patterns do they share and why?• Why do organizations fail to sustain agility?• What characteristics do agile managers share?

Agenda

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Toyota• JIT/lean manufacturing• Continuous improvement• Top-down alignment• Collective responsibility• Respect for people

Most profitable

Toyota vs GM

General Motors• Forecast and inventory• Contract-dictated actions• Plant manager autonomy• Role-based responsibility• Class-based association

Bankrupt35

Software Project Failures

Standish Chaos Report, 2011Charette, “Why software fails,” 2005

Year Company Description Failure cost Total for year2005 Hudson Bay Co. [Canada] Problems with inventory system contribute to $33.3 million* loss. $33,300,000

UK Inland Revenue Software errors contribute to $3.45 billion* tax-credit overpayment. $3,450,000,000 $3,483,300,0002004 Avis Europe PLC [UK] Enterprise resource planning (ERP) system canceled after $54.5 million† is spent. $54,500,000

Ford Motor Co. Purchasing system abandoned after deployment costing approximately $400 million.

$400,000,000

J Sainsbury PLC [UK] Supply-chain management system abandoned after deployment costing $527 million.†

$527,000,000

Hewlett-Packard Co. Problems with ERP system contribute to $160 million loss. $160,000,000AT&T Wireless Customer relations management (CRM) upgrade problems lead to revenue loss of

$100 million.$100,000,000 $1,241,500,000

2002 McDonald’s Corp. The Innovate information-purchasing system canceled after $170 million is spent. $170,000,000 Sydney Water Corp. [Australia] Billing system canceled after $33.2 million† is spent. $33,200,000CIGNA Corp. Problems with CRM system contribute to $445 million loss. $445,000,000 $648,200,000

2001 Nike Inc. Problems with supply-chain management system contribute to $100 million loss. $100,000,000 Kmart Corp. Supply-chain management system canceled after $130 million is spent. $130,000,000 $230,000,000

2000 Washington, D.C. City payroll system abandoned after deployment costing $25 million. $25,000,000 $25,000,0001999 United Way Administrative processing system canceled after $12 million is spent. $12,000,000

State of Mississippi Tax system canceled after $11.2 million is spent; state receives $185 million damages.

$196,200,000

Hershey Foods Corp. Problems with ERP system contribute to $151 million loss. $151,000,000 $359,200,0001998 Snap-on Inc. Problems with order-entry system contribute to revenue loss of $50 million. $50,000,000 $50,000,0001997 U.S. Internal Revenue Service Tax modernization effort canceled after $4 billion is spent. $4,000,000,000

State of Washington Department of Motor Vehicle (DMV) system canceled after $40 million is spent. $40,000,000Oxford Health Plans Inc. Billing and claims system problems contribute to quarterly loss; stock plummets,

leading to $3.4 billion loss in corporate value.$3,400,000,000 $7,440,000,000

1996 Arianespace [France] Software specification and design errors cause $350 million Ariane 5 rocket to explode.

$350,000,000

FoxMeyer Drug Co. $40 million ERP system abandoned after deployment, forcing company into bankruptcy.

$40,000,000 $390,000,000

1995 Toronto Stock Exchange [Canada] Electronic trading system canceled after $25.5 million** is spent. $25,500,000 $25,500,0001994 U.S. Federal Aviation

AdministrationAdvanced Automation System canceled after $2.6 billion is spent. $2,600,000,000

State of California DMV system canceled after $44 million is spent. $44,000,000Chemical Bank Software error causes a total of $15 million to be deducted from 100 000 customer

accounts.$15,000,000 $2,659,000,000

1993 London Stock Exchange [UK] Taurus stock settlement system canceled after $600 million** is spent. $600,000,000 Allstate Insurance Co. Office automation system abandoned after deployment, costing $130 million. $130,000,000London Ambulance Service [UK] Dispatch system canceled in 1990 at $11.25 million**; second attempt abandoned

after deployment, costing $15 million.**$26,250,000

Greyhound Lines Inc. Bus reservation system crashes repeatedly upon introduction, contributing to revenue loss of $61 million.

$61,000,000 $817,250,000

1992 Budget Rent-A-Car, Hilton Hotels, Marriott International, and AMR [American Airlines]

Travel reservation system canceled after $165 million is spent. $165,000,000 $165,000,000

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Agile organizations can• Sense• Adapt• Createfaster than chaotic change

Why do we care?

Agility Defined

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Chaos Creates Opportunities

Everyone’s ability to predict the future degrades exponentially with timeSo create a company that exploits this chaos better than competitors

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• Economics drive everything we do• Economies produce value with limited resources

• Forces• Success metrics lag the work• Risk is rarely measured• Creativity generates variation

Pattern 1: Fixed-budget creativity often fails…

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• Identify top-level goals• Align everyone else

• Find leading metrics• Departments have their

own

…therefore, measure economic progress

Source: http://systemsthinking.org30

• Balance metrics

• Evolve metrics

Avoid perversity

Source: http://systems-thinking.org29

• Coherent company• Mission, vision and goals• Employee, team behavior

• If economy unchanging• We react• We learn• We forecast

Result (measure economic progress)

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• Measure economic progress• Proactively experiment to improve• Limit work in process• Embrace collective responsibility• Solve systemic problems

Agile Base Patterns: Are we agile?

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• Complacency lulls us• … we don’t hear a train

Pattern 2: Reacting is not enough …

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• Experiment• Brainstorm• Test a hypothesis• Control the experiment

• Evolve, but …• test revolutionary theories too

• Beware variability control• Can kill creativity

… therefore, proactively experiment

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Scrum Retrospective = Experiment

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Learn more: Seek 50% Invalidation

100% invalidated 100% validated

Where we learn the most

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“Stretch goals” “Agile is for the team”

• Hyperproductive teams• 40% higher quality• 100% faster production

• Jakobsen and Sutherland, “Scrum and CMMI: Going from Good to Great,” 2009 Agile Conference, IEEE.

• Organizations “disrupt themselves”

Result (Proactively Experiment)

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• Measure economic progress• Proactively experiment to improve• Limit work in process• Embrace collective responsibility• Solve systemic problems

Agile Base Patterns: Are we agile?

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• We feel better if everyone is busy• Why can’t they get stuff done on time?

Pattern 3: Utilization creates delay…

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Congestion

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Creative focus• We can remember

≤ 7±2 concepts

Cognition and Creative Focus

Source: Stanford University18

• Geometric Backlogs help make tradeoffs

• Incremental worktests theories faster

…therefore, limit work-in-process

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Limit WIP: Incremental Production

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• Rapidly deliver small increments of value• Possibility of rapid feedback• Cancellable work (sunk cost is low)• Learn faster than chaotic economy changes

• Manage # of options to match cognitive limits

Result (Limit WIP)

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• Measure economic progress• Proactively experiment to improve• Limit work in process• Embrace collective responsibility• Solve systemic problems

Agile Base Patterns: Are we agile?

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4: People create delay by avoiding responsibility…

Source: Christopher Avery

Tim

eNo problems get solved until we take responsibility

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• Provide people with…• autonomy, understanding, authority• Information radiators

• Teach Responsibility Process• Seek faster responsibility

…therefore, embrace collective responsibility

Wirksworth Town Cleanup 200912

• Greater elasticity

• In-team • Collaborative problem solving• Increased teaching and learning

Result (collective responsibility)

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• Measure economic progress• Proactively experiment to improve• Limit work in process• Embrace collective responsibility• Solve systemic problems

Agile Base Patterns: Are we agile?

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• Dependencies • Make us wait• Make us test more

• Handoff interference• Even more delays

5: External factors limit our agility…

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• Convert bosses to be agile• Build collaborative teams of peer managers

• Manage strategic work with agile• hiring, comp, review, M&A, etc.

• Ritualize and celebrate problem solving

• Analyze and change structural systems• Lean Kanban, ToC, Dependency Mapping, A3

…therefore, solve systemic problems

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Merge and/or Colocate to Speed Up

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• Culture of problem solving• Cross-department collaboration• Faster organization

Result (solve systemic problems)

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• Measure economic progress• Proactively experiment to improve• Limit work in process• Embrace collective responsibility• Solve systemic problems

Agile Base Patterns: Are we agile?

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Agile Base Patterns Agility LostMeasure progress Stopped measuring (agile for us, stretch goals)Proactively experiment Discouraged experimentation (risk aversion)Limit work in process No automation. Took on too much workCollective responsibility Assigned responsibilitySolve systemic problems High territoriality

Why do organizations lose agility?

Misalignment of organizational and individual goals

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What do agile managers do?

Agile Base Patterns Agile ManagersMeasure progress Measure department’s service to customerProactively experiment Create low-risk experimentsLimit work in process Limit departmental work in processCollective responsibility Embrace organizational responsibilitySolve systemic problems Teach, mentor, coach their skills

Top-Down Agile beats Bottom-UpPeople working for an agile manager must become and sustain agility, to realize the manager’s personal goals

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http://senexrex.com/category/agile-base-patterns/

• measure economic progress,• proactively experiment,• limit work in process,• embrace collective responsibility, and• solve systemic problems.

References: Agile Base Patterns

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http://senexrex.com/blog

Dan Greening+1(415)754-8311dan@senexrex.com

Sustained Agility

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