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Lean Kanban!Portfolio Management
Milano, 05 Giugno 2015
PMO and Portfolio: Synergies to face a changing future
Gaetano Mazzanti
agile42
E=P 3MO
Osservatorio P3MO
sounds familiar?
�too many things to do, multitasking��
�slipping schedule�
�continuous resource reallocation�
�too slow to react�
demand
capacity
traditional portfolio traits
Governance
Compliance
Control
PMO
where is the PMO?
source Tom Fishburne
traditional portfolio tenets
Top-down
Centralized Annual Budget
Detailed Planning
Fixed date, fixed cost, fixed scope !
(fixed fate !)
Cumbersome electronic tools
starting vs finishing
people as “resources”
full capacity allocation
PUSH!
how is success measured
“vuoi che muoro?”Oops!
On time, On Budget & Conformant to Specs
we love tools!
the infamous matrix organization
“resource” pool
Project A Project BProject C
rebooting teams
project “completed”: !reboot the team and… !
start again ! ouch!
putting together different people each time and expecting to have predictable outcomes
Tuckman model of team development
project pool anyone?
Project A Project BProject C
team 1 team 2 team 3
Project D
focus on local efficiency vsfast end-to-end delivery of value
blindness to queues
___
process efficiency?
process efficiency =total time
active time ________
205
= 25%
!1!!2!!3!!4!!5!!6!!7!!8!!9!10!11!12!13!14!15!16!17!18!19!20!
elaborate do validate deliver
waitingactive
mmm…
inspired by Joakim Sunden
changing the focus
from efficiency and cost
to flow and value
What is Lean Kanban?
a management method for
directly improving service delivery
catalyzing improvements
evolving a business to be fit for purpose
principles of the!Kanban method
start with what you do now
agree to pursue incremental, evolutionary change
respect the current process, roles, responsibilities & titles
encourage acts of leadership at all levels in your organization – from individual contributor to senior management
Kanban!six core practices
visualize !limit WIP!manage flow !make process policies explicit!implement feedback loops!improve collaboratively, evolve experimentally
if you can’t see it!you can’t manage it
a Kanban board
visualize to understand the process
how the process works and fails to work for you and your customers
how it can be changed
Babbel portfolio
Siemens MC Portfolio
expose dysfunctions
Limit WIP
balancing!demand & capacity
demand
capacity
no matter how good you are at filtering!capacity is always full (and more)
100% utilization myth
idle work
vs
idle workers
efficiency (doing things right, always busy)
vs
effectiveness (doing the right things, fast)
multitasking?no, thanks
it’s easier to startthan it is to finish
let work flowlet work flow
visualize flow
ideas elaborate do delivered validate
B C
D
F E
A
visualize flow
B
C
D
F E
A
ideas elaborate do delivered validate
highlight issues
B
C
D
F E
A
ideas elaborate do delivered validate
!
!
slack (%)absorb variations
% capacity utilization
queu
e si
ze
queue size grows exponentially at high capacity
0"
5"
10"
15"
20"
25"
0" 10" 20" 30" 40" 50" 60" 70" 80" 90" 100"
Kanban board design
Ideasoo
Biz Case TechAssessment
15-30 5-12Committed
5In Progress
5Verification
5
RejectedCommitment
Point
Busines
s
R&D
source David J Anderson
Kanban board designs
source Pawel Brodzinski
demand analysis
where does work come from?how is value assigned (and verified) to initiatives?
is arrival rate predictable? (usually not)
Ideasoo
Biz Case TechAssessment
15-30 5-12Committed
5In Progress
5Verification
5
RejectedCommitment
Point
Busines
s
R&D
work item types
standardfixed date
urgent/emergencyintangible
…
smallmedium
large…
growthmaintenance
innovation…
different types of projects
D
H
J I
F B
A E C
6
M L K 2
1
1
O
Q
N
P
EXPEDITE LANE
G
ideas elaborate do done validate
growth
innovation
protect
expedite
WIP limits
source David J Anderson
conversations/decisions about what to…
work on now
postpone
drop
limiting WIP
fewer commitments
more options
finishing stuff-> stop starting start finishing
limit WIP by!team capacity / space available
mar apr may jun jul aug sep
TeamA
TeamB
TeamC
TeamD
TeamE
the magic of visualizing
waiting for approval initial design,
planning, outsourcing, mold design, etc.
demandcapacity
one week later
we must be able to!
react to unfolding events and!
adapt to changing circumstances
David J Anderson
but… we hate uncertainty
we prefer to take a decision now
even if it risks being wrong
i.e. annual budget (we remove options, we
increase risks)
selection vs prioritization
what to do next?
what to finish next?
last responsible moment selection
Discoverwhat to do
Do It Validate Outcome
Reject Commitment
keep your options open
pull
which parameters should you consider to select what to do next
Revenues, ROI, IRR, NPV, etc. ?
Do you know your Cost of Delay???
ROI Cost of Delay (1 month)
Project A 20% 30k
Project B 10% 100k
which one would you select next?
Cost of Delay
impact of time on value
how does the value of the things!
we are/will working on decays over time?
Cost of Delay
DurationCost of Delay
CoD / T
A 5 3 0.6B 2 2 1
If CoDA/ TA � CoDB / TBdo B first
Cost of Delay profiles
time
linear fixed date must do now
logarithmic intangible (large) fixed cost
Project Canvas
N = … % > …
what about!specs & estimations?
what if you have 50 candidate initiatives and only
15 can be done?
what’s the point (cost) of specifying and
estimating all 50?
precision is worthless
forecasting based on historical data
continuously check and adapt
before starting a project
we simply need a rough idea of size !and an understanding of (un)certainty
monitoring progress
90% complete
remaining 10% could take forever
is usually meaningless
90% of what?
monitoring progress
value delivered
vs
activity completion
burn-up chart
time
output
“Ah, but this is only good for Software”
mmm…
mmm…
mmm…
mmm…
Lean Kanban Portfolio traitsValue driven
WIP limited
Decentralized, Adaptive
Empirical, Probabilistic (statistical data support)
Lightweight business case/specs
Lightweight estimation
Physical Boards
Traditional Portolio ManagementCentralized Annual BudgetDetailed PlanningFixed date, fixed cost, fixed scope!(fixed fate !)Compliance driven, top-down approachCumbersome electronic tools
Portfolio Kanban!
is more about !
changing/transforming the organization!
than about !
stickies on a board
Mike Burrows