The Lean Mindset Workshop Montevideo...The Job: Bring Entrepreneurial Mindset to HHS Reluctance: A Step Backward in lifestyle and compensation No Surprise: Lots of dedicated workers

l e a nsoftware development

www.poppendieck.comMary [email protected]@poppendieck.com

The Lean MindsetAsk the Right Questions

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The Lean Mindset

Great OrganizationsThe Myth of the Selfish Gene Start with WHY Case Study: Government The Science of Cooperation

Energized WorkersThriving on Challenge Motivation Do Incentives Work? Case Study: Teamwork

Delighted CustomersSolve the Right Problem Measuring Customer Delight The Role of Design and Engineering Case Study: Product Development

Genuine EfficiencyThe Fastest Learner Wins Resource Efficiency vs. Flow Efficiency Case Study: Telecom Modern Software Engineering

Breakthrough InnovationLiving With Black Swans Why Good Companies Die Case Study: Innovation in Government Reverse Innovation and Uruguay

December 13 Copyright©2013 Poppendieck.LLC2

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How Great Leaders Inspire Action

Start With Why

WHAT

HOW

WHY

http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.htmlSimon Sinek


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Harvard Graduate (Economics)Booz Allen Hamilton Consultant (Managed Care)Athenahealth (1997)

Maternity Clinic (Opps…) Health Care Records (Got it right!) Very successful IPO (2007)

Retirement .........Act IIUS Health and Human Services CTO (2009)

Purpose: Improve the health, safety, and well-being of America The Job: Bring Entrepreneurial Mindset to HHS Reluctance: A Step Backward in lifestyle and compensation No Surprise: Lots of dedicated workers in the government The Surprise: The amazing databases of HHS

Todd ParkInspiring Government Workers


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How? Data Liberation

Artist Regina Holliday

2010 2011 2012

Todd Park – Federal Government CTO


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Impossible Public Goods

Why do so many people make so many small, “free” contributions?


The Myth of the Selfish Gene

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Reciprocity

There is one word which may serve as a rule of practice for all one’s life:

Reciprocity – Confucius

Direct Reciprocity:Treat others the way you want them to treat you.

Indirect Reciprocity:Pass my good deed to you on to others you meet.


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It’s All About People

The secret to success is to take good care of your employees, because then they will take good care of your customers, and satisfied customers lead to a successful business.

Focus on three things: Create a great place to work, provide customers with what they really want, and make sure that the airline always makes a profit so it can stay in business for the long term.

December 13 8Cop

James Parker – CEO of Southwest Airlines – Do the Right Thing

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The Science of Cooperation

The Tragedy of the Commons Self-Governing Communities


or

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Human Survival Depends on Successful Communities

Elinor Ostrom, Nobel LaureateSuccessful self-governing communities have these principles in common: 1. There are clearly defined community boundaries.2. There are rules of use that are well matched to the local conditions.3. Most individuals affected by these rules can participate in modifying the rules.4. Community members set up a system for monitoring compliance.5. A system of graduated sanctions is used.6. Low-cost conflict resolution

mechanisms are available.7. External authorities respect the right of

the community to devise its own rules. 8. Governance activities are organized in

multiple layers of nested enterprises.


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What is the Best Group Size for Cooperation?

Robin DunbarThe human social channel capacity* limit is ~150.Group SizesAn ‘inner circle’ of about 3-5 very close friends or family membersA ‘sympathy group’ of 12-15 close friends who care about each other’s fateA ‘hunting group’ of 30-50 colleagues who cooperate to accomplish somethingA ‘clan’ of 150 people who maintain stable inter-personal relationshipsA ‘tribe’ of about 500-2500 people who speak the same language or dialect

* (The number of individuals with whom a stable inter-personal relationship can be maintained)

The Hunting Group:Product TeamsStartup CompaniesOpen Source ProjectsConference Organizations

Hunting groups have a trusted leader.

Clans are found in:Pre-Industrial Villages Amish & Hutterite CommunitiesMost Military CompaniesUniversity DepartmentsGore & Associates


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The Purpose of Business

1950: The Depression Generation

1975: The Boom Generation

2000: The Tech GenerationYes, the planet got destroyed. But for a beautiful moment in time we created a lot of value

for shareholders.

“We try never to forget that medicine is for the patient. It is not for profits. The profits follow; and if we have remembered this, they have never failed to appear. The better we have remembered it, the larger they have been.”

--- George Merck, President, Merck & Co.

“The Purpose of Business is to Maximize Shareholder Value.”

“We don’t build services to make money; we make money to build better services.”

--- Facebook

US CEO Income1976 36XAvWkr1993 131XAvWkr2010 369XAvWkr

--- Eric Schmidt, GoogleDecember 13 Copyright©2013 Poppendieck.LLC12

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The Lean Mindset







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The Three M’s of Motivation

MasteryMeaning Membership

NOT Money!Rosabeth Moss Kanter

Harvard Business School


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Self-fulfilling Prophecy


Our Actions(toward others)

Others Beliefs(about us)

Others Actions(toward us)

Our Beliefs(about ourselves)

Self-fulfillingProphecy

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Does Incentive Pay Work?

1. Money doesn’t motivate for tasks that require: Cognitive skill Collaboration


2. People have a great need for fairness,and will not give their best efforts if they think they are paid unfairly.

3. You get exactly what you measure with bonus systems, but it is impossible to measure exactly what you need.

4. Engagement works much better than money.

(In these cases, money degrades performance.)

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Remember times when:You are deeply engagedDistractions disappear Time evaporates

This is called FLOW.

What is your Passion?

Skills

Challeng

esBoredom

Anxiety

Mihaly Csikszentmihalyi(me-high chick-sent-me-high-ee)

“The best moments [in people’s lives] usually occur when a person’s body or mind is stretched to its

limits in a voluntary effort to accomplish something difficult and worthwhile.”


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Birthdays

Elite hockey players in Canada probablyhave birthdays toward the beginning of the year.*

In any elite group of Canadian hockey players 40% were born between January and March 30% were born between April and June 20% were born between July and September 10% between October and December.

The same pattern exists in Football.

What might account for this anomaly? The age cut-off date for youth hockey in Canada is January1.

*Outliers, by Malcolm Gladwell, 2008, pDecember 13 Copyright©2013 Poppendieck.LLC18

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Where Does Expertise Come From?

10 Years / 10,000 hours of Deliberate Practice Identify a specific skill that needs improvement. Devise (or learn from a teacher) a focused exercise:

– designed to improve the skill. Practice repeatedly. Obtain immediate feedback:

– adjust accordingly. Focus on pushing the limits:

– expect repeated failures. Practice regularly & intensely:

– perhaps three hours a day.

Athletes

Musicians

DoctorsSoftware Developers


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The Four Elements of Deliberate Practice

1. Coach

2. Challenge

3. Feedback

4. Progress


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Exploration: Seeking Gain

Roald AmundsenSouth Pole, 1911

(dopamine)

Two Kinds of Challenges

Safety: Preventing Loss

Beating Back the Red TerrorTennessee, 1925 (adrenaline)


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Regulatory Focus

Prevention-Focused Goals(Prevent Loss)

Typical Attitude: Is it safe? Find the safest option

Motivational Orientation: Duty and Obligation

Goal Pursuit Strategy: Vigilance

Response to Setbacks => redoubled efforts Praise => more relaxed efforts

Promotion-Focused Goals(Create Gains)

Typical Attitude: Let’s do it! Explore all the options

Motivational Orientation: Aspirations and Ideals

Goal Pursuit Strategy: Eagerness

Response to Setbacks => discouragement Praise => redoubled efforts

Regulatory Focus TheoryE. Troy Higgins

Columbia University


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Match Challenge to Focus

Goal Conflict Large companies struggle

with aspirational goals. Startups struggle with

safety-focused goals.

Regulatory Fit Theory People learn from childhood

to favor a regulatory focus. Situations can trigger a focus.Great goals fit the prevailing focus.

Which Goals Work Best?Goals for Pessimists

OrGoals for Optimists

???

Heidi Grant Halvorson – Succeed: How We Can Reach Our GoalsDecember 13 Copyright©2013 Poppendieck.LLC23

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Thriving on Challenge


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Double Output Every 2 years

At Intel, every department is involved in Moore’s Law.

Even PDE.(Product Development Engineering)

Especially PDE!

Post-silicon Validation Challenges, by Keshava, Hakim, & Prudvi (Intel), presented at DAC ’10, Anaheim, 2010

From First Silicon to PRQ(Product Readiness Qualification)

1 2 3

1. 2007-2008: Early Agile

2. 2009-2010: Advanced Agile

3. 2011-2012: Beyond Agile

Timeline


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Triple Productivity in 18 Months

20011 – 2012: Beyond AgileMoore’s Law required:

3X More Validation CyclesSame Funding and Time18 months to figure it out.

3X Working Group:Translate 3X to Specific Targets

Lean Product DevelopmentSolution sets converge through a series of Integrating Events (IE’s) before detailed design begins.

www.targetedconvergence.com December 13 Copyright©2013 Poppendieck.LLC26

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Have You Tested It?

Goal: Every two weeks, over a 48 hour weekend, software will be validated by placing 55,000 units in test sockets.Feasibility: Robot specs show it is capable of doing this.Coach: Have you tested it?Team: No…but –

Team decided to test 1500 parts.Robot broke down after 80….

It took a year of improvements for the robot to work reliably atthe needed volume and speed.



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Against All Odds

Aug 5, 2010 The San José Mine Collapsed

The Rescue Team

The Rescue Effort

Sponsor: President Sebastián PiñeraLeader: André Sougarret

– Codelco Mine Manager The Leadership Team:

32 Handpicked Codelco Mangers

Success!

IF the miners had survived and followed protocol, they would be in a ‘refuge’ area with enough food for 10 people for 2 days and water for a month.

Step 1 – Drill to the refuge area Many quick probes to learn how to drill accurately. [17 days]

Step 2 – Rescue the minersTry Plans A, B, and C to see which is fastest. [52 days – Plan B wins]

Leadership Lessons from the Cilean Mine Rescue, by Rashid, Edmondson, and Leonard, Harvard Business Review, 8/2013December 13 Copyright©2013 Poppendieck.LLC29

October 13 Headline:

All 33 Chilean Miners

Rescued in a Flawless

Operation

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Four Lessons


The Power of ChallengeNot Too Easy, Not Too Hard

The Need for ExpertiseAnd Expert Leaders

Think Try Learn Dynamically Intertwined Execution and Adaptation

It’s Not About Money Energized Workers Delighted Customers Sustainable Profits

“The best moments [in our lives] usually occur when a person’s body or mind is stretched to its limits in a voluntary effort to accomplish something difficult and worthwhile.”

There are no instant experts in chess… We would estimate, very roughly, that a [chess] master has spent perhaps 10,000 to 50,000 hours staring at chess positions.

In today’s world of apps and platforms, the boundary between developing and deploying software has largely disappeared. Continuous Delivery is now standard engineering practice for the web, cloud, mobile and Saas space.

Mihaly Csikszentmihalyi - 1991 Herbert Simon and William Chase - 1973

The energy fueled by being part of a winning team. The pride of a job well done.

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The Lean Mindset







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All Profits are Not the Same

Bad Profits – Profits that annoy customers.Nuisance Fees Exploitive PricingOnerous Contracts

Good Profits – Profits from enthusiastic customers.Great ExperienceDelighted Customers Top Recommendations

Bad Profits Create Detractors Demoralize Employees Undermine Loyalty Economics

Good Profits Create Promoters Energize Employees Fuel Sustainable Growth

The Ultimate Question 2.0 by Fred ReichheldDecember 13 Copyright©2013 Poppendieck.LLC32

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Measuring Customer Delight

1. Would you recommend our product (or company) to a friend or colleague?

2. What is the main reason for your answer? Follow-up is the heart and soul of the program!

The Ultimate Question 2.0 by Fred ReichheldDecember 13 Copyright©2013 Poppendieck.LLC33

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For Wicked Technical Problems Engineering Leads Development

The FBI Case Management System*2001-04 Virtual Case File System @ $170 million – abandoned2005-10 Sentinel developed under contract – largely abandoned 2010-12 Sentinel developed internally with agile methods – success Three Wicked Problems

1. Security 2. Migration 3. Integration

Not understood by FBI personnelLacked Engineering SkillFocused on Program Management∴Ignored by the Contractor

Finally addressed – FBI development team given responsibility

*Jerome Israel, “Why the FBI Can’t Build a Case Management System” IEEE Computer, 6/2012December 13 Copyright©2013 Poppendieck.LLC34

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Amateur Design

December 1335 Copyright©2013 Poppendieck.LLC

Control projects with the critical-few results thatdefine value. One page! Make sure those results are business results, not technical results.

Most so-called functional requirements are not actually requirements, they are designs to meet unarticulated, high-level, critical requirements.

Give developers the freedom to discover how to deliver those results.

The worst scenario I can imagine is when we allow real customers, users, and our own salespeople to dictate ‘functions and features’ to the developers, carefully disguised as ‘customer requirements’. If you go slightly below the surface of these false ‘requirements’ you will find that they are not really requirements. They are really bad amateur design for the ‘real’ requirements.

From: Value-Driven Development Principles and Values by Tom Gilb, –Agile Record, July 2010

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The Role of Engineering

Decades of successful software development without detailed specifications, a backlog of stories, or long list of features and functions.

Requirements for a Process Control System1. It has to make good product.2. It MUST be on time.3. Operators must find it convenient to use.4. It will be maintained by the plant engineer.5. It should contain the latest technology.

Everything else is design!December 13 Copyright©2013 Poppendieck.LLC36

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Doug Deitz, Principal Designer, GE Healthcare

When Customer Experience is Central, Design Leads Development

80% of Children ages 3-7 required sedation.


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Solve the Right Problem

What is the biggest waste in Software Development?Building the Wrong Thing

What’s the 2nd biggest waste in Software Development?Complexity caused by all that extra stuff.

How do we stop building the wrong thing?Build a Minimum Viable Product

Try it with real customersMeasure the Response

LearnDecember 13 Copyright©2013 Poppendieck.LLC38

Repeat

Model

BuildMeasure

Learn

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Beyond Agile Development

https://elearning.industriallogic.com/gh/submit?Action=PageAction&album=blog2009&path=blog2009/2011/agileVsLeanStartup&devLanguage=Java

Adapted from chart by Joshua Kerievsky, Industrial Logic, 8/2011

Agile Development

Product RoadmapProduct Vision

Release Plan“On-Site Customer”

Product Owner

User StoryContinuous Integration

Definition of DoneAcceptance Test

IterationBacklog

Iteration Review

Customer Feedback

Lean Startup

Business ModelProduct-Market Fit

Minimal Viable Product“Get Out Of The Building”

Entrepreneur

HypothesisContinuous Deployment

Validated LearningSplit Test

Build-Measure-Learn Loop“To Learn” List

Persevere or Pivot

Actionable Metrics

Model

BuildMeasure

Learn


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Mgmt

Create aThink Itsquad

Worth prototyping?

Tech

DesignProd

Write narrativeDefine metricsBuild prototype

x

x

x

Worth building?

Mgmt

Yes!

Yes!

Not yet

Expand to a Build It squad

Internal releases

Prod DefNarrativeMetrics

MVP good enough for real users?

Mgmt

Release MVP to few % of users

Measure, learn, adapt A/B test

Good enough for full rollout?

Mgmt

Squad

Squad

Release to 100% of

users

Yes!Continuously tweak,A/B test,measure

MVP

MVP

<



Think It Build it

Ship itTweak it

Productidea!

How Spotify Builds ProductsBy Henrik Kniberg

Copyright©2013 Henrik KnibergDecember 13 Copyright©2013 Poppendieck.LLC40

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The Lean Mindset







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Two Kinds of Efficiency


This is Lean: Resolving the

Efficiency Paradox By Niklas Modig,

Par Ahlstrom

Reso

urce

Eff

icienc

y

Flow Efficiency FastDelivery

SlowDelivery

High Utilization

LowUtilization

W A S T E

PU

LL

X X X X X

TrafficJam!

Genuine Efficiency

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Lesson:Stop trying to maximize “resource” efficiency.

Lesson:Stop trying to maximize machine productivity.

Queues are Bad

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Lower RiskMore Predictability

Risk Profile of a Typical Project

Risk Profile of a Lean ProductUNKNOWN

Predictable


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Shortening Product Development Cycle Time

Even out the Arrival of WorkMinimize the Size

of Things In ProcessMinimize the Number

of Things In Process Establish a Regular Cadence Limit Work to Capacity Use Pull Scheduling

Queuing Theory 101


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Use Pull Scheduling

Output CapacityInput Flow

(Wishful Thinking)

(Wishful Thinking)

Never


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How can we get done faster?

Ericsson Networks

1. Manage features, not projects.2. Decouple releases from development.3. Small, multi-discipline feature teams.

a) Product and technical leadership.b) Autonomy and responsibility.

4. Component specialists were consultants5. Central planning coordinates features

a) One feature (~3 weeks) at a timeb) Set date and allow content to varyc) Team worked with customer engineer

to determine detailed scope

The past was not good enough for the future.

Results:Twice as fastHigher hit rateSignificantly

higher qualityMore engaged

engineers

Mats LindénDecember 13 Copyright©2013 Poppendieck.LLC47

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Why aren’t we predictable?

Ericsson Networks

The past was not good enough for the future.

Accept uncertainty and learn how to live with it.

1. Manage features, not projects.2. Decouple releases from development.3. Small, multi-discipline feature teams.

a) Product and technical leadership.b) Autonomy and responsibility.

4. Reorganized management jobs5. Central planning coordinates features

a) Sets content and allow date to vary

Hendrik EsserDecember 13 Copyright©2013 Poppendieck.LLC48

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Case Study: Deliver Every Day

Time passes….Build every hourDeploy Last Good Build

End of Day AtlantaDeploy EOD Shanghai

We have to BUILD!Building is HARD!How often do we Build?How about every day?


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Modern Software Engineering

What does Continuous Delivery Really Mean?Software is deployed continuously, daily, twice a week, or at most weekly.Software that is deployed is not necessarily released for use; it can be turned on and off with switches or server/router assignments. For web, mobile, cloud or hosted software, a team is not “done” with any piece of work until their code is deployed to production. For enterprise software, a team is not “done” with any piece of work until their code is in trunk on version control and releasable. For new features that aren’t simple user requests, the team must also have run experiments on users to determine if the feature achieves the desired outcome.The team prioritizes keeping the system in a deployable state over doing new work. That means if at any point they are not confident they can take whatever is on trunk in version control right now and push it out to users through an automated, push-button process, they will stop work and fix that problem.


See forthcoming book by Jez Humble and others.

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The Lean Mindset







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Black Swans

1970: Jan Wallander became CEO


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Why Good Companies Die

Disrupted Technologies1. Film2. VCRS3. Record stores4. Movie rental5. Payphones 6. Landlines7. Long distance charges8. Fax machines 9. Phone books

10. Newspaper classifieds11. Maps12. Travel guide books13. Dictionaries, encyclopedias14. Mainframes, Minicomputers15. Floppy disks, CDs16. Mail, e-mail

Disruptive Technology


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e-EstoniaThe Digital Society

How did this small, post-Soviet nation become a global leader in e-solutions?

In the early 90s, Estonia's leaders were faced with a grim reality: theirs was a small country with a small population and few resources. If Estonia was to succeed, they knew, they had to find a way to push the country forward. With the internet having just arrived on the world stage, leaders made a conscious decision to use it to build an open, e-society – a cooperative project involving government, business and citizens that would mold the nation's path to the future.

Project Tiger Leap began in 1996 to prioritize Information Technology infrastructure. Legislation was passed that allowed the creation of infrastructure such as the national ID Card project and the X-Road, critical for developing the digital society systems that were to come.

December 13 Copyright©2013 Poppendieck.LLC54 http://e-estonia.com/e-estonia/how-we-got-here

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e-EstoniaThe Digital Society

Meanwhile, the private sector had also picked up a passion for high-tech solutions. The nation's banks had introduced online services that were ahead of anything in the West, while entrepreneurs were developing innovations like M-Parking and location-based services.

The trend continued after the millennium with more integrated e-solutions added each year and the country earning its reputation as a forward-thinking hotbed of practical tech-development.

Heading into its third decade of e-society development, Estonia is now the training ground for countries that want to introduce powerful solutions such as i-Voting, e-Cabinet, e-Health systems and more. Over 40 countries around the world are using Estonian e-solutions.


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Do’s and Don’ts based on Estonia’s experience:

Do – Create a decentralized, distributed system so that all existing components can be linked and new ones can be added, no matter what platform they use

Don’t – Try to force everyone to use a centralized database or system, which won't meet their needs and will be seen as a burden rather than a benefit

Do – Be a smart purchaser, buying the most appropriate systems developed by the private sector

Don’t – Waste millions contracting large, slow development projects that result in inflexible systems

Do – Find systems that are already working, allowing for faster implementation

Don’t – Rely on pie-in-the-sky solutions that take time to develop and may not work


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Reverse Innovation

2007: High End Systems –Had 70% Market Share $2b of $3b in salesBUT: How do we grow?2008: Commissioned Saras

Sachin LawandeDinesh Paliwal

Saras (adaptable)Aimed at emerging marketsSimple, inexpensive, modularNew new organizational and

product architecture

2009 Launch. $3b in profitable sales in 18 months. Vijay Govindarajan – Reverse InnovationDecember 13 Copyright©2013 Poppendieck.LLC57

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Reverse Innovation

GE Healthcare

“Our engineering and marketing teams now interact closely with the customers here [in India] to understand their requirements. We look at their work flow, their environmental limitations, their profitability issues and other factors and we then price, design and manufacture the products accordingly”** **Ashish Shah, general manager,

global technology, GE Healthcare

“We realized that the biggest impediment was that we were selling what we were making [rather than] making what the customers here needed.”*

*V. Raja, president and CEO of GE Healthcare-South Asia.

The MAC-i: EKG’s for Rs 9

The Vscan: $8000 Ultrasound unit the size of a mobile phone. Based on designs originating in China, it will revolutionize global healthcare.


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Why does Kenya Lead the world in Mobile Money?

M-PESA lets people transfer cash using their phones.Launched in 2007 by Safaricom, the country’s largest

mobile-network operator.Used by over 17m Kenyans, equivalent to more than

two-thirds of the adult population. Around 25% of the country’s gross national product

flows through it. By far the most successful scheme of its type on earth.Why? Because people needed a cheap, trustworthy

way to send money home.

December 13 Copyright©2013 Poppendieck.LLC59 See “The Economist Explains” – May 27 2013

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Solve Your Own Problems

Estonia – The most sophisticated e-government system in the world.

Kenya – The most sophisticated mobile phone money transfer system in the world.

India & China – The most sophisticated low cost medical diagnostic devices in the world.

Uruguay – You understand your problems better than anyone else in the world. No one can solve them better than you.


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The Lean Mindset

1. Great Companies Start with Why?

2. Energized Workers The Power of Challenge

3. Delighted Customers Don’t Guess – Experiment!

4. Genuine Efficiency Flow Efficiency Over Resource Efficiency

5. Breakthrough Innovation Small, experienced, decision-empowered teams


l e a nsoftware development

www.poppendieck.comMary [email protected]@poppendieck.com

Thank You!More Information: www.poppendieck.com

Documents

The Lean Mindset Workshop Montevideo...The Job: Bring Entrepreneurial Mindset to HHS Reluctance: A Step Backward in lifestyle and compensation No Surprise: Lots of dedicated workers