Kaizen in Paris

A lean evening

Yesterday evening I was back in Paris to give a presentation about “Lean and the Toyota Way“. As I walked from the train station to the offices of Zenika, I came across a large billboard announcing “Dorothy et le magicien d’Oz”. It’s reassuring to see that the fairytales are alive and well.

My friends at Zenika had arranged a nice place and provided some fine drinks and snacks. More than 100 people showed up, among them many of the French Agilistas. I chatted for a while with them about agile, lean and the upcoming XP Days France.

And then it was time to start the presentation. The auditorium was almost completely full.

The Toyota Way

The presentation explained the 14 principles of The Toyota Way of Managing and the many parallels with Agile methods. As I go through the principles I illustrate them with stories from projects I’ve worked on. Each time I do this presentation it changes, as I learn more and discover more great ideas in Lean.

There were some great questions and discussions:

  • “What can I do to introduce more Lean and Agile in my organisation?” – Apply the principles and values, set an example. Support and collaborate with others who apply these values.
  • “Are there any incompatibilities between Lean and XP?” – None that I can see.
  • “For Agile and Lean transformations to succeed we need support from management and workers. Often, we only have support from one of them.”
  • “Lean coaches are very direct, not afraid of saying it as it is to management. Is that something they’re taught?” – It does seem so, judging from the documentary Kenji Hiranabe showed at Agile 2008, where a Lean coach almost made a factory manager cry by bluntly pointing out all the flaws in the production line.
  • “Does Lean make you lose weight?” – A Gemba Walk a day helps 🙂

Unfortunately, I couldn’t stay for drinks afterwards because I had to rush to catch the last train back to Brussels. The next day I had another team to coach, another opportunity to “Develop exceptional people and teams”, the tenth principle of the Toyota Way.

I hope to see the participants again soon. See you at the XP Days France or a Zenika training session.

A bientôt!

What others say

Jean-Claude Grosjean summarizes the principles and contrasts them with the 7 principles of Lean Software Development and Agile.

Nicolas Martignole wrote a very extensive report on each of the principles and relates Lean, Scrum and XP.

Claude Aubry thinks “Obeya” is more beautiful than “War Room”. I fully agree. He currently tries to recreate the Obeya experience for an offshore team.

Thank you for the rapid and very detailed feedback!

Outliers and raising the capitalisation rate

The Story of Success

Father Christmas brought me a large stack of books. First off is an easy read, the new Malcolm Gladwell book “Outliers: The Story of Success“. In the book, Gladwell tries to dig deep to explain the causes of unusually successful people, the outliers that are so far beyond the statistical norm that they seem magical.

Why do some people become hugely successful corporate lawyers, wealthy captains of industry, billionnaire IT entrepreneurs or hockey stars?

First of all, there’s talent. But talent isn’t enough. It takes effort, practice and hard training to develop that talent. Gladwell states that you need at least 10,000 hours of practice and illustrates the number with examples of The Beatles, Mozart, Bill Gates and Bill Joy.

But talent and practice by themselves are not enough to explain the cases Gladwell examines.

It’s not only who you are, but where you come from

For example, if you look at the month of birth of successful Canadian hockey players, the statistics show that most of them are born in the first months of the year. A few years ago I heard about the study that showed the same weird result for Belgian football players. Coincidence? Fluke? Is there something in the air in those months that gives babies an edge in sports? Gladwell doesn’t think so.

You see, there’s a cutoff date to select promising young players. That date happens to be the end of the year. The children who are born in january are just a few days too young to be eligible, so they have to wait until next year. By then, they are 11 months older than the eligible children born in December. They are stronger, smarter and have had more practice. They are more likely to stand out, get selected and profit from intensive training given to talented children.

A similar case can be made for successful IT entrepreneurs: they were all at the right age and in the right environment to profit from the availability of computer time to develop and apply their skills.

Held back by systemic constraints

In the case of the hockey players, it is likely that children born in December are (on average) as talented and hard working as those born in January. If they don’t get selected, a lot of talent and effort is wasted.

Gladwell calls the rate at which talents make it the “capitalisation rate”. The capitalisation rate for hockey players is lower than it could be. Why? Because of an arbitrary systemic constraint: the decision to select and sign young talents based on one cut off day. This effect is known and repeatable across the world. When the cut off date changes, the distribution of children is changed accordingly. We’ve all been subject to this systemic constraint because schools work with a fixed calendar.

Should we just accept those constraints?

Raising capitalisation rates

If we wish to raise the capitalisation rates, we need to tackle similar systemic constraints. One hopeful chapter describes how a school system improves the results of its pupils. First they notice the systemic constraint:

  • children from richer backgrounds do better after the summer holiday as they have lots of stimulating activities;
  • children from poorer backgrounds do worse after the summer holiday as their environment is much less stimulating.

The solution: less vacation and more school. Which also leads to more hours of practice, the second factor of success. Which leads to more opportunities to succeed and provide a stimulating environment to their children.

The chapter about plane crashes is chilling. The chapter contains several transcripts from cockpit conversations right before a crash. One common element comes back: the pilot makes a set of small mistakes and no one dares to speak up.

Some airlines have many more accidents than others. These statistics correlate with the culture of the country of the airline. Geert Hofstede has compiled a set of cultural dimensions for countries. One of the dimensions is “Uncertainty Avoidance”. A high score indicates a culture that doesn’t like ambiguity, relies on procedures and plans and is likely to stick to procedure regardless of circumstance. Another dimension is the “Power Distance Index”: a high score indicates that authority is very respected and a more powerful or knowledgeable person will not be questioned easily.

Do high Uncertainty Avoidance and Power Distance scores correlate with high numbers of airline incidents? Yes. If something goes wrong you want people to speak up and consider alternatives to the routine. Knowing this, training can take into account the differences. For example, techniques to lower the power distance can be taught and applied in the cockpit. Again, dealing with the systemic constraints brings dramatic improvements.

What have we learned today?

I got two lessons out of this book.

First, the capitalisation rate on our teams. It is sometimes said that “Agile only works with really good people and teams”. That’s true. But Agile also makes the people a lot better by providing them with a better environment, support and many learning opportunities. We create communities, conferences and help each other get better. We raise the capitalisation rates within IT. But we can do a lot more if we have the courage to tackle the systemic constraints. For example:

  • Why are there fewer women than men in IT?
  • Why is IT seen as a “young man’s game”? Why don’t we value experience more (and keep reinventing yesterday’s mistakes)?  Don’t we need to put in our 10,000 hours to become proficient? Well, at least many of us put in many hours in death marches. I don’t know if that’s useful practice, though…
  • Why the division into “Business” vs “IT”? Aren’t we in this together?
  • Why the division into development, testing, maintenance, operations? Isn’t it all one value stream?
  • <your favourite constraint here>.

What small thing can you do to raise the capitalisation rate?

Secondly, Belgium was used as an example of a country with a high “Uncertainty Avoidance” culture. Yeah, we’re great at creating little rules to organise everything. We’re also great at breaking the rules, because they keep us from doing any useful work. But nobody must know we broke the rule, because we’re also a culture with a very high “Power Distance Index”. In this, we’re quite similar to France. Now, that’s not a culture that’s naturally predisposed to accept Agile methods. Except maybe, when they’re introduced top-down and are very structured?

On the other hand, The Netherlands and Scandinavian countries have a much lower Uncertainty Avoidance and Power Distance Index score. One would expect that they would accept Agile methods more easily.

Have a look at the scores for your country. Do they correlate in any way with the success and ease of introducing Agile?

Watch Gladwell present some of the ideas in the book:

On the Yellow Brick Road

2008: A Retrospective

Things I’m most grateful for:

  1. Creating new games with Vera and Portia. Lesson Re-Learnt: The best results come from collaboration.
  2. Creating and playing games with wonderful people and getting paid for it. Lesson Learnt: Turning what you love into your job won’t make it a chore if you genuinely love what you do.
  3. Meeting heroes like Eli Goldratt, Neil Armstrong, Daniel Dennett and Gerald Weinberg. Lesson Learnt: “The real voyage of discovery consists not in seeing new landscapes, but in having new eyes.”
  4. Travelling, meeting people and working with different teams in different settings. Lesson Learnt: Every team, every situation is different, yet we can all learn from each other.
  5. Applying the Agile values in work and life with the help of friends and peer-coaches. Lesson Learnt: It’s often hard to “walk the walk”; we need all the help we can get; that’s how we add value.
  6. The reaction of people who took part in XP Days or one of our sessions. Lesson Learnt: The best learning happens when we’re having fun. A big thank you to everyone I worked with.

2009: My Wishes

  • I wish to co-create more games.
  • I wish to co-create an Agile Fairytale and a Lean Fairytale.
  • I wish to co-create a fun Agile Analysis session.
  • I wish to apply more Lean and Theory of Constraints to expand agility beyond IT.
  • I wish to keep writing, as it makes me think.
  • I wish to keep on learning more every year and apply what I know to help great teams.
  • I wish to keep on working with great teams.
  • I wish you a Happy 2009 – may it bring you all that you deserve!

A Toyota Way evening in Paris

Lean presentation in Paris

On the 21st of January 2009 I’ll be in Paris to present an evening seminar on how to apply the Toyota Way management principles to Agile software development. The seminar is organised by Carl Azoury and Olivier Huber of Zenika.

To me, Agile is the application of Lean principles to software development. So, the presentation contains a lot of parallels between the two. A lot will be very familiar if you already know and practice Agile.

So, what’s left to learn? Some of the Toyota Way management principles aren’t in Agile methods. These principles are useful when we go beyond software development. There comes a moment in any successful Agile enablement when the development team is no longer the bottleneck. Suddenly, we’re faced with a completely different set of issues. Now that Agile gains more and more acceptance, we need to be able to deal with these new challenges or accept that most Agile transformations will either die or bring limited extra business value.

The more I read and learn about Toyota, the more I realise how much I don’t know and how many preconceived ideas I have to abandon. I need to keep learning. The Toyota Product Development System, for example, contains many counter-intuitive ideas like set-based design. Real Options thinking can help us understand why some of these techniques work. We’ve only started to scratch the surface of Lean ideas.

Toyota losing money? Impossible!

In the news, even Toyota is affected by the economic climate. They might even have to post the first loss since the early years. Isn’t Toyota invincible and perfect? Of course not. It will be a real show of faith in the Toyota Way if Toyota continue to keep on their workers, keep training them and keep improving to be ready when sales take off again.

Secretly, top Toyota management must be happy that this crisis happens now. One of their main concerns is complacency. No one should ever think that the work is “done”, now that Toyota is the biggest manufacturer. Hansei and Kaizen should be applied relentlessly, it’s always possible to do better. Nothing better than tough economic times to bring back the sense of urgency.

See you in Paris

The seminar is free, but you must register here. Don’t wait too long because places are limited.

See you there!

Real Options in the Real World

Real Options?

This Friday, Portia and I will present the “Real Options Space Gameat XP Days London. This strategy board game set in space allows players to experiment with Real Options concepts.

Real Options is a tool to optimize decisions: it helps us to consider and manage more possibilities and gives us more time to gather information, so that our decisions are better informed. The basic ideas are taken from financial options, but have been widened to be applicable to real-world management decisions.

There are several types of Real Options. Let’s see if the option metaphor is a useful one. How can we apply Real Options in the real world?

The option to delay a project

In this paper, Aswath Damodaran compares a Net Present Value (NPV) analysis with a Real Options analysis to decide which projects to fund when. Projects with a negative NPV now, might still become valuable later. That’s because the Real Options analysis takes into account the value of getting more information and therefore reducing risk and uncertainty.

We always have the Learning Option. We can always gather more information.

In the article, the delay is examined in a situation where the organisation has (or can buy) a way to get a hold on the market, like with a patent. We can create an option to delay a project even in a competitive market: if we have a shorter cycle time than our competitors we can afford to wait longer to start our projects. This gives us more time to gather market information. In a very volatile market, it can be more valuable to wait, to increase the odds of building the right product at the right time.

For example, if Toyota’s new product development time is 6 months shorter than a competitor, Toyota can afford to start development 6 months later. That’s 6 months in which to gather more information, six months in which they could see major swings in customer demand or in the market. That’s six months in which people can work on other projects.

So, if you decrease your cycle time you create options to

  • Increase your cash flow
  • Be first on the market
  • Delay the project, take the go/no go decision later, when we have more information

By using Lean and Agile methods to decrease cycle time, we create real options. Starting later may be the right thing to do.

There are more fun real options, like the option to abandon a project. What could be the value of abandoning a project?