When leading enterprise-wide lean-agile transformations, there are often many topics that compete for attention. Additionally, for some of the topics, there is added complexity due to varying levels of detail that are relevant to particular groups within an enterprise. This article highlights four key checkpoints that can be used for both the attention and details dynamics, in order to frame effective and sustainable lean-agile transformations for an enterprise:
- drive a fundamental shift from “input” focus to “output” focus, by creating a focus on business value
- bridge five levels of detail that are inherently needed in enterprise execution, by applying a “nesting dolls” approach
- incorporate three business interests that underpin sustainable success, by making them explicit and visible
- tie execution together in a holistic way; a unified package where optimizations benefit the entire enterprise
The first checkpoint is to drive a fundamental shift from an “input focus” (e.g., traditional program management) to an “output focus” (e.g., business value leadership). This means moving away from a focus on the “input” measures of traditional management (scope, time, budget, utilization) and moving toward “output” measures that reflect business value outcomes (value, flow, validation, throughput). This does not mean topics such as scope, time, and budget become irrelevant; it simply means they are not the driving focus. The focus is shifted to business value and its related measures such as customer value, revenue, operational excellence, and cost of delay.
As part of this first checkpoint, it becomes important to frame each business value outcome as a journey with incremental feedback. In other words, each outcome is not just a big bang to “done”; it is a series of progressive increments that can be used to fine-tune the path to the end objective and that can accelerate the time to value realized. This provides a cohesive focus on business value by aligning the processes within a broader ecosystem of operational execution. Particularly when the business value is naturally a forecast due to unknowable market dynamics, the incremental feedback is used to align execution and to drive the output focus on business value outcomes.
The second checkpoint is to bridge five (5) levels of detail that attract varying levels of importance within different teams across the enterprise. The five constructs are woven together in a holistic approach much like a “nesting dolls” package; each stands on its own and can be used for its purpose, yet simultaneously it also is part of a larger “doll” while also containing “smaller dolls” inside. This set of “nesting dolls” delivers executable constructs for the following topics: the vision, the execution mechanics including relevant metrics and value delivery, and the mechanisms for incremental delivery and feedback. Here are the five levels of details we use in the “Nesting Dolls” Dynamic Flow for Lean Agility:
- Hierarchy of Purpose (Nieto-Rodriguez, 2016) aligns the Vision and frames key strategic decisions;
- Objectives and Key Results OKR* (Castro, 2016) quantifies execution for each Purpose;
- Minimum Business Increment MBI** (Shalloway, 2016; Shalloway, 2014) defines the value delivery and feedback increments for OKRs;
- Example Driven Discovery (Hussman, 2016) formulates increments for user journeys, feedback, and checkpoint milestones for each MBI;
- Continuous Delivery CD*** (Humble, 2011) produces and delivers the progression of sub-increments for each Example Driven Discovery checkpoint.
The third checkpoint incorporates three business interests that underpin sustainable success. These three interests are Priorities, Metrics, and Value Delivery. The following quotes are highly relevant for these business topics and are effectively packaged into a Hierarchy of Purpose discussion (Nieto-Rodriguez, 2016):
Performance. Traditionally, project performance indicators are tied to inputs (e.g., scope, cost, and time). They are much easier to track than outputs (such as benefits, impact, and goals). However, despite the difficulty companies have in tracking outputs, it’s the outputs that really matter. What are the precise outcome-related targets that will measure real performance and value creation? Reduce your attention to inputs and focus on those instead.
Think of your organization’s priorities. Are all of your diverse activities prioritized in the best interests of the organization as a whole?
By applying the Hierarchy of Purpose, executives learn that changing priorities is a fact of organizational life…. Priorities change and, if managed successfully, have the capacity to fundamentally change organizations, but only if top management makes tough choices.
The fourth checkpoint explicitly ties together each of the other checkpoints in a holistic way; it frames the unification of the other three checkpoints. The shift to focus on business value outcomes (checkpoint one) serves as the underpinning of all creation, alignment, and validation activities across the entire enterprise (checkpoints two and three). The three business interests (checkpoint three) are reflected directly in the five levels of detail (checkpoint two). More specifically, here’s the unified package:
- Priorities are reflected primarily in the Hierarchy of Purpose and the OKRs (#1 and #2).
- Metrics are reflected primarily in OKRs and MBIs (#2 and #3).
- Value Delivery is primarily reflected in MBIs, Example Driven Discovery, and Continuous Delivery (#3, #4, and #5).
Note that in this particular organization of the topics, there are specific detail levels in checkpoint two that directly connect two elements of each business interest of checkpoint three:
- OKRs are used to connect both Priorities and Metrics;
- MBIs provide connection between both Metrics and Value Delivery.
Mini Case Study
Here’s an example of how we applied these checkpoints when we started and executed a recent Lean Agile Enterprise transformation. First, we began in the middle with detail level #3 in the second checkpoint: Minimum Business Increments (MBI). This jumpstarted our journey, based on where we were at the time.
The construct of MBIs drove the most fundamental and critical transformation for us: shifting from measuring “activity” to measuring “value” (checkpoint one). For example, delivering a story or feature has no value if it is not consumed; i.e., if the feature is not purchased, activated, or used. The delivery process (including definition, creation, and deployment) is essentially a set of activities that provide potential value, but it is the consumption (purchase, activation, or use) of the delivery that realizes the value. [Note: jumping ahead to how “much” value is realized in each of the various forms of consumption is a topic for future articles; for now let’s simply differentiate “value” from mere “activity”.]
The shift to MBIs transformed our thinking from “input” to “outcome” and the value of the shift was recognized almost immediately after our initial MBI delivery; we used our Google Analytics metrics and compared new to baselines, and the result demonstrated positive validation of improvement through the execution of our approach. These initial accomplishments also opened up the next realization: we needed context for the MBIs because often one MBI was not sufficient to cover all use cases in a user’s journey with us. We also realized we needed alignment tracking. This is where OKRs came in; the OKRs provided a mechanism for two key needs that we used to address alignment and tracking: 1. defining a specific objective and 2. pre-determining how we would measure success or progress for that objective. For us, OKRs were the second step we applied in our transformation journey (listed as detail level #2 above).
In parallel with applying the OKRs for value delivery context and alignment tracking, we also realized we needed to decompose each MBIs into a series of incremental milestones and experiments (e.g., A-B testing to capture metrics for UX [User eXperience]). We viewed the increments as a journey for our MBI delivery, so we adapted Example Driven Discovery for specifying the respective milestone increments within each MBI. This third step for us, fits into the “nesting dolls” as detail level #4.
For delivering the series of Example Driven Discovery increments, we adapted Continuous Delivery practices to ensure that our value pipeline and delivery pipeline were both sustainable. These practices are embodied in detail level #5. By embracing these practices, we closed the bottom-up loop at the team level with the top-down loop for objectives and metrics; i.e., the “nesting of dolls” in detail levels #2-5.
One final need emerged with timely importance: organizing our OKRs so effective ranking and tradeoffs could be made. For this, we used a “Vision” model which aligns effectively into a “Hierarchy of Purpose”. The Hierarchy of Purpose explicitly drives prioritization of Strategic planning items and frames the context for each OKR. This final step for us, is depicted at the top of the lists as detail level #1. This completes the “nesting” of the “dolls”, detail levels #1-5.
Our execution across these checkpoints has proven effective and beneficial to our enterprise. Some of our early success outcomes include higher customer satisfaction, increased web traffic, faster response times, lower bounce-rates, less delay, greater throughput, and increased revenue. We’ll plan to discuss these outcomes and drivers further through our subsequent posts and ultimately in one of my pending books: The Primer for the “Nesting Dolls” Adaptive Flow Approach to Lean Agility.
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Abbreviations:
*OKR – Objective and Key Results; simple yet powerful structured approach for organizing qualitative and quantitative metrics
**MBI – Minimum Business Increment; smallest increment of business value that can be defined, created, and consumed; it may be one in a series of business value increments.
***CD – Continuous Delivery; the production line for software delivery that ensures sustainable, efficient, effective delivery on demand.
Web References:
Castro, Felipe. (2016). OKR Guide – Objectives and Key Results. Lean Performance. http://leanperformance.com/en/okr/
Castro, Felipe. (2016). What is OKR? Lean Performance. http://leanperformance.com/en/okr/what-is-okr/
Castro, Felipe. (2016). Migrating from Activities to Value-Based OKRs. Lean Performance. http://leanperformance.com/en/okr/migrating-milestones-value-based-okrs/
Humble, Jez; Read, Chris; and North, Dan. (2011). The Deployment Production Line. https://continuousdelivery.com/wp-content/uploads/2011/04/deployment_production_line.pdf
Humble, Jez; and Farley Dave. (2011). Interview and Book Review: Continuous Delivery. https://www.infoq.com/articles/humble-farley-continuous-delivery
Hussman, David. (2016). Products Over Process. DevJam. http://devjam.com/productsoverprocess/
Nieto-Rodriguez, Antonio. (2016). How to Prioritize Your Company’s Projects. HBR, December 13, 2016. https://hbr.org/2016/12/how-to-prioritize-your-companys-projects
Shalloway, Al, (2014). Team-Level Approaches Should Include. NetObjectives. http://www.netobjectives.com/blogs/what-team-level-approaches-should-include
Shalloway, Al. (2016). Minimum Business Increments. NetObjectives. http://www.netobjectives.com/minimum-business-increment
Shalloway, Al. (2016). Leanban Primer. NetObjectives. http://www.netobjectives.com/files/books/leanbanprimer/LeanbanPrimer_FirstEdition.pdf
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