Category

Lean

The Luna MBA 2014 Update

By | Agile, Development, Disruption, Education, Lean, Organisation | No Comments

Two topics remain consistently popular on our little LT site… Agile Workplaces and the Luna MBA.  Just as we encourage all our clients and friends to keep reading and learning so we do ourselves and so we present some new reccomended additions to the MBA… If you’ve finished the current list then consider this extra credit for your degree.

Adapt: Why Success Always Starts with Failure – Tim Hardford

A remarkable, if slightly repetitive set of stories showing us the unpredictable path to true innovation. He starts with the story of Palchinsky at the turn of the 20th century who may have just invented Agile approaches analysing the Russian ecconomy even before the ship building yards of the first world war; Of course he was exiled to Siberia for his efforts. He also explores our aversion to variation and experimentation – the tendency for governments and corporate bosses to love large and grandiose projects instead. As Hardford points out the proliferation of iPhone and Android apps has hidden the uncomfortable truth which is innovation is harder, slower and costlier than ever before. All the easy problems have already been solved. I’ll leave you with a quote from the book to inspire you to buy and read it.

‘Return on investment is simply not a useful way of thinking about new ideas and new technologies. It is impossible to estimate a percentage return on blue-sky research, and it is delusional even to try. Most new technologies fail completely. Most original ideas turnout either to be not original after all, or original for the very good reason that they are useless. And when a original idea does work, the returns can be too high to be sensibly measured.’ Read More

Agile Encore – Workshop and Talk – Nov 14th 2013

By | Agile, Disruption, Education, Lean | No Comments

I talked about one of our favourite clients BAUM Cycles at Agile Australia 2013 in the middle of the year – It must have been popular because I’ve been invited back for the Agile Encore in Melbourne on the 14th.  I’m also running a workshop in the morning before the afternoon session – Here’s an insight into what you’ll get !

Afternoon Talk – Agile, Lean, Broken Ribs and a World Champion

Taiichi Ohno was reputed to take new graduates at Toyota to the factory floor and draw a circle on the ground. The graduate would then be told to stand there and observe; if upon his return they had not seen enough then he would tell them to observe for longer. While it might feel like something out of a Karate Kid movie Taiichi Ohno was really teaching a simple lesson. The only way to really understand a problem is to go to where it happens and see it.

Admiral Rickover (father of the nuclear submarine) understood this only too well and long before the Toyota Production Systems day he would force ships’ captains into boiler suits to crawl the bilge of their ships with him looking for problems on ships in for repair and refitting.

“What it takes to do a job will not be learned from management courses. It is principally a matter of experience, the proper attitude, and common sense – none of which can be taught in a classroom… Human experience shows that people, not organisations or management systems, get things done.” – Rickover

Genchi Genbutsu – Go and See.

How then do we do this when more than 90% of us are creating virtual things – intellectual property, software, design or products – not something you can drop on your foot?

One of Luna Tractor’s most interesting projects over the last year has been working with BAUM Cycles. Their bikes are widely regarded as the Ferraris of the bike world, ridden by world champions who pay their own money and line up like everyone else. In a small, sometimes hot, often cold and dirty factory on the North Shore of Geelong, they have been steadily shifting the operation of the entire business to an Agile and Lean process.

With a blue collar workforce, most factory language unprintable and the background noise a constant mixture of Triple M and machinery; some different approaches are required.  Hear real world lessons about Lean flow, physical stock management; Agile sales and customer service along with who ended up with the broken ribs.  Get a sneak peak into the new factory design that we are currently building also.

You can sign up and see the rest of the program here – www.agileencore.com/index.html

Morning Workshop

In addition I’m running a workshop in the morning covering a wide ranging background of  Agile, Lean and Systems Think as it can be applied across a whole organisation.  This session will be great for beginners and experience agilistas alike with a focus on the background, and philosophy of Agile, Lean and Systems Thinking as well as interactive discussions about how to practically start using these approaches right across your organisations – not just in IT.

Full Details and workshop sign up here – www.agileencore.com/workshops.html

PS: Use the code ENCORE-JAMES to save $100 on the workshop.

Agile Australia 2013 Reflections

By | Agile, Communication, Customers, Education, Lean, People | No Comments

It’s become a bit of a tradition for Nigel and I to write some reflections after the annual Agile Australia conference.  This year Nigel was stuck at home in Melbourne, so it’s just down to me.

I felt like the conversation was much more sophisticated this year.  Lots of people talking about Agile and Lean in the same sentence.  Lots of folks grappling with their whole end to end program, budget cycle and corporate cultures.  A recognition that iterative test and learn approaches are the future no matter what your size or market position.  After many years focusing on techniques, frameworks and patterns this year there was a new focus on values, culture and the human element.

5 years ago the conversation was basically: can this agile stuff even really work ? Now it feels like a whole new breed of people are wanting to understand and embrace Agile, and it feels much less cynical and defensive on their part this time. This is a promising evolution though it does mean I’m going to have to stop making jokes about a few companies like Telstra who have not only seen the light but are working bloody hard to change their course.

A couple of conference highlights for me:

Dave Snowdon – Cognitive Edge – Smart grouchy man; he hurt everyone’s brains… Understanding how we humans think and process information is really important.  Something Dave and his team are exploring is the idea of capturing what users want or are experiencing through micro narratives.  Stories.  If you want to know what your company is really like ask someone the story they would tell their best friend.

Ryan Martens – Rally Softare – An elegant and heartfelt call to action for engineers to think about how they can use their powers for good and not evil.  The world has many big and complex problems and if we can combine basic human empathy with our engineering chops and the scientific method, then maybe, just maybe we can make the world a better place.  Seeing an MRI machine turned into a pirate ship so that kids wouldn’t be so scared to go into it was a beautiful example of empathetic insight.

The reception for my own talk about applying Agile, Lean and Systems Thinking approaches to a small Australian high-end bike manufacturer was very gratifying too.  I’m not sure if the session was videoed, but I promise I’ll write about the story here soon for the people who missed it.  For anyone interested in seeing BAUM’s transformation in person just get in contact and I’m sure we can organise a field trip to Geelong.

Shaping IT Organisations: CIO Strategy Forum presentation by Nigel Dalton

By | Agile, Lean, Organisation, People | One Comment

In which the 3rd Reich*, the Catholic Church, and Monty Python are resoundly thumped by William Edwards Deming in the race to design a healthy, productive IT organisation for the 21st century.

Third Reich example of extreme flat organisation structure

By the time this is published I will have presented the results of many hours research, debate and reflection on the design of modern IT organisations. Sadly, without actions and interpretive dance, the Powerpoint slides on their own don’t add up to much more than pictures. Invite me (or James!) for lunch sometime, and we’ll happily proffer an opinion on the subject.

The pivotal moment in the thinking process came when reading the new book from JoyceThe essential deming by joyce orsini Orsini, a deftly edited collection of Deming’s lectures, missives and thoughts from 1950 to 1992. A brilliant book, it is the closest you’ll get to Deming sitting with you and giving his opinion on a wide range of important matters. Including, organisation structures!

Deming’s simple idea (quoted in a 1992 presentation to General Motors) was to avoid traditional organisation charts in the form of hierarchical pyramids, and replace them with flow diagrams (aka value stream maps), and just put the people on the flow diagram as value was pulled by a customer. So simple!

“A flow diagram is actually an organisation chart. It shows people what their jobs are. How they should interact with one another as part of a system. Anybody can see from a flow chart what their job is. Take the chart, put the names on it. You belong here. Somebody else belongs here. Then anybody can see from the chart what their job is. And their work fits in with the work of others in the system.”

Compare that to the Hitlerian view of a flat organisation (so inexplicably popular since the 1990s, with ever-expanding numbers of direct reports), with this lightly edited paragraph from Wikipedia on the organisation of the 3rd Reich. The grey bits are the changed words. If this sounds like your IT department, run!

‘The CIO often deferred making decisions, avoided clear delegation and allowed subordinates to compete with one another, especially in the recent years. Therefore, a system of governance was formed whereby leading company officials were forced to interpret the CIO’s speeches, remarks and writings on company policies and turn them into programs and strategy.

Any manager could take one of the CIO’s comments, and turn it into a new strategy, of which the CIO would casually either approve or disapprove when he finally heard about it. This became known as “working towards the the CIO“, as the executive was not a coordinated, co-operating body, but a collection of individuals each trying to gain more power and influence over the CIO. This often made IT executive meetings very convoluted and divided, especially with the CIO’s vague policy of creating a multitude of often very similar posts.’

This is also an opportunity to put the many references given in the 30 minute talk, and used in the research, in one handy place. Enjoy.

Reading List

  1. The Management Century by Walter Kiechel III, published in Harvard Business Review, November 2012.
  2. The Essential Deming: Leadership Principles from the Father of Quality (2012) by Dr Joyce Nilsson Orsini. Available as a Kindle book, this is the only place I have read Deming’s theories on organisation structures and the negative impact of org charts.
  3. Value Stream Mapping – understand the theory of this special variant of process map
  4. Management 3.0 (2011) by Jurgen Appelo.
  5. Godwin’s Law by Mike Godwin, 1990. ‘As an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1.’
  6. Scaling Agile at Spotify (2012) by Kniberg and Ivarsson.
  7. Power to the Edge (2003) by Alberts and Hayes.
  8. Here Comes Everybody (2009) by Clay Shirky.
  9. The Principles of Scientific Management (1911) by Frederick Winslow Taylor.
  10. The Theory of Business Enterprise (1904) by the Thorsten Veblen (the witty economist who invented the concept of ‘conspicuous consumption’ among other things). Best read in Wikipedia.
  11. General and Industrial Administration (1916 in French, 1946 in English) by Henri Fayol. Had Henri not been French, and writing at a tricky time in world politics, his ideas might have spread sooner. Similar to Frederick Taylor in many ways.
  12. Conway’s Law by Melvin Conway.
  13. Servant Leadership – best read about in this chaotic Wikipedia entry which features American Robert Greenleaf’s work.
  14. Peter Drucker’s contribution to management and organisational literature in the second half of the 20th century was biblical. The HBR article above does a great job at summarising his influence, or you can buy this book on Amazon.
  15. The reference to the 3rd Reich organisation structure and model can be found here in its original form (not adapted for CIOs).

Agile, Lean and Systems Thinking – What’s the Deal?

By | Agile, Lean, Strategy | No Comments

A Luna Tractor client asked me the other day, “What’s the relationship between Agile and Lean? How do you know which to choose?”  It’s a great question and the answer is actually pretty simple: most of the time you need to apply both. In fact we would add Systems Thinking to the list and suggest that you need to think hard about how to apply the right aspects of all three disciplines to your problem.  So how does it work?

Lean – How to do the least work while maintaining value.

Agile – Habits to create an adaptive, incremental development and learning cycle.

Systems Thinking – Solving problems by viewing the problem as part of a system, rather than a broken part.

What does applying all three look like?

All three value humans as a key part of the system.

All three value customers as the key driver of the system.

Use Systems Thinking to define your approach, use Agile habits to solve problems and use Lean priciples to tune and refine your resulting system.

Genchi Genbutsu – Go and See

By | Agile, Communication, Lean, Space | No Comments

ImageTaiichi Ohno was reputed to take new graduates at Toyota to the factory floor and draw a circle on the ground.  The graduate would then be told to stand there and observe; if upon his return they had not seen enough then he would tell them to observe for longer.  While it might feel like something out of a Karate Kid movie Taiichi Ohno was really teaching a simple lesson.  The only way to really understand a problem is to go to where it happens and see it.

While Lean and the Toyota Production System is largely credited with pioneering this approach, I suspect that like most parts of the TPS it’s just a nice packaging of a common sense observation – Kanban for example was just a reflection of the way a Supermarket has to maintain stock on its shelves: a pull system where the consumer takes an item and leaves space to bake more bread, or butcher another animal etc to replace it.

Rickover (father of the nuclear submarine) understood this only too well and long before the TPS would force ships’ captains into boiler suits to crawl the bilge of their ships with him looking for problems on ships in for repair and refitting.

“What it takes to do a job will not be learned from management courses.  It is principally a matter of experience, the proper attitude, and common sense – none of which can be taught in a classroom… Human experience shows that people, not organizations or management systems, get things done.” – Rickover

Co-locationing cross functional teams is just another kind of Genchi Genbutsu, it allows all the members of the team to see and understand the problems that others are solving.  Lockheed Martin has colocated designers, contractors, pilots and welders etc in their Skunkworks since the ’40s.  The JPL has its Team X and Agile teams colocate everyone from their end customers to the sytem admins if possible.

Many years ago when I was running the IT team at a SAAS business we had a simple task tray application which measured system performance and warned of basic metrics being off trend (user sessions, average response time and # of database sessions).  We displayed this on a huge TV in the middle of the building – right between the customer service area and the main developers’ workspace.  When a problem happened the phones would ring, alarms would sound and within seconds developers were talking to customer service reps, who were in turn on the phone with customers about the problem.  Nobody was told to ‘log a ticket’.

Leaders, get out of your boardroom and out of your confortable office shielded from the world by your highly efficent PA; go and see how the sausages are made.  Walk the floor, talk to your staff and spend time doing some of their work.  If your product people are complaining about IT ‘never delivering’ then get some extra desks and have them go and sit in the middle of your dev group to understand why.  If your inventory system always fails, go to the store room and watch boxes being unpacked and catalogued.  If sales are down, go with your sales team, visit prospective clients and hear from their own mouths why your product doesn’t cut the mustard.

Genchi Genbutsu – Go and See.

WHY ?

By | Agile, Communication, Customers, Development, Disruption, Lean, People, Strategy | No Comments

At various times I’ve heard Fiona, Nigel and myself telling people “If you only adopt one Agile practice make it the retrospectives” … But why ?

The boards are useful, but they are really just give you a prompt when you talk at your stand ups, and those are just an efficient way to make sure everyone is communicating.  While the demos and showcases give some social incentive to produce real things and check your progress over a useful timeframe (weeks not months or years).  But … The retrospectives (or reviews), that for me is where the real magic happens.  If you never stop to check, to ask how things are going and question why things are the way they are, why you are doing things and what you should do next in response then you risk having  the veneer of an Agile process which is either just micromanagement on the wall, Waterfall or perhaps worst of all, no real plan at all.

Being Agile isn’t enough.  Being Lean isn’t enough.

It’s all to easy to build and do the wrong things very well and very quickly using these techniques.  Perhaps the single most important thing is that your CEO, your leaders, your product people and you need to understand, ask and articulate is WHY you’re doing things.

If it’s a statement about profit and growth, start running. The powerful WHYs come from passion and insights from your customer (or potential customers if you’re doing something new).

WHY –> WHAT –> HOW … Simon Sinek

There are two standout statements in Simon’s TED talk.

“People don’t buy what you do, they buy WHY you do it.”

“There are leaders and there are those that lead. Leaders hold a position of power or authority, but those who lead – inspire us. We follow those who lead not because we have to but because we want to, we follow those who lead not for them but for ourselves.”

Too many companies and individuals talk about what they are doing, the great ones talk about why.

Luna USA Field Trip: lessons for the future of retail in Australia

By | Customers, Disruption, Lean, People, Retail, Strategy | No Comments

If I had a dollar for every whinging column-inch where our Australian newspapers copy and paste press releases from Myer, David Jones and Harvey Norman’s PR departments, blaming the dreaded interweb for the end-of-days in our retail stores, I’d be wealthy enough to buy my Levis from DJs all the time. Which is another story, but to be fair, a related one.

As data from Marketing Magazine recently reported, and as I have duly illustrated above, online sales (the pirate) amounted to a mere 4.9% of total retail revenue in Australia. You’d think it was 49% the way the captains of industry are moaning! You would have to take the 15 top-ranked etailers (look away venture capitalists) to beat Myer’s sales in 2011.

Three quarters of those etailers are Australian based (like recent Melbourne niche startup Oola Toys, catering for quality kid’s toys online), belying the hysteria that the foreign pirate devils are plundering our shores.

Like pirates, etailers are moving fast and nimbly, growing 29% per year, but it’s a perilously small base, and although the power of compound growth of that kind is well-noted by economists, the pirate’s flag was visible from a great distance.

In the long run, can ye olde worlde Australian retail survive this onslaught from the internet? Will websites that enable people to self-serve, in their own good time (websites rarely snear “you’s been fixed?” while texting their mates on their iPhone), with near perfect information on price and quality, put bricks and mortar to the sword?

What’s particularly disturbing as Luna Tractorites, is that while we wait for the millionaire boys club to figure it out, the Australian retail experience just seems to get worse, accelerating our move online. As management consultants advise the command and control CEO-classes that the only sure-fire road to profit is cost reductions, they cut wages, staff numbers, staff benefits, premises and service.

I just don’t buy all their complaints about retail rents and wages. As this report on the state of Australian retail by The Australia Institute shows (yes, I know, they have an axe to grind and I should declare, distantly linked to my new employers), there is plenty of misinformation being spread at present to discombobulate us all.

Australian CEOs should know by now that by their very nature, big consulting firms will only recommend a cost-cutting program, since a well-known result of an ideas or innovation-based strategy is that some of the ideas won’t work. Cost cutting always gets a result for a CEO, and since they’re only going to be in the job 2 years, the next guy can handle the fallout.

The less than 5% of Australian retail sales that ecommerce plunders appears to have undone the psyche of the highly paid leaders of our big retailers. Their inability to grasp pure online is only surpassed by their choking over their morning tea and tim-tams trying to figure out how to make online and bricks & mortar stores work together. Which the rest of the world has had a better go at I might add – according to the Marketing article, 13 of the top 15 etailers have a bricks and mortar presence of some kind.

The web is growing fast too, off that tiny 4.9% base, and it appears nobody near the top of big retail has a single good idea to play. Remind me again why we pay them so much?

To add final insult to big retail’s EBIT injuries, the Australian ecommerce industry is still sexy, bright and cool 12 years later – and still attracting talent and investment. And more often than not, attacking using small teams moving fast and agile.

Luna Tractor sent me to the USA in May 2012, the land of BIG retail, and I am pleased to report that whilst on assignment, I have seen the future.

Knowing a fair few camera nerds (James, Gus, Jamie, Steve I am looking at you all), they often recommend a website called B&H Cameras, based in the USA, as trustworthy, value for money and easy to deal with. The 3 horsemen of the retail apocalypse.

And thus, being in Manhattan for a few days, I felt duty bound to check them out.

The approach, from Penn Station through roadworks and fairly drab streets did not auger well. The only retailers in this area were basic, small and a bit sad looking.

Eventually I spotted a nondescript B&H sign, and a couple of traditonally dressed and coiffed Jewish guys sitting outside the door to a loading dock, looking exhausted from their morning’s work, and seemingly pleased to be in the open air. Hmmm. Entrance round the corner. Okayyyy.

Round the corner, in the front doors and BAM! Like a cross between Penn Station and Willy Wonka’s factory, there are people everywhere, and the zziiippp, zzziiiippp sound of machines, rollers and gears. I look up to see green boxes flying around gantries above our heads at high speed, like a Terry Gilliam film.

Photo from wikipedia

With electronics gear everywhere. It’s about the size of a decent JB HiFi store in Australia. On each level!

It is immediately explained to me I should check my hand-luggage in at the concierge, and then I’m free to head into the store.

Nondescript on the outside, treasure trove on the inside. Hundreds of customers, and dozens more of those mysterious traditionally-dressed Hasidic Jewish men. They are everywhere, chatting to each other, chatting to customers, laughing, looking serious,

Level 1 of B&H

debating, calling out to one another. I quickly get the picture they own and run the business.

My genuine requirement (and yes, there is one my dear family) is a couple of packs of Polaroid’s new zero ink ‘Zink’ printer paper, for the gorgeous little GL-10 portable printer we use. It is portable, battery powered, and most importantly, emulates the look of a genuine old Polaroid camera print. Essential cool.

Having bought the printer at Michaels in Melbourne, I figured I would acquire more paper on the road in the USA easily enough. I figured 100% wrong, as I found in San Francisco, Minneapolis and Boston. “Polaroid?” they all said. “What’s that?” or “they went out of business”.  Even the specialist camera stores blanked. At worst I got the surly ‘haveaniceday’ which translates to ‘whydidIwastetimeonyouloser’.

I wandered upstairs at B&H, seeing the family safely despatched to check out the world’s largest 3D televisions, and am once again taken aback by the sight. Not dozens of Jewish men, but hundreds.

Product is divided by brand, and by categeory. A whole shop-sized stand of Canon cameras, of Nikons, Leica, and Olympus. Printers arranged accordingly. Historical displays. Apple computers, Sony, you name a brand, it’s there. I am drawn to the Polaroid and instant camera stand, and to my utter disappointment see their old Pogo printer and a paper rack saying ‘out of stock, new product coming soon’. Images of the Lady Gaga designed GL-10 printer as a paper weight flash into my brain.

“Sir, you look like you saw ghosts” says a man at my elbow. I explain my problem, what I want, and he steers me by the elbow – “it’s not my area, but come over to where the printers are, we’ll see what we can do”. I am introduced to the 3 printer guys, who have the tiny range of Polaroids (there are only 2 printers, and a couple of cameras) on their shelves.

Then my server shocks me – he opens the freaking company website on a computer on the stand! I quickly jump to the conclusion that the game is over, and I’m about to be sent home to order it on the web.

To have a retailer even admit they have a website is rare enough, but using the site within the store to actually assist a customer even rarer. There’s no commission on that sale surely! Having got a visual check on what I want through the use of a quick search, the guy CTRL-C’s the product SKU, alt-tabs to another boring old mainframe looking screen, pastes it in, and whammo, we have an order.

“Were you thinking of anything else on today’s visit?” he asks. As it happens, I have ummed and ahhed over a simple 50mm f1.4 lens for shooting indoors for a while. “Do I have to go somewhere else for lenses?” I ask. “No, no, if you know what you want we’ll find it” comes the confident reply. One website search, visual confirmation, cut and paste of the SKU, and I am done.

The B&H service counters where you inspect the goods brought up from the warehouse. Spot any queues here?

I now expect my guy to take me to a till and ring it up. Silly me. Nor does he point and tell me to wait in the queue over there. He TAKES me to a free service person at the biggest customer service counter I have ever seen (I counted about 70 stations), and introduces me to the next guy in the chain. Then he waves goodbye and goes back to the printer display.

I have a small ticker-tape printout in my hand of the items, with a bar code. I am greeted, the serving guy simply scans the code and suggests I try one of their delicious candies, as the goods will be a couple of minutes. Ummm, so where are they then?

In under 2 minutes, 2 green boxes with my lens and paper arrive on the invisible railway underneath this gigantic service desk. I get my credit card out, ready to pay. “Oh no Sir” he waves my card away, “we’re just going to let you check the items are what you wanted – you will pay downstairs at the next step…”

Now really intrigued, I decide to race the items downstairs. My effort to beat them will doubtless be foiled by a queue at the payment counter though. Except there isn’t one. In fact, I have not seen a queue anywhere in the entire store. Payments is only the second place I have seen any women in the store at all (the first was bag check). Six checkouts for credit cards, 4 for cash and cheques.

Having paid, I am ushered over to the collection counter, where my items, with warranty cards filled out, my receipt stapled to them, have been delivered by the magic railway and are in a bag ready to collect.

Boggling.

So what has happened here? Well, given that these guys have been in business for decades, I have just learned where Steve Jobs got his Apple Store commerce and Genius Bar service processes from.

B&H are basically masters of FLOW, and ensuring that value is accruing the whole time for the customer.

B&H have counter-intuitively divided up the value stream into discrete parts that are delivered rapidly by discrete people. In a time where everyone else is cutting staff numbers, training and service levels, they are dialing those factors to 11.

They have worked out the bottlenecks in their store flow, and simply calculated the required ratio of servers, inspection staff, cashiers, help desk and collection staff based on the pull of customer demand.

They also have a booming website business, shipping huge quantities of product across America and the world, with integrated logistics partners like Fedex. To comply with traditional Jewish law, they are shut on Saturday, and do not even process internet orders placed on a Saturday. The system just queues them up for Sunday.

Now, I’m not saying they are perfect. According to Wikipedia they are defending a 2009 lawsuit focused on the lack of progress opportunities for women in the store. I can see how that arose!

But between innovators like Zara (right next door to our David Jones in Melbourne’s Bourke Street Mall, and as busy as DJ’s is quiet), Michaels and B&H, there’s hope that a retail shopping experience in Australia can still be a pleasant, and profitable one.

Just don’t expect any consultants to recommend that strategy any time soon.

YOW! 2011 Australia Conference – something for everyone, even the economists!

By | Agile, Development, Lean, Space, Technology | No Comments

As the lunatics in charge of the Luna Tractor, James and I are fortunate to spend time with the 25% of Australian agile professionals who actually give a shit, who we often meet at industry conferences. The smarter among you will have realised I’m rudely suggesting  that 75% of so called ‘agile professionals’ don’t actually give a shit, which sounds harsh until you hear my benchmark number for traditional business people (waterfallers, 5 Year Planners, CMD+CTRL freaks) who give a shit – more like 1/100 or 1%. Maybe in some cases 0.1%, depending on the institution.

The British cabinet war rooms - agile wall, all the comms you need, the right people in the room, iterating by the hour in 1936.

Economics lesson aside, being invited to YOW! 2011 to present was a real highlight for us. James and I gave a 45 minute talk on the history of coincidentally agile-like practices over the past century, and how they have contributed to some great innovations (particularly in the engineering and space fields, our favourites), as well as some Class A ass-saving.

YOW is reputed to be a developer-centric affair, with a speaker roster even including several actual inventors of famous programming languages (check out the superstar roster here), so as the resident economist I was fairly nerve wracked! Should non-developers even go to YOW? Is it just too geeky and engineering focused? My experience is absolutely yes, you MUST go to YOW – per Martin Fowler‘s signoff at Agile Australia 2011, we are all complicit in software development now, and gathering an understanding of that craft is vital.

A speaker like Mike Lee might go over your head if you are not an engineer for 5% of the time, but he chooses to focus as much on issues like learning and intellectual property protection as development language choice (and he is damned funny while he’s at it). Someone like Kevin O’Neill from Melbourne prides himself on keeping it comprehensible for everyone, without losing the pointy stuff, and the joy of invention and discovery. The big kahunas like Simon Peyton Jones are talking as much about the history, sociology and philosophy of software engineering as they are lines of code. Meanwhile the Linda Risings and Mary Poppendiecks are there for everyone to learn from.

You can easily pick a path through the YOW! program that takes in the more social and cultural side of software engineering and working in teams (these are passions for organiser and founder Dave Thomas) as well as some more general interest code and development talks, and if ever there was an environment where it is safe for non-coders to ask dumb questions – it’s YOW!

It’s actually the developers who need to worry about their reputation in front of their peers – just say “hey, I’m not an developer, but I’d love to learn how that works in simple terms so I can understand…” and you will have an erudite, clear answer in no time.

Good software engineers love their work, and want other people to love it too.

We’d also love to see a few more software developers and testers at Agile Australia 2012 in Melbourne at the end of May, joining the lively community of product managers, agile coaches, lean gurus, analysts, iteration managers, project managers, thinkers, vendors and practitioners who gather there each year.

A great example of our agile community’s need to think more holistically was raised by Mary Poppendieck and Linda Rising at YOW, who both called  “bullshit” on agile’s current obsession with teams of 7 +/-2 people (read devs, testers and a scrum master) as ‘optimal’, when organisations that deliver products to end customers clearly involve everyone from the person on the phone to customers at the front desk, all the way to the intern. Teams of 30-70 are way more normal and work just fine, so stop obsessing about your tiny team at standup being the whole agile gang. That mirrors our experience at Lonely Planet for sure.

If you didn’t manage to get to YOW! in 2011, or as always seems to happen, were forced to choose between sessions, the majority of the papers are up on the site, and most of the presentations were video recorded – check out the YOW Eventer website put together by the Cogent crew in Melbourne for the video over the next days – there’s a couple up already including ours.

Craig Smith with Mary Poppendieck at YOW 2011 Brisbane - the gold standard 'hard act to follow' at a conference

A copy of our slides (with still images replacing the video we showed in Melbourne and Brisbane) can be viewed online here: Luna Tractor YOW 2011 Decades of Agile

YOW! is a multi-media affair, so naturally there’s a podcast – produced by two of the Australian agile community’s bright young things, Craig Smith (who blogs here when not

Breakfast at Brew Cafe in Brisbane - sensational

coaching and inspiring agilists) and Renee Troughton (who has a great site called The Agile Forest). This was done in a fab (very Lonely Planet) little cafe called Brew in Brisbane, so the background noise is fairly busy, and we discussed (I suspect that should read ‘Nigel talked about’ – Ed. JP) a vast range of topics around agile, Lonely Planet, consulting and change.

You can listen to that podcast here, and of course it’s available on iTunes: http://www.theagilerevolution.com/episode-19-luna-tractor-with-nigel-dalton

My very best impression of the French gallic shrug - perhaps in reponse to Charles' line of questioning on whether Microsoft could be agile 😉

And finally on the media front, Microsoft’s Channel 9 conducted interviews of many of the speakers at the conference.

You’ll find them all on their prolific and rich tech-focused website, while my own epic 30 minutes of righteous crapping on about everything agile, Lonely Planet, and offering unqualified advice to Microsoft about becoming agile can be accessed right here.

See you all next year.

Great Engineering Lasts – The U-2 Spy Plane and the SR 71 Blackbird.

By | Agile, Development, Lean, Space, Technology | 4 Comments

We spoke at YOW this year on the topic of innovation and agile over 6 decades, highlighting the Agile and Lean principles we see in space and engineering projects. From the 1930s we talked about the Cabinet War rooms and that deserves a whole post of its own as we continue to expand our understanding of how physical spaces enable and impact the people and results.  From the 1940s we talked about Lockheed Martin and their Skunkworks which we’ve written about before.  From the 1950s we looked at some of the magnificent engineering created by that same Skunkworks team… The Agile movement may only be 10 years old, but the principles and the evidence that it works goes back way further than that.  We’ll write more reflections on YOW itself at some point, but today you get one of the lessons that most appeals to us.

The U-2 Spy Plane

When the U-2 first flew in 1955, it was an accident.  A high speed taxi test saw it rolling down the runway at 70 knots at which point its sailplane wing generated enough lift and it took off into the air unexpectedly.  At the other extreme, its cruising altitude of 70,000 feet is referred to by pilots as coffin corner; at this height its stall speed is a mere 10 knots slower than its maximum speed.

The balance is so critical on the U-2 that the cameras had to use a split film setup with reels on one side feeding forward while those on the other side feed backward, thus maintaining a balanced weight distribution through the whole flight.

The plane is incredibly difficult to land because of the lift cushion under the wing as it comes close to the ground.  It lands on two inline ‘bicycle wheels’ and the wing tips also land and skid on the ground on titanium plates.

Perhaps the most amazing U-2 fact, and the reason we consider it such a testament to great engineering, is that it’s still in active service today.

The SR-71 Blackbird

This is the fastest and highest flying air-breathing aircraft ever made (only rockets can go higher or faster).  It has a maximum speed unspecified above Mach 3.5 (3.5 times the speed of sound) and a maximum altitude also unspecified but in excess of 85,000 feet.  At Mach 3.5 you’re covering 1km per second and the engines are sucking in 3 million litres of air every second – an average human breaths in that much air in a year.

The construction of the plane is pretty special too, with 90% of it being made from titanium.  At Mach 3+ the surface of the plane heats up to 500+ degrees.  The wet patches you can see on the wings and central spine in this photograph are caused by the fuel leaking out of the expansion joint ‘gills’ in the plane.  Until about Mach 2.5 when the plane heats up and expands, the SR-71 leaks fuel constantly.

While the Concord can do the transatlantic London to New York flight in about three and half hours, the SR-71 is the way to go if you’re in a hurry.  It holds the record at just 1 hour 54 min.

My favourite SR-71 story comes from a pilot in the book Sled Driver: “One day, high above Arizona , we were monitoring the radio traffic of all the mortal airplanes below us. First, a Cessna pilot asked the air traffic controllers to check his ground speed. ‘Ninety knots,’ ATC replied. A twin Bonanza soon made the same request. ‘One-twenty on the ground,’ was the reply. To our surprise, a navy F-18 came over the radio with a ground speed check. I knew exactly what he was doing. Of course, he had a ground speed indicator in his cockpit, but he wanted to let all the bug-smashers in the valley know what real speed was ‘Dusty 52, we show you at 620 on the ground,’ ATC responded. The situation was too ripe. I heard the click of Walter’s mike button in the rear seat. In his most innocent voice, Walter startled the controller by asking for a ground speed check from 81,000 feet, clearly above controlled airspace. In a cool, professional voice, the controller replied, ‘ Aspen 20, I show you at 1,982 knots on the ground.’ We did not hear another transmission on that frequency all the way to the coast.”

This article from Gizmodo about flying the SR-71 is required reading.

In a world of throw-away appliances and software it’s a salient reminder that great work, great engineering lasts a long time.  The Skunkworks team was isolated and protected from the rest of the organisation; this one team designed over 30 planes including the U2, A-12, SR-71, F-117, F-22 – just to name a few iconic aircraft.

LUNA CASE STUDY: A health insurance start-up.

By | Agile, Development, Disruption, Lean, People | 3 Comments

Luna Tractor has had the great pleasure of working with a small health insurance start-up here in Melbourne this year. This is their story.

The competitive landscape for health insurance in Australia is dominated by a small number of large incumbents that have been in business for many years. Below that are about 30 smaller players who have as little as <1% market share. Many of the business practices of these players are rusted on through highly proscriptive regulation, legacy systems that are common across players, and old mindsets. New brands pop up now and then, but they are bolt-ons to older players and typically somewhat contained by old practices. Even when new products come out, the bulk of an insurer’s book remains “old school” on the former products. There has not been a material new entrant since Medibank spun out of the HIC in 1975.

A small team of innovators came together in 2011 to break into this oligopoly. Setting themselves a tough deadline to be in the market in 2012, the main business challenge that emerged was to develop an effective operating model – a way for a group of seasoned insurance executives and subject matter experts to collaborate at high speed to reach their goal.

We set the company to work using the principles of Agile and Systems Thinking from the start. Instead of each subject matter expert retreating to their office to write board-level strategy papers to present to VCs and partners, they settled into their future headquarters around large Ikea tables with laptops and built a war-room. They defined themselves by this highly collaborative, communications-heavy set of business practices.

The rhythms of Agile serve them well. Daily conversations about everyone’s work-list (from CEO to office support) help avert risk and surprises. Weekly demonstrations of achievements, most of them not software at all but related to building online distribution, new products and governance, get everyone on the same page, and are platforms for the one-hour retrospectives and planning that follow every Friday.

Everyone has cards on the wall, separated into swim-lanes that reflect the key business objectives such as license approval and product development. The board is constructed using a customised ‘Hurricane’ model, ranging from 6 months out to today, in ever increasing levels of certainty and detail.

There were initial doubts about the suitability of Agile from some of the seasoned professionals on the team – having only ever worked in command and control businesses at senior levels, some perceived they were being asked to trivialise their work with index cards, scissors and coloured dots. There was a strong desire to see Gantt charts and more traditional sources of comfort. These concerns soon vanished when the blunt accountability of speaking to their peers every morning about their achievements and work for the day became apparent as the main purpose of the system.

Any concerns that the new way of working was ‘soft’ were dispelled in the many tough discussions about progress at stand-ups. As the team often reflected, it was far better to have many smaller moments of debate, receive timely feedback and correct their course than have a big ‘oh shit’ moment a month later.

In no time new boards sprang up around the walls, developing products in a shared way, and to the team’s delight their distribution partners, new IT team, Board of Directors and the industry regulators expressed their support for this ultra-transparent and interactive way of working.

With time pressure obvious, everyone focuses on delivering the minimal viable product that can be brought to the table for discussion, or validated with customers and experts. That ‘product’ might range from an actuarial analysis, to a regulatory document, competitive information, or a set of accounts – a desire to boil the ocean and deliver a gold-plated answer when 80% would enable an informed decision has long gone from the culture.

The whole business is now being built on this foundation, to be customer-focused and fast-moving. The team’s ability to collaborate, solve problems and correct their course in short cycles is a major competitive advantage they will never lose – and it is clear they will take these into the operational phase of the business in 2012.

Time to competency at working this way? Eight weeks, with one Luna Tractor Partner coaching four mornings a week initially, eventually only dropping by on Fridays for demo, retro and planning sessions.

The new company estimates their return on the investment in Luna Tractor’s executive coaching to be at least 10x.

Rugby and the origins of agile

By | Agile, Lean, People | 4 Comments

A recurring challenge we face when discussing the transformation of 21st century organisations to more agile and lean ways of working might be paraphrased as:

“My boss has never heard of it and thinks it must be a fad – does this agile thing have any history to fall back on?”

Having just spent a week at the 2011 Rugby World Cup in New Zealand with plenty of time to reflect (kiwis don’t go for half-time extravaganzas), it occurred to me this FAQ – which might better stand for ‘fairly annoying question’ – should be a blog post, suitably peppered with rugby metaphors.

RWC 2011, Georgia v Romania

The long history of agile goes back to the emergence of mass production from a world of ‘craft’ industrial production in the 1800s. Around 1908, Henry Ford, with management theorist FW Taylor (and later AP Sloan albeit Sloan worked at GM, not Ford) developed moving production lines in huge factories focusing on economies of scale (make more of the same thing, use semi-skilled labour single-tasking and doing what the boss commanded of them, and unit cost comes down), building any colour of Model T as long as it was black.

When a new product was finally demanded (the Model A), Henry and son Edsel Ford simply abandoned the old factory at Highland Park in Detroit and built a new one at River Rouge, as land and labour were plentiful – the factory and re-tooling reputedly cost up to $100m in 1927 dollars!

The next great leap forward in industrial production methods was not developed in America, but in Japan with America’s help, emerging after World War 2 under a rather unique set of circumstances as the Japanese economy was rebuilt – limited capital, limited land, and limits set on labour by the USA including the bizarre ‘job for life’ laws which forced employers to develop systems of working that enabled 60 year-olds to be productive alongside 16 year-olds.

The system that emerged is now known widely under the tag of lean, but also as the Toyota Production System (TPS), and in Deming’s writings ‘systems thinking‘. By the second half of the 20th century, there was no capacity for constraining consumer demand to only 1 model of car – variation in consumer demand and the increasing speed of change were the key challenges for Toyota to respond to as it set up for business. It was within the cradle of this 40-year period that Agile was born as the next great model of organising work.

The happy coincidental crossing of national obsessions: rugby and lean.

Rugby came to Japan in the 1890s from England. In 1987, built on over 100,000 grassroots players in their corporate leagues and competitions (including imported players from NZ and Australia), Japan qualified to play at the first Rugby World Cup in New Zealand. (Note: Japan actually only lost the hosting of the 2011 RWC by 1 vote – so they will certainly be hosts in the next decade). The national coach for Japan is of course John Kirwan, a kiwi hero of the victorious 1987 All Blacks team.

Just a year before that first Rugby World Cup, Hirotaka Takeuchi and Ikujiro Nonaka of Hitotsubashi University in Japan wrote an article for Harvard Business Review titled ‘The New New Product Development Game‘ that is recognised as the source of a stream of innovative thinking that first rolled into smarter ways of developing software in the 1990s.

Clearly Takeuchi and Nonaka were rugby fanatics, meticulously documenting the way a good rugby team can flow up the field as a team in a series of overlapping phases of play (like option C in the diagram above)- and using that analogy to describe the way successful product development was happening in Japanese companies. Remember the Honda City and the stir it created in the 1980s? That’s one of several great examples they document in the article.

Ultimately Jeff Sutherland‘s coining of the phrase ‘scrum’ in the 1990s to define a wide-reaching agile method was inspired by that article. Personally, I feel ‘scrum’ somewhat misses the overall point of their work, as a scrum is a tiny fraction of the game’s flow, but we’ll go with it. We’re not all rugby-nerds or kiwis.

The most important thing you (the reader) can do right now is to buy a copy of the 1986 article and read it. It is only $6.95, and yes, there is a frustrating paywall thing on HBR.org, but it will be worth it.

For the 99% of you who are non-readers, here is the HBR summary of the article:

In today’s fast-paced, fiercely competitive world of commercial new product development, speed and flexibility are essential. Companies are increasingly realizing that the old, sequential approach to developing new products simply won’t get the job done. Instead, companies in Japan (and the United States) are using a holistic method—as in rugby, the ball gets passed within the team as it moves as a unit up the field.

This holistic approach has six characteristics: built-in instability, self-organizing project teams, overlapping development phases, “multilearning,” subtle control, and organizational transfer of learning. The six pieces fit together like a jigsaw puzzle, forming a fast flexible process for new product development. Just as important, the new approach can act as a change agent: it is a vehicle for introducing creative, market-driven ideas and processes into an old, rigid organization.

And when you’re done with the article, pass it quickly down-field to the captain of your team. Remember, companies have been using and refining this way of working to beat you since the 1980s, so what are you waiting for? It will cost you 200 times that amount of money to go to the RWC final in Auckland and see the world championship of agile in action for yourself.

My thanks to Marcus Fazio, multi-national consultant extraordinaire, and Japanese expert who reminded me of this all important link between two of my favourite things. I’m sure Marcus, Takeuchi and Nonaka would all have enjoyed this fabulous moment from the RWC last month.

Japan's winger Hirotoki Onozawa runs to score a try during the 2011 Rugby World Cup pool A match New Zealand vs Japan at Waikato stadium in Hamilton on September 16, 2011. (Photo credit: GABRIEL BOUYS/AFP/Getty Images)

 

Not just an IT thing

By | Agile, Development, Lean, People, Technology | One Comment

Derek Sivers says we shouldn’t share our goals, or make them public, that the act of sharing our goals makes us less likely to achieve them. However, our experience with the teams we’ve worked with is that making public commitments to each other is a powerful motivating force.

With all things Luna Tractor we try to practice what we preach, plus eat our own dog food, so today we went public and launched a project to share the stories of agile and lean transformation at Lonely Planet.  At a lunchtime briefing with our friends at ThoughtWorks, we started to share some of the stories and photographs we have been collecting as the basis of an ebook about the remarkable business transformation at Lonely Planet in the last 5 years.

The book’s title, ‘Not just an IT Thing’, was inspired by Thoughtworks’ Lean business strategist David Joyce, who in early discussions with us was lamenting that so little progress has been made outside of software development with systems thinking, lean, agile and kanban methodologies, and that all too often agile was dismissed as “just an IT thing.”

To continue this, and share our progress in an agile way, our goal is to publish some of the photographs of Lonely Planet’s remarkable workplace on a regular basis as the content comes together.  Stay tuned to the blog for snippets and the team’s stories, and most importantly tell us what you think.

A note of thanks must go to everyone over the last 5 years who told us to ‘write it down!’ Well, your exhortations have been heard, and this time we’ve actually started.

Top 10 agile and lean resources

By | Agile, Lean, links | One Comment

I’ve just written a friend an email with our curated list of resources to inspire teams to start working in a more modern way.

Looking at it, I think it makes a half decent blog post – so here it is!

Passion for customers: you can’t beat Seth Godin. I recommend 2 books – Meatball Sundae which will tell you why you need to think differently to amaze your customers in a digital world; and The Purple Cow for becoming remarkable (as opposed to perfect).

Passion for people: Dan Pink (motivating knowledge workers through autonomy, mastery and purpose) is the king here, though Simon Sinek (emphasising the ‘why’) is a close second. Luckily, YouTube is your friend here.

Agile product development: Steve Blank is the guru here, but being a Stanford lecturer his writing can seem a little impenetrable at times. Two of his students wrote this book which makes far more sense and gets to the point quickly: http://www.custdev.com/ also available on Amazon.

Lean startups: Eric Ries has some great ideas for people starting out, whether they are a real startup or just starting something new in an old world organisation: see some basic slides here, and his upcoming book (due September 2011).

Testing your ideas and products with real people: at Lonely Planet, applying the lessons in this book is how we started to seriously find out things about our digital products that we never knew before: http://www.amazon.com/Rocket-Surgery-Made-Easy-Yourself/dp/0321657292

There is a great online service mentioned in the back of the book that removes all barriers to you trying this approach of asking real customers what they think about your product or service, for about $35. No excuses! http://www.usertesting.com/

Lean as a new way of thinking: one great book, covering Toyota’s development of lean manufacturing (the parent of agile) is Jeff Liker’s book The Toyota Way. It gives you the basic premises of running a lean business with lots of examples.

If the nerdy tech stuff starts to fascinate you, then it’s hard to beat James Shore’s primer on agile software development. Any deeper than that then Martin Fowler’s blog is compulsory reading: http://martinfowler.com/

You’ll impress the pants off people if you can comprehend and quote from these principles: http://agilemanifesto.org/ and http://agilemanifesto.org/principles.html

Getting things done fast: no better book (or easier read) than Rework by 37 Signals. This puts a lot of the principles above into practice, and if you only read one book, this might be it.

And lastly, from a cultural and organizational change perspective, this is a toolset you should plan on using with your teams: http://www.human-synergistics.com.au/ plus they have a free conference in Melbourne later in the year that people should really try to find a way of getting to.

Working in an Agile way will change habits, and with careful planning those changes in habits can start a landslide of cultural change.

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