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Systems thinking

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.

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.

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