Lean Metrics Measuring and Driving Change Scan Agile · Miika Kuha and Karoliina Luoto · 8 March 2016
Lean MetricsMeasuring and Driving Change
Scan Agile · Miika Kuha and Karoliina Luoto · 8 March 2016
Karoliina Luoto and Miika KuhaConsultant for Agile coaching and consultingFocus: customer workBefore: product owner, collaboration strategist, communications specialist
Change agent’s right handLeanifying software development
Consultant for Lean, way of working, enterprise mobilityBefore: Process owner, product owner, enterprise mobility consultant, product designer, industrial designer
Gut feeling for trendsoften differs from measured data
• Photo: Tara Chill, Flickr
It’s good to look at metricsWhile keeping your eyes open
• Photo: NATS Press Office, Flickr
Just remember To also keep your eyes open
Picture from ”Antifragile” by N.N.Taleb
Think of your own project.Do you have metrics for the right direction?What are they like?
Metrics levels
Change in business environment
Customer understanding
Current Operating Model
Change Implementation Progress
Continuous improvement and
learning
CxO
VP
BO
PO
Development
Mature business Startup
CxO
Development
!
Current operating model
Alignment within levelsCurrent operating model
BO
BO
!
Resource optimization
Flow optimization
Change in business environment
Customer understanding
Current operating model
Change Implementation Progress
Continuous improvement and learning
Where, in what context
To whom
How
What is improved next
How to keep improving
Measurement frame
Change in business environment
Customer understanding
Current operating model
Change Implementation Progress
Continuous improvement and learning
So, to metrics
Business environment Our market share is bigger than competitors, are we good?
Market %
A B C D E F
Evolution
Visib
ility
to th
e cu
stom
er
Based on Simon Wardley’s Value Chain Mapping
Genesis Custom build Product Commodity
Customer specific services
Concrete
Manual House building
Value chain mapping current stateConstruction industryCustomer
3D printing
Printed House
KnowledgeSub contracted building
1
23
Business environmentMetric tool 1: Desired Value Chain position
Model the value chain you are part of – identify what competitors are doing, what technologies and other enablers are merging
Metric: How close you are on your target, what to do next to achieve the target, when to set new target?
What are your capabilities to improve your business opportunities? What is the one metric that reveals best if you have taken the desired spot?
Change in business environment
Customer understanding
Current operating model
Change Implementation Progress
Continuous improvement and learning
Customer expectation almost there?
Customer understandingMetric tool 1: Net Promoter Score
Talk to the customer – really, go and talk to the customer
Metric: How likely you would recommend the product to a friend? (0 no way – 10 most certainly)
Change in business environment
Customer understanding
Current operating model
Change Implementation Progress
Continuous improvement and learning
Process measurementwe get 97% positive fb, good enough?
Positive score?
Yes No
Current operating modelMetric tool 1: Process Cycle Efficiency
There are many possible measurement points – instead of measuring output, take metric that forces you to take end to end customer view
CVA CVA CVA CVA CVA CVA CVA
NVA NVA NVA NVA NVANVA NVANVA
Current operating modelMetric tool 1: Process Cycle Efficiency
Metric: Process Cycle Efficiency
PCE =Customer Value-added TimeCycle Time
CVA CVA CVA CVA CVA CVA CVA
NVA NVA NVA NVA NVANVA NVANVA
• Map the Value Stream & understand the customer• How much is the Cycle Time?• How much there is Customer Value Add time?
Change in business environment
Customer understanding
Current operating model
Change Implementation Progress
Continuous improvement and learning
Change implementation progress = How much gets done?
Amou
nt o
f cha
nge
effor
t
Cadences87654321
160
120
80
40
Now at
Prognosis
Wholebacklog
Change implementation progressMetric tool 1: Implemented value
Agile methods often focus on measuring the amount of change effort, when the real question is the value of itSimple metric: make customers play value poker on planned changes and then track progress based on value points
Discussion while playingBrings out the reasoning
Photo: Play Among Friends Paf, Flickr
Value trackingto see value for changes
Can be added as a layer to any task management tool
Change implementation progressMetric tool 2: Adoption figures
Percent of people using the new process / system regularly
A new process or software is not implemented before it is part of its users’ daily routines
Change implementation progressMetric tool 2: Adoption figures
New kickoffAltered liftoffOther
Example: 5 % of new projects use the project kickoff process
Change in business environment
Customer understanding
Current operating model
Change Implementation Progress
Continuous improvement and learning
Continuous improvement Are we doing it?
Yes.We have a retrospective / operations review once a cadence.Ok, is that continuous improvement?
Continuous improvement and learning Metric tool: Easing pains
1. Example metric: Uncompleted orders reduced from 32 % to 15 % of purchases
Continuous learning is happening when you 1) get out experiments which get 2) implemented and 3) analyzed for learnings Amount is not the thing, targeting biggest pain points is Simple metric: Are our biggest problems getting easier?
Continuous improvement and learning Metric tool: Easing pains
2-3 months
We talked about metrics for different levels
Change in business environment
Customer understanding
Current Operating Model
Change Implementation Progress
Continuous improvement and
learning
Desired Value Chain positionNet Promoter Score
Process Cycle EfficiencyImplemented value
Easing pains
Adoption figures
What to do next?
1. Understand what to target first, how to measure it meaning full way and how to sustain it
Change in business environment
Customer understanding
Current Operating Model
Change Implementation Progress
Continuous improvement and
learning
1
2
3
2. Then understand what are the needed connections supporting & enabling, on other levels and how to measure and sustain them
3. Get the enforcement to drive the new metrics into daily management system
To keep movingis more important than the path you take
• Photo: qwrrty, Flickr
Questions? Comments?Codento.fi
Miika Kuha · Karoliina Luoto · @codento · @totoroki