Lean Transformation

The Ticketmaster North America Ticketing Product and Technology teams (TM) are emerging from the minimum viable product stage of a transition to a Lean portfolio management and execution approach.  The process is bringing interesting and important changes to how TM determines what to work on and how we work. One thing is certain. This will undoubtedly be a validated learning experience.

The decision to implement Lean portfolio management comes with inherent risk because it requires people to change and move out of their comfort zone; however, the potential gains seem well worth the risk.

In any business, the only element that is capable of true transformation is people. … Only people can change in character and appreciate in value. … For Lean to work at the strategic level, everyone needs to think and act in a new way. This new way involves teamwork and thinking in terms of what is good for the company and the customers instead of protecting one’s turf.

– Art Byrne, The Lean Turnaround (McGraw-Hill)

The TM PMO currently has a dual purpose. The team is simultaneously facilitating and participating with the transition to Lean portfolio management – helping change the way we at TM think and act – while continuing to manage product and project delivery across the current portfolio and team structure. The remainder of this post is focused on the value the PMO will bring while managing the portfolio – planning in parallel with delivery – from a Lean perspective.

There is a distinct and broader aspect to Lean portfolio management that is important, though outside the focus of this post. The need to balance investing in Now and the Future. At present the focus is effectively managing Now.

How does the PMO provide value?

Value has many meanings based on the context. Some view value in money terms – worth, revenue, profit. That is not the direct case when thinking in Lean terms, though what for-profit business isn’t ultimately concerned with revenue and profit? The value the PMO provides is rooted in a Lean startup principle – the value hypothesis. No pun intended.

The value hypothesis asks whether our business actually provides value for users by solving a real problem.

– Jez Humble, Barry O’Reilly and Joanne Molesky, Lean Enterprise (O’Reilly Media, Inc.)

Problems, in Lean context, are opportunities to provide value and actively improve. And, people are willing to pay to have their problems solved. The important thing is to learn quickly and validate lessons learned, especially when outcomes are not what we expect – both good and bad.

Validated learning means that we measured—to the necessary degree of precision and no further—the key assumptions behind our business model to understand whether or not it would succeed, and then made the decision to persevere or pivot.

– Jez Humble, Barry O’Reilly and Joanne Molesky, Lean Enterprise (O’Reilly Media, Inc.)

I admit it took some time for the light bulb to go off for me to begin to translate how the PMO provides value in a Lean enterprise. It took a lot of reading about ‘working lean’ and I encourage you to do so. Part of the earlier quote from Art Byrne was the light switch for me:

For Lean to work at the strategic level, everyone needs to think and act in a new way.

Everyone, including the PMO. To provide true value the PMO must solve real problems for our customers (sponsors, stakeholders, affected business partners, product management, project teams, etc.) through a scalable validated learning framework and environment. In this regard the PMO plays the role of business enabler rather than solely focusing on project execution (which is usually dominated by monitoring and controlling).

Do the most valuable work in a clean, consistent experiment production line

In the Lean context, the PMO first provides value through enabling the business to learn, change and grow by facilitating idea development, including evaluation and selection. There are a few key points of context that are important to start with. As a Lean organization, decisions to deliver specific work (products, features, services, etc.) are based on our Value Tree. The strategic bets in the Value Tree drive the ideas that turn into the work that is executed by the Product and Technology delivery teams. Six Sigma veterans are surely no stranger to value trees, value stream mapping, etc.

When working well, the Lean portfolio approach to idea development provides an objective process for evaluating potential experiments that results in a consistent supply of the most valuable ‘shovel ready’ work for the delivery teams at a sustainable pace. One key challenge is being able to run just-in-time idea development in parallel with execution of work in progress. The idea development process focuses on preparing ideas that are next in line while taking into account lesson’s learned from the most recently completed iterations and experiments.

The focus during idea development activities and work iterations is delivering the desired outcome, rather than the volume of output. This is a key change in perspective from traditional PMO terminology.

… [B]ecause the project approach judges people according to whether work is completed on time and on budget, not based on the value delivered to customers, productivity gets measured based on output rather than outcomes. This drives several damaging behaviors. … We create an unsustainable “hero culture” that rewards overwork and high utilization (making sure everybody is busy), not doing the least possible work to achieve the desired outcomes.

– Jez Humble, Barry O’Reilly and Joanne Molesky, Lean Enterprise (O’Reilly Media, Inc.)

Waste nothing… as best possible

Eliminating ‘waste’ is a key tenet of the Lean approach and critical for the PMO to provide a clean, consistent experiment production line. The PMO plays an integral role in reducing and eliminating waste across the overall planning-execution-operations cycles.

The biggest waste in software is created from waiting for software as it moves from one state to another: waiting to code, waiting to test, waiting to deploy. Reducing or eliminating these wait times leads to faster iterations, which is the key to success.

– Ash Maurya, Running Lean (O’Reilly Media, Inc.)

Delays in decisions during planning can completely disrupt the experiment production line (be it from incomplete discovery for an idea or scheduling conflicts for the decision makers). During execution, the delivery teams work best at a certain rhythm based on sprint and / or release cycles. It is important for everyone involved to keep the teams in rhythm to reduce, or better yet, eliminate waste. The ultimate goal is to introduce new value without perpetuating or introducing waste in the organization.

One approach to eliminating wait time waste in the production line is to limit work in progress (WIP). Said another way, it is more important to finish work than to start a lot of work. This perspective is a staple of the Kanban approach.

The purpose of WIP limits is to avoid too much multitasking and overloading a downstream process. If the testers have too much work to do, we don’t want developers to keep building new features and adding to their workload—instead, they should focus on helping test. WIP limits act as an alert signal to highlight the problem before it gets out of hand.

– Henrik Kniberg, Lean from the Trenches (Pragmatic Bookshelf)

The PMO is the watch dog for too much WIP to protect the rhythms of the delivery teams. Limiting WIP is inherently built into the quarterly planning process and business reviews facilitated by the TM PMO. Through this process, delivery teams get direction from executive leadership – at the strategic bet level – that confirms upcoming work is mapped to value and encourages teams to limit the work they commit to.

During work execution the TM PMO provides value through the team level roles of Project Architect and as the Iteration Manager/Scrum Master on the teams. Through both roles the PMO works to limit waste for stakeholders and the teams during projects/iterations. The Iteration Manager may impose WIP limits per iteration once there is actual delivery data. The purpose of this approach is for the teams to become truly effective and deliver the right value for the company with as little waste as possible. Once the teams are effective, efficiency in speed and quality will build as waste is eliminated and prevented on a consistent basis.

Drive Communication – Who, What, When

Traditional PMO perspectives estimate that a project manager spends the vast majority of their time engaged in some form of communication. This does not necessarily change in a Lean PMO. Open, honest communication is vital to validated learning and limiting waste. It is also vital for continuous improvement, another important tenet of a Lean approach.

The PMO must continue to be the communication network for the enterprise and bridge any gaps between the planning (idea evaluation and selection), delivery (experiments) and operations (outcomes created by recent experiments) work streams.

As mentioned earlier, the planning stream must run a little ahead of the delivery stream in order to maintain a vetted, prioritized work backlog. This is one of the most important problems for the PMO to solve and communication is critical to success. Risk increases naturally when planning gets too far ahead of delivery or delivery catches up to planning and there is not enough work ready for execution (i.e. wait time waste). Problems with launching new products and features also contribute to disruptions in the experiment pipeline. Ongoing attention to this dynamic and timely communication when the situation starts to become unfavorable are the best defenses we have currently. I don’t see that changing anytime soon.

Reduce Complexity – Managing Change and Dependencies

Change has been argued to be the only constant. At Ticketmaster, we strive to provide world class, industry leading ticketing products and services at varying scale for the best live events on the planet. Naturally, client, consumer and supplier needs continually compete for priority. Best laid plans will change due to business demands and organically as we build-measure-learn. The key, for the PMO, is to ensure that the change process is managed and consistent.

Change is disruptive and should only be made only after objective evaluation and approval by the appropriate people who understand the overall effects (positive and negative) of the change. Change at the portfolio level is managed through the quarterly planning process. More frequent change management is inherent in the delivery iteration cycles. Once a change (pivot) is approved, the PMO must ensure the change and the effects are appropriately communicated up, down and across the organization.

Dependencies are risks by nature and come in many shapes and sizes. The Lean approach inherently seeks to minimize dependencies though it will take some time to get to an ideal state. The PMO must still identify and manage cross-organizational team dependencies, third party dependencies, technology dependencies, schedule dependencies, shared resources…and so on. Dependencies are a point of focus for the PMO in the quarterly planning process and during iterations. If a dependency becomes a problem, the PMO must proactively guide the teams involved on a path forward to an acceptable solution while minimizing waste in the experiment pipeline.

How do we know it is working?

The Lean approach embraces uncertainty, leverages the unpredictable and demands that we learn quickly as we go to determine if we are on course to deliver value for our customers or need to pivot. The realization that you are not solving a real problem and not delivering value can come at any point in the planning-delivery-operations cycles. The PMO works to provide value every step along the way through enabling the business to take action, learn and grow.

So how will we know if the change to a Lean PMO and Portfolio management approach is working? The PMO will continually seek feedback from our customers on a regular basis – the lynch pin of a value driven Lean approach, validated learning and continually improving. How do we measure if we are delivering value? This question begins a new conversation. Gary O’Brien answers the question in his August 2014 blog post, How to Measure Value in ThoughtWorks Insights. I recommend you check it out.

Resources:

Byrne, Art, and James P. Womack. The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company. New York, 2013: McGraw-Hill. Electronic.

Humble, Jez, Barry O’Reilly, and Joanne Molesky. Lean Enterprise. Sebastopol, California: O’Reilly Media, 2014 (Early Release 5). Electronic.

Kniberg, Henrik. Lean from the Trenches. Raleigh, North Carolina, 2011: Pragmatic Bookshelf. Electronic.

Maurya, Ash. Running Lean, 2nd Edition. Sebastopol, California: O’Reilly Media, 2012. Electronic.

O’Brien, Gary. “How to Measure Value.” ThoughtWorks.com. Web. Nov. 2014.

One thought on “Lean Transformation

  1. Preach it John! I have often reflected upon how a kanban approach might often works better than classic agile or waterfall in our org. Limiting WIP and utilization of value stream mapping is essential to a LEAN transformation. -Great article. I look forward to seeing it and helping it evolve within our enterprise!

    -Jordan Hedgepeth
    Sr. Program Manager – Ticketmaster/Live Nation
    Global Technical Infrastructure – PMO

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