This document discusses thriving under uncertainty using options thinking and lean kanban principles. It describes how projects are often planned optimistically but end up delivering less than expected due to unforeseen variations. It advocates adopting an options mindset to minimize risks and costs from failures while maximizing learning. This involves using techniques like classes of service, probes, enablers and options expiration dates to balance exploration and exploitation. The overall goal is to absorb variations and make projects more anti-fragile by benefiting from disruptions.
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LLKD13 thriving under uncertainty
1. Thriving under
uncertainty with
Discovery Kanban
London Lean Kanban Day
March 2013
patrick.steyaert@okaloa.com
@PatrickSteyaert
息 Patrick Steyaert, 2013 Thriving under uncertainty
2. Options and variation 2
Option 1
Effort = 300MD
Most likely delivery = May 31
Variation = 賊10 days
Deadline = May 15
Option 2
Effort = 300MD
Most likely delivery = May 31
Variation = 賊20 days
息 Patrick Steyaert, 2013 Thriving under uncertainty
3. Thriving under uncertainty 3
Plan perspective Risk perspective Options perspective
(Robust but fragile) (Resilient) (Anti-fragile)
則р variation and 則р absorb variation and 則р thrive from disruption;
disruption are not tolerate disruption variation can be
tolerated very well without collapsing beneficial
Customers/ Users /
Stakeholders
TEAM
FLEXIBLE BOUNDARY
息 Patrick Steyaert, 2013 Thriving under uncertainty
4. 4
Pains and gains in the history of projects
Absorbing variation - Classes of Service
Thriving on variation - Options
Kanban variations
息 Patrick Steyaert, 2013 Thriving under uncertainty
5. A calamitous history of 5
projects*
Project Cost overrun Project Actual traffic
Channel tunnel 80% as percentage
UK-FR of forecast
resund 70% Channel tunnel 18%
access link, DE UK-FR
Great belt link, 54% Miami metro, 15%
DE USA
resund coast- 26% Denver 55%
to-coast International
Airport, USA
Conclusion: dont trust
Conclusion: dont trust
cost estimates
usage forecasts
*Source: Megaprojects and risk, an anatomy of ambition, Bent
Flyvbjerg, Nils Bruzelius and Werner Rothengatter, 2003
息 Patrick Steyaert, 2013 Thriving under uncertainty
6. IT projects 6
ps of issues that cause most project failures.
IT projects >$15 million1
2 45%
ssues Bene鍖ts shortfall 56%
Delivering large-scale IT projects on time, on budget, and on
value, Michael Bloch, Sven Blumberg, and J端rgen Laartz
3 Skill issuesof
17 percent IT projects go so bad that they can
4 Execution issues
threaten the very existence of the company (cost
overruns of +200% and schedule slippage of nearly 70%)
Double Whammy How ICT Projects are Fooled by Randomness and
Screwed by Political Intent, Alexander Budzier, Bent Flyvbjerg, Aug
2011.
6
息 Patrick Steyaert, 2013 Thriving under uncertainty
7. Delusions and deception
則р Imperfect forecasting techniques and
inadequate data
7
則р Planning fallacy & optimism bias
則р Strategic misrepresentation and
asymmetric information
息 Patrick Steyaert, 2013 Thriving under uncertainty
8. How projects are sold 8
Gains/Losses
f(X)
Gain Convexity
Unknown
X
Pain
Gain more than pain
息 Patrick Steyaert, 2013 Thriving under uncertainty
10. How projects turn out in practice 10
Gains/Losses
f(X)
Gain
Unknown
X
Pain
Concavity
Pain more than gain
息 Patrick Steyaert, 2013 Thriving under uncertainty
11. 11
Variation and disruption
則р Order of magnitude (size) 則р Political intervention
則р Customer 則р Interrupt work
則р Team 則р Technical problems
則р Policies 則р Changing requirements
則р Technology 則р Resources not available
則р Environment 則р Environmental problem(s)
則р 則р
息 Patrick Steyaert, 2013 Thriving under uncertainty
12. Amplification pain 12
Changes
Prioritization
Requirements Product
Work
Failure
load /
Rework
息 Patrick Steyaert, 2013 Thriving under uncertainty
14. Complex projects 14
How they are planned How they turn out
Convexity Concavity
息 Patrick Steyaert, 2013 Thriving under uncertainty
15. Absorbing variation 15
Plan perspective Risk perspective Options perspective
(Robust but fragile) (Resilient) (Anti-fragile)
則р variation and 則р absorb variation and 則р thrive from disruption;
disruption are not tolerate disruption variation can be
tolerated very well without collapsing beneficial
Customers/ Users /
Stakeholders
TEAM
FLEXIBLE BOUNDARY
息 Patrick Steyaert, 2013 Thriving under uncertainty
16. Kanban systems Less pain 16
Variable
capability Variable
demand
Capability
Bottlenecks
Uncertainty Demand
Loopbacks
Kanban
息 Patrick Steyaert, 2013 Accredited Kanban Training
17. Cost of delay 17
EXPEDITE
Cost/Value
FIXED DATE
STANDARD
INTANGIBLE
x time
息 Patrick Steyaert, 2013 Thriving under uncertainty
18. Classes of service - Minimize Cost 18
of delay while retaining flexibility
Cost of delay Urgent Respond Policy
則р critical and immediate EXPEDITE 則р will be pulled immediately
cost of delay by a qualified resource
則р cost of
delay goes up FIXED DATE 則р will be pulled based on
risk assessment
Cost of delay
significantly after
Flexibility
deadline (delivering on time)
則р cost of
delay is shallow STANDARD 則р will use first in, first out
but accelerates before (FIFO) queuing approach to
leveling out prioritize pull
則р cost of
delay may be INTANGIBLE 則р will be pulled through the
significant but is not system in an ad hoc
incurred until much fashion
later
Important Anticipate
息 Patrick Steyaert, 2013 Thriving under uncertainty
19. Capacity allocation across classes of 19
service
EXPEDITE
Expedite +1 = +5%
Cost/Value
Fixed
date 4 = 20%
FIXED DATE
Standard 8 = 50%
Intangib
le 6 = 30%
STANDARD
INTANGIBLE
x time
息 Patrick Steyaert, 2013 Thriving under uncertainty
20. Thriving under uncertainty 20
Plan perspective Risk perspective Options perspective
(Robust but fragile) (Resilient) (Anti-fragile)
則р variation and 則р absorb variation and 則р thrive from disruption;
disruption are not tolerate disruption variation can be
tolerated very well without collapsing beneficial
Customers/ Users /
Stakeholders
TEAM
FLEXIBLE BOUNDARY
息 Patrick Steyaert, 2013 Thriving under uncertainty
21. Amplification of gains 21
Opportunities
Resources
Requirements Product
Work
User
feedback/
Revenue
息 Patrick Steyaert, 2013 Thriving under uncertainty
22. Opportunity for learning 22
Risk/Options Cost/Value
Probes Enablers Table stakes Exceptionals
Is there a Can we build What is Protect & exploit
need? it? essential? existing value
time
息 Patrick Steyaert, 2013 Thriving under uncertainty
23. Never commit early (unless you 23
know why)
Potential
option Validate
PROBE
Potential
option Validate
ENABLERS
Potential Validate
option
TABLE STAKES
Potential
option
EXCEPTIONAL
息 Patrick Steyaert, 2013 Thriving under uncertainty
24. Exercising options 24
Potential Exercised
Option Option
Option
息 Patrick Steyaert, 2013 Thriving under uncertainty
25. 25
Options expire
則р Expedite critical and immediate
cost of delay
竪 will be pulled immediately by
a qualified resource
則р Fixed date cost of delay goes
up significantly after deadline
竪 will be pulled based on risk
assessment (delivering on time)
則р Standard cost of delay is
shallow but accelerates before
leveling out
竪 will use first in, first out (FIFO)
queuing approach to prioritize pull
則р Intangible cost of delay may be
significant but is not incurred until
much later; important but not
urgent
竪 will be pulled through the
system in an ad hoc fashion
息 Patrick Steyaert, 2013 Thriving under uncertainty
26. Options have value 26
Gains/Losses
f(X)
Gain Convexity
Unknown
X
Pain
Gain more than pain
息 Patrick Steyaert, 2013 Thriving under uncertainty
27. Options - Maximize learning,
27
minimize cost of failure
Option Exploration
則р Fragmented functionality, PROBE 則р Explore customers
Lo-Fi implementation and needs
Learning opportunity
則р Minimally coherent end- ENABLERS 則р Explore feasibility
to-end functionality and critical quality
Cost of failure
showing critical quality
則р End-to-end functionality TABLE STAKES 則р Explore what is
with standard quality essential for
exploitation
則р Broad and detailed EXCEPTIONAL 則р Protect & exploit
functionality, Hi-Fi existing value
implementation
Commitment Exploitation
息 Patrick Steyaert, 2013 Thriving under uncertainty
28. Exploration versus exploitation 28
Potential
option Validate
PROBE
Exploitation
Potential
option Validate
ENABLERS
Potential
Exploration option Validate
TABLE STAKES
Potential
option
EXCEPTIONAL
息 Patrick Steyaert, 2013 Thriving under uncertainty
29. 29
Real options*
An option is the right to do
something but not the obligation
則р Options have value
則р Options expire
則р Never commit early (unless you
know why)
*Ref: Chris Matts & Olav Maassen
息 Patrick Steyaert, 2013 Thriving under uncertainty
30. The knowledge discovery process 30
Narrative,
fragmented, Working product Decision to
possibly (i.e. probe, dampen or
conflicting enabler,) amplify
Potential Exercise Validate Abandoned
Option
option option option / Continue
Coherent, Feedback
shared (e.g. user
concept feedback)
Discovery front-end Development Discovery back-end
Forming hypotheses Validating hypotheses
息 Patrick Steyaert, 2013 Thriving under uncertainty
31. Discovery Kanban Board 31
WIP limits express exploration exploitation balance
Exploration Exploitation
Legend
Expedite Potential Option Exercise Validate Abandon /
option option option Continue
Fixed
date 3/3/9/4 1/1/5/2 1/1/4/2
Probe
Standard probe probe
28/3
Intangib Enabler
le enabler
Intangible
Fixed date probe
probe
F
Table Demo for tradeshow
table R&D
L
stakes on 28/3
stakes O
W
Exceptional
Expedite table stakes
Overdue regulatory Standard enabler
development Framework development
FLOW
息 Patrick Steyaert, 2013 Thriving under uncertainty
32. Kanban variations 32
Delivery Kanban Discovery Kanban
1. Visualize work 1. Visualize options
2. Limit work in progress 2. Minimal options / maximum un-
validated assumptions
3. Manage Flow flow of work
3. Manage Flow flow of customer/
4. Make Process Policies Explicit user acquisition
work policies (e.g. in terms of
cost of delay) 4. Make Process Policies Explicit
option policies (e.g. in terms of
5. Implement Feedback Loops at cost of failure)
workflow, inter-workflow and
organizational levels 5. Implement Feedback Loops
customer feedback loops
6. Improve Collaboratively, Evolve
Experimentally (using models/ 6. Improve Collaboratively, Evolve
scientific method) Experimentally (using models/
scientific method)
息 Patrick Steyaert, 2013 Thriving under uncertainty
33. Not just for start-ups
則р Product development (mature product)
33
則р Business-IT programmes
則р Business transformation
則р Lean agile coaching
息 Patrick Steyaert, 2013 Thriving under uncertainty
34. Thriving under uncertainty 34
Plan perspective Risk perspective Options perspective
(Robust but fragile) (Resilient) (Anti-fragile)
則р variation and 則р absorb variation and 則р thrive from disruption;
disruption are not tolerate disruption variation can be
tolerated very well without collapsing beneficial
Customers/ Users /
Stakeholders
TEAM
FLEXIBLE BOUNDARY
息 Patrick Steyaert, 2013 Thriving under uncertainty
35. Inspiration 35
Knowledge discovery process:
http://alistair.cockburn.us/
The+Design+as+Knowledge
+Acquisition+Movement
息 Patrick Steyaert, 2013 Thriving under uncertainty
36. Thank You
patrick.steyaert@okaloa.com
@PatrickSteyaert
息 Patrick Steyaert, 2013 Thriving under uncertainty
37. Classifying features 37
Epic Epic Epic
Story Story Story Story Story Story Story
Story Story Story Story Story
Story Story
Story Story
Story
Story
Story Story Story
息 Patrick Steyaert, 2013 Anti-fragile projects
38. Classifying features - probes 38
Epic Epic Epic
Story Story Story Story Story Story Story
Story Story Story Story Story
Story Story
Story Story
Story
Story
Story Story Story
息 Patrick Steyaert, 2013 Anti-fragile projects
39. Classifying features - enablers 39
Epic Epic Epic
Enablers
Story Story Story Story Story Story Story
Story Story Story Story Story
Story Story
Story Story
Story
Story
Story Story Story
息 Patrick Steyaert, 2013 Anti-fragile projects
40. Classifying features table stakes 40
Epic Epic Epic
Enablers
Story Story Story Story Story Story Story
Story Story Story Story Story
Table stakes
Story Story
Story Story
Story
Story
Story Story Story
息 Patrick Steyaert, 2013 Anti-fragile projects
41. Classifying features exceptionals 41
Epic Epic Epic
Enablers
Story Story Story Story Story Story Story
Story Story Story Story Story
Table stakes
Story Story
Story Story
Story
Story
Exceptionals Story Story
Story
息 Patrick Steyaert, 2013 Anti-fragile projects