Practical Kanban

1. Kanban is about optimizing value creation, not individual teams

Kanban is not a method for optimizing teams, since the term "team" isn't even used in the service-oriented view.

Value stream focus. Kanban shifts the focus from optimizing individual teams to improving the entire value creation process. It encourages organizations to think in terms of services that generate customer value, rather than organizational structures. This perspective allows companies to identify and address bottlenecks and inefficiencies across the entire workflow, leading to better overall performance.

System-wide improvement. By looking at the whole system, Kanban helps avoid local optimizations that can lead to global sub-optimization. It promotes a holistic view of work, emphasizing the importance of managing dependencies between different parts of the organization. This approach leads to more effective decision-making and resource allocation, ultimately resulting in faster and more predictable delivery of value to customers.

2. Visualize work, limit WIP, and manage flow for effectiveness

Stop starting, start finishing!

Visualization. Kanban boards make work visible, revealing bottlenecks, dependencies, and workflow issues that were previously hidden. This transparency allows teams to identify problems quickly and make informed decisions about where to focus improvement efforts.

WIP limits. Limiting work in progress is a key Kanban practice that:

• Reduces multitasking and context switching
• Improves focus and productivity
• Shortens cycle times
• Increases predictability
• Exposes system constraints

Flow management. By managing the flow of work through the system, organizations can:

• Optimize resource utilization
• Reduce waiting times
• Improve overall efficiency
• Deliver value to customers more quickly and consistently

3. Blockades reveal systemic issues and opportunities for improvement

Kanban does not cause these problems, it simply makes them visible.

Identify root causes. Blockades in a Kanban system often point to underlying systemic issues. By analyzing these blockades, teams can uncover the root causes of recurring problems and develop effective solutions.

Continuous improvement. Regularly tracking and addressing blockades creates a culture of continuous improvement. This process involves:

• Collecting data on blockades
• Clustering similar issues
• Analyzing patterns
• Prioritizing improvements based on impact and effort
• Implementing solutions
• Measuring results

Learning opportunities. Each blockade presents a learning opportunity for the organization. By approaching blockades with curiosity and a problem-solving mindset, teams can develop new skills, improve processes, and increase their overall capability to deliver value.

4. Customer validation is crucial for completing the value creation cycle

Work is only truly completed when the customer can use it unrestricted!

Completing the value cycle. Customer validation ensures that the work delivered actually meets customer needs and expectations. It closes the loop on the value creation process, confirming that the intended value has been realized.

Feedback integration. Incorporating customer validation into the Kanban system allows for:

• Quick identification of issues or misalignments
• Rapid iteration and improvement
• Better alignment with customer needs over time
• Increased customer satisfaction

Predictability and quality. By making customer validation an explicit part of the workflow, organizations can:

• Improve the predictability of their delivery process
• Enhance the quality of their products or services
• Build stronger relationships with customers
• Reduce the risk of delivering features or products that don't meet market needs

5. Knowledge transfer and bottleneck management are key to system efficiency

When you take a look at the cycle time, a notable imbalance can be seen. The active work is a very small part of the entire cycle time, whereas the majority of time is spent waiting.

Identify bottlenecks. Understanding where work gets stuck in the system is crucial for improving flow. Bottlenecks can be caused by:

• Lack of specialized skills
• Overburdened resources
• Inefficient processes
• External dependencies

Knowledge transfer strategies. To address bottlenecks and improve system efficiency:

• Implement pairing and mentoring programs
• Create cross-functional teams
• Develop knowledge bases and documentation
• Encourage skill-sharing sessions

Balance specialization and generalization. While specialists can work quickly, their limited availability can create bottlenecks. Balancing specialist skills with generalist capabilities can help:

• Reduce waiting times
• Improve overall system flow
• Increase flexibility and resilience

6. Coordination through regular meetings drives continuous improvement

Kanban lives from communication, so I try to quickly establish useful meetings such as replenishment meetings (also Spice Girls meetings), regular standup meetings and retrospectives.

Effective meeting cadence. Regular meetings help maintain alignment, address issues quickly, and drive continuous improvement. Key meetings include:

• Replenishment meetings for prioritizing and selecting work
• Daily standups for coordination and issue resolution
• Retrospectives for reflecting on and improving processes

Focus on flow. These meetings should focus on improving the flow of work through the system, rather than status updates or individual performance. This approach helps:

• Identify and address systemic issues
• Promote collaboration across teams and departments
• Align work with organizational goals and customer needs

Continuous learning. Regular meetings create opportunities for:

• Sharing knowledge and best practices
• Reflecting on successes and failures
• Adapting processes to changing circumstances
• Fostering a culture of continuous improvement

7. Forecasting enables data-driven decision making and risk management

Forecasting is an attempt to use model-based prediction to determine the manifestation of future events.

Data-driven approach. Forecasting in Kanban relies on historical data and statistical analysis rather than subjective estimates. This approach:

• Improves accuracy over time
• Reduces bias in decision-making
• Provides a range of possible outcomes rather than a single point estimate

Key metrics for forecasting:

• Work in Progress (WIP)
• Cycle Time
• Throughput

Probabilistic thinking. Kanban forecasting encourages probabilistic thinking about delivery times and outcomes. This mindset helps:

• Set realistic expectations
• Manage risks more effectively
• Make informed decisions about resource allocation and prioritization

8. Cost of Delay quantifies the economic impact of time in decision making

Cost of Delay are those costs, as well as economic effects over time, which occur when the completion of work is delayed or doesn't respond quickly enough to the market.

Economic lens. Cost of Delay provides an economic framework for prioritizing work and making decisions. It helps quantify the impact of time on value delivery, considering factors such as:

• Potential revenue
• Market share
• Customer satisfaction
• Competitive advantage

Improved decision-making. By incorporating Cost of Delay into the decision-making process, organizations can:

• Make more informed choices about which work to prioritize
• Balance short-term gains with long-term strategic goals
• Justify investments in process improvements or additional resources

Sequencing work. Cost of Delay helps determine the most economically beneficial sequence for completing work. This approach ensures that high-value, time-sensitive work is prioritized appropriately, maximizing overall value delivery.

9. Risk assessment balances technical and market considerations

Risk is made up of two components: the level of its possible impact (Risk Value) and the probability of occurrence.

Holistic risk evaluation. Effective risk assessment in Kanban considers both technical and market risks. This balanced approach helps organizations:

• Identify potential obstacles to value delivery
• Make informed decisions about resource allocation
• Develop mitigation strategies for high-impact risks

Risk quantification. Quantifying risks allows for more objective decision-making. Techniques include:

• Independent risk estimation for high-level assessments
• Model-based estimation for more detailed analysis
• Risk profiles and threshold lines for visualizing and prioritizing risks

Continuous risk management. Regular risk reviews and updates help organizations:

• Adapt to changing circumstances
• Identify emerging risks and opportunities
• Improve overall project and product success rates
• Foster a culture of proactive risk management

Last updated: September 13, 2024