Continuous Risk Mitigation and System Thinking

by alisson.vale 5/12/2009 4:58:00 PM

I always looked at risk management activities using the event-driven risk approach offered by the current project management traditions.Perhaps because of this, I've never paid so much attention on this topic before, as I am doing now. 

Flying back to Brazil from the conference in Miami, I had the opportunity to read the amazing piece of text that David Anderson wrote about Risk Management on the proceeding book of the conference. After that, I've started to think about risks in a different dimension. Now, I’m diving on this conclusion:

Mutual Trust Relationships can be sustained by intrinsic risk management mechanisms.

There is definitely something more in dealing with risks than just trying to create mitigation and contingency plans up-front.  

To be relevant, risk management has to be merged into the system to orchestrate his behavior.

I have this feeling today that any decision point in a process should be oriented by some risk analysis approach. I’m not talking about a plan for risk mitigation here; I’m talking about a process for continuous risk mitigation. Is that possible?

In David's article, he describes a technique that uses Classes of Service (CoS) as an instrument to make the system works oriented to risk decisions according Cost of Delay. So, before you inject new work into the system you are conditioned to think about risks, once you have to classify each work item by doing an analysis of the associated Cost of Delay. The type of risk is going to influence behavior by the application of different contextual policies. Pure System Thinking!

Labeling work items is a interesting mechanism to influence system behavior. If you use an e-mail system like Gmail you can see that in practice. When you decide to tag messages by some form of classification, you define a visual agreement mechanism that is able to influence your behavior. You are going to act differently when you see a message with a special tag type. 

What David is proposing is labeling work items by risk criteria, which is going to subordinate the system to be risk-oriented, a fundamental part of self-sustainable processes. So that's why David's article got my attention in the conference book. Explicit Risk Management is missing in our process. We have to figure it out how to apply this knowledge on it.

In our process, we have a different use for Classes of Services.

Instead of thinking about the risk, we are thinking about Value mapped to agreements that we need to respect as we interact with our customers. 

We talk to them in these terms:

“You (the customer) should trust us (the vendor) as we will try very hard to keep your business up and running by solving any problem (1) that you have or by helping you in any operation (2) that you need assistance from us; we also are going to sustain your processes by doing improvements and adaptations (3) as your business evolve and, while we do that, we are constantly trying to deliver new features and capabilities in our software to create new business opportunities (4) that generates value for you in your market share.” 

This “Agreement Statement” maps to our Classes of Services (CoS):

1 - Problem solving
2 - Support and Operations
3 - Improvements for sustainability
4 - New Value

The intention of our "Agreement Statement" is to create a Mutual Trust Relationship with them by being flexible with their needs and getting flexibility from them for our needs (which are mainly estimation, prioritization, error tolerance, and others). So, all units of work derived from this CoS have Value for the customer. But the lack of any of this agreement can make the long term relationship that we aim becomes unstable.

We need to create balance by delivering units of work observing the system against this "Agreement Statement". During this observation we have to consider each individual customer and the whole system to make right decisions.

We have an assumption here which is based on the fact that we have different entities of our system competing by the same (and limited) resource. So they have to trust us that we are going to take the best decision considering this "invisible" competition that is happening in background. This decision process is all about "risk analysis.” 

So, Risk Management is an important activity to create effectiveness on this decision process. An effective decision process creates trust, and high levels of efficiency on risk control leads to high levels of trust on this relationship.

Using CoS as David suggests seems to be a quite reasonable approach, once CoS is the primary way to classify units of work in Kanban Systems. But, I’ve realized an underlying model for managing risks here, which are leading us to the definition of a new orthogonal ax in our system for risk-oriented work items classification and also for risk-oriented policies. Merging risk analysis into our system to influence its behaviors is going to be my next challenge for now.

 

Inside the Lean & Kanban Conference

by alisson.vale 5/10/2009 8:40:00 AM

Last week I was in Miami attending the Lean and Kanban conference. This post contains my personal view about the conference and about some hot topics that gain my attention while I was there. 

 

 

Between Sessions on the 2nd day 

Structuring the community  

The announcement of the new Lean Software and Systems Consortium makes me think about how important is to take this community to a next level in terms of organization. I have this perception that the Lean community is fragmented today in a couple of different trends. It would be cool if this Consortium could be a real representation of the whole Lean community. But I really don´t know if it is going to be possible considering how we are structured today. Anyway, I'm an enthusiastic about this idea and I'm ready to contribute somehow to make this happen.

People

Amazing how this community is surrounded by brilliant people that really knows about what they are talking. I am still impressed with the quality of the attendees. Many of them were there to teach, not only learn. I really don't know what was better: the talks or the conversation between them. The residual learning generated by the conference came from a flat transference of knowledge, not a top-down (speakers->audience) one. The presentations were open to conversation, people asked questions during the talks, not only after them. Many times, people asked for the microphone to clarify positions and thoughts, not just for questions. The open space at the end just make this more evident.

 

 

Preparing board for the Open Space 

 

Enlightening People

David Anderson brought powerfull ideas on his talks. David has this ability to makes me have shining and sudden ideas when he talks or writes. It's not about trying to teach how to walk the path, it's more about direct you to a possible path and let you decide how to walk it. His recipe for success is becoming more powerfull as the community is getting more experience with Lean and its principles. WIP reduction, quality focus, demand versus throughput and prioritazation are already "a spread message" as we saw in most of the study cases. However, the new "reduce variability" message is still out of the people focus. Maybe we are going to see progress on this issue in study cases at the next conference.

An important message that I've got from David was to avoid the temptation to establish any type of "Lean Framework". Let's try to not copy the way that how other industries are applying Lean and focus on principles. If the message is strong (as it is in Lean), people are going to be able to find the right way to make it work in their own situations.

Jean Tabaka was another key personality of this conference. In her presentation, she was able to transform all the materialism that surrounds Lean with numbers, curves, graphs, and other technical stuff in something organic, system oriented. I like pretty much of the continous learning approach suggested by her. Actually, I have written about this on my article for the proceedings book. Profound knowledge about your own system, mostly formed by the business, the organization culture and the people is the most powerfull way to get leverage for growing. Jean has also an incredible leadership nature. She is always leading all conversations or activities that she is envolved. She also gives to the audience a real bonus by showing us how to facilitate an Open Space and how to conduce a wonderfull retrospective. Amazing the way that she works.

Corey Ladas was a big surprise for me. Definetely one of the most open-minded and intellectualized members of the community nowadays. You can watch him talk for hours without getting bored. I've got a copy of his Scrumban book and I have to say that the title can distract potential readers to buy it. This book is an amazing description about Lean applied to software development. A really practical view that is pretty rare to find in other Lean publications in the software area. The Scrumban technique is there, but is just a small part of a whole rich content about Lean.

Study-Case Talks

Several presentations described different ways that Kanban and Lean were introduced in a lot of scenarios. It's interesting to see how powerfull solutions are built when you don't prescribe the how ("practices and methods"), but provide the why ("values and principles"). This community is empowering people around the world to discover the best way to design processes and to influence culture organization with simple instructions like create limits to WIP and make value flows. I really like the way that Eric Willeke and Chris Shinkle prepare their material. Eric told us his story in a very unusual and interesting way. How Scrum has failed in absorb the company scenario and how kanban embraced this scenario and empowered people to make the work done. Chris Shinkle got my attention by the creative approach comparing his kanban adoption to the Dreyfus Model of Skill Acquisition. This insight is awesome not just for Kanban and Lean implementations, but for whatever initiative that intents to spread knowledge for people in organizations.    

 

New Room Layout just before the Open Space session 

 

My Presentation 

I presented at the second day just before lunch. The main challenge for me was try to describe our model, which has its own peculiar details, with the limitations of my english-as-second-language issue. But the massive feedback that I've collected after the presentation makes me believe that this was not an issue at all.

I have started my presentation describing our model which is based on a mutual trust relationship with our customers. This relationship emerges from the observance of four aggreements defined as "quick problem solving", "support for operations", "improvements for sustainability" and "new value". Actually, they are all perceptions of value by the customer (it needs and pays for all of them), but for us, three of them are perceptions of waste ("new value" is not). So they are conflicting perceptions of Value. In fact, it is difficult to establish priority between the Value generated by this activities. It's totally contextual. So we try to create balance between them. Giving to the customer nothing more than they need, at the time they need.

Classes of Services for us are the representation of this aggreements in our process. Units of work are derived from these classes of services. The Units of work are represented by cards that flows between different stages in an eletronic board that holds a set of stages distributed in 3 big areas: Demand Management, WIP Management and Delivery Management.

So, I have talked a little about each area describing some interesting issues like a prioritization filter for Demand Management, the collaboration model in WIP Management and Release per Feature and Traceability in Delivery Management.

The presentation has finished with a demo of this eletronic board and other open source tools that compose an integrated environment for technical operations.

You can download my slides here

You can read people tweeting during my presentation here

You can read reviews of each presentation here

[Update] David Anderson wrote some nice words about my presentation here

[Update] Some discussion in Agile Executive about my presentation here

Retrospective results at the end. 

 

So, finally, I would like to say thank you for everyone that was there and that I have a chance to talk with. I see you guys on the next conference. 

About the Autor

Alisson Vale Alisson Vale
Project Leader at Phidelis Tecnologia.


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