Fit For Purpose David J Anderson PDF

Fit For Purpose
Resilience & Agility in Modern Business
Presenter
David J. Anderson
CEO
Agile Business Conference

London
October 2014
Release 1.0
dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

http://lkuk.leankanban.com
America Square Conference Centre

London
Register now!
Understanding
“fitness for purpose”

What makes a pizza delivery service
“fit for purpose” ?
• Fitness criteria are metrics

that measure things
customers value when
selecting a service again &
again
• Delivery time
• Quality
• Predictability
• Safety (or conformance to
regulatory requirements)

Meet Neeta - a project manager
• Delivery time =
approximately 1 •hour
Neeta’s team are working
• Non-functional quality =
tasty & hot
late (again)
• Functional quality•(order
Neeta accuracy)
needs=to feed them
doesn’t matter if small mistakes are
made, geeks will eatwith
any pizza
flavor of pizza
• Predictability = • What attributes do her team
+/- 30 minutes is acceptable
• Safety = care about in a pizza delivery
so long as health & service?
safety in food
preparation is good, it’s fine

Neeta is also a working mom!
• Neeta
• Delivery
getstime
home= late.
Her20kidsminutes
are really
• Non-functional quality =
hungry and
doesn’t eventoo much, it’s pizza!!!
matter
• Functional
though quality (order accuracy) =
she shouldn’t
sheit must be cheese pizza! No other flavor is
decides to order
acceptable! (even if you take the pepperoni
off)for them
pizza
• Predictability =
• What+/-makes
5 minutesa pizza
maximum!!!
• Safety service
delivery =
only mommy
acceptable worries
to her kidsabout that stuff!
age 4, 6, 9 & 11 years?

Lesson 1

To be “fit for purpose” there is a
We need to offer a selection of
product component & a service
different recipes which are tasty
delivery component
& popular. However, we must
also deliver with speed &
predictability

Modern creative & knowledge
Operational excellence often
worker businesses and service
obsess
delivery
with excellence
product are often
definition & strategy
overlooked or treated as inferior
management skills

Lesson 2

Neeta
Each of has 2 identities
Neeta’s identities –
Traditional
Mother and demographic
Project &
Manager
represents
income a different
group marketdoes
segmentation
Nor,
segment forfor
thethat matter,
pizza do
delivery
not accurately
personas. As capture
Neeta the
represents
contextservice
to understand
two segments not just one
“fit for purpose”
persona

Defining Fitness Criteria

Market Adoption Lifecycle Segmentation
Adoption
Moore’s
Market
Rate
Of
Chasm
Little
Chasm
Enthusiasts Early Early Late Laggards time

Adopters Majority Majority
Fit for purpose Change of time Fit for purpose
Hip Niche Permission Cost Low Cost

Cool Market Giving Effective Easy Access
Buggy Features Early adopter Broad Features Forced adoption
Community Viewed as
development Good func quality Exceptional Exceptional taxation
Adequate non-func func and non- func and non-
quality func quality func quality

Customer Storytelling & Clustering
Tell stories about real
customers, their
Give eachwhat
motivation, cluster a “nickname”
they
buye.g.
and why. Cluster
“All ins”
similar• stories
• “Aspirationals”
• “Bet hedgers”
• “Boy scouts”

You can’t just ask!
Neeta, how fast would
Believe
you like your what customers
pizza
actually
delivered? How do, do not believe
what
predictable dothey
Customers
Would yousay
will
you paythey’ll
tend
need to tell
more do!
for
you
us to be they
theneed
with our better
delivery
things service
you say you
and Actually
more need
estimate? behavior
features
andthan willthey
want? vary
from declared
really need! intent!
No, probably not!

Who knows your customers?
• Front line staff
• Those who take and those
who deliver orders
• Those who provide
“customer care”
• Often the lowest paid staff
in a business
• Often the highest turnover,
shortest tenured positions
• And yet, they have the vital
information that enables the
business to survive, thrive
and compete

Pizza boy knows Neeta’s Story!
Staff who meet customers

can be trained to learn
Create ways
what matters to capture
to them
and customer
why stories or directly
involve customer facing staff
when defining customer
segments fitness criteria

GT car manufacturer story
A well known manufacturer
of GT cars Determining
Damaging your
determined fitnessbrand,
customers criteria
were thresholds
your prepared
reputation to by your
and
They learned
reducing this by
service letting
levels until
wait 21 profitability
months to take is a strange
delivery time slip
customer to 27 months
complaints rise to
delivery way to discover how
and to
receiving cancellations
dangerous levels isn’tand
a
be…
customers switching
“safe to to a rival
fail” approach!
manufacturer
“fit for purpose!”

Is it “safe to fail”?
Retarding customer service until
We need generalcomplain
customers guidance vehemently or
that allows us tobusiness
take their probeelsewhere could
for If
fitness
we criteria
be can’t
damaging
ask, and we can’t
threshold values that
allow service to is
decline until
• Undermines brand
“safe tocomplaints
fail”
• Damages make the
reputation
threshold evident,
• Loss of marketwhat
share can
• Loss of revenue
we do?
Probing for threshold values by
reducing service quality isn’t “safe to
fail”

Probe with classes of service
Create a class
Fixed of delivery
service to date class of
respond to Look foremerged
the believed
service clusters or way.
newthis
Observe
segment take up
patterns of of class of or
demand, service
similarInitially
expectations,
abusedor by
• Is itemerging
• Set service over-used?
levels (or abused?)
at or segments
close to If so
tighten marketing,
qualification eligibility
anticipated threshold levels criteria
criteria were
• Is it under-used? tightened
Consider removing
it up.

Telecom Equipment Example
A Now design
platform and offer 3
maintenance
… Each request is tagged with the
Imagine 3 classes
department
American of
at service…
atelco
telecom
originating telco operator for operators
withthe
whom equipment
different
request manufacturer
strategic
is being positions…
• High quality,
receives demand tight “done”
only from
implemented. Each operator
criteria for each step is
Verizon
given a •lane
• internal
value
on lead
the application
quality most board
kanban
Short time – pull priority,
departments…
• Sprint value
looser
time-to-market
“done” criteria
• Voicestream/T-Mobile USA values low
• Low cost – junior staff, lowest
cost
priority compared to other
work

Different lanes, different risks
Engin- Deploy-
eering ment
Ready Development Testing Ready Done
10 10
Ongoing Done Verification Acceptance
10 ∞
Each lane represents a different
Different classes of service and
Verizon 10source of demand but also
different pull criteria policies are
different fitness criteria and
G
defined for each laneP1providing
threshold values
service levels
DA
tuned
AB
to the “fitness
Sprint
for purpose” expectations of each
10 customer
D E
PB MN
T-Mobile 10
F
GY
DE
I

Lesson 3

To have confidence you are
Classes of
offering service that
a service should align
is “fit to
for
To market
serve more
purpose”, segments
you than
mustone and fitness
market
offer different
criteria
segment (or stakeholders
adequately,
classes you must
of service needs)
offer a selection of classes of
service

Service Delivery Kanban
improves business agility

Commitment Frequency
Dev Test Release
Ideas Ready Development Ready Testing UAT Ready
5 3 5 3 ∞ ∞
Frequent
OngoingDone replenishment &
Replenishment
commitment is more agile.
Pull
On-demand commitment is
FF
F D most agile!
F F
F G E
F
The frequency of system
replenishment should reflect
arrival rate of new information
and the transaction &
coordination costs of holding a
Discarded I
meeting
I

Defining Kanban System Lead Time
Dev Test Release
5 3 5 3 ∞ ∞
Ongoing Done
The clock starts ticking when we

accept the customers order, not
Pull
when it is placed!
FF Kanban
F D system lead
F F Until then customer orders are
time ends
F G merelyEavailable options
F when the
item reaches
System Lead Time the first ∞
queue
Discarded I
I

Delivery Frequency
Dev Test Release
5 3 5 3 ∞ ∞
Frequent delivery is more
Ongoing Done
Delivery
agile.
Pull
FF On-demand
D
delivery is most
F
F F agile!
F G E
F
The frequency of delivery should

reflect the transaction &
coordination costs of
deployment plus costs &
Discarded
toleranceI of customer to take
I delivery

Lesson 4

Kanban
Kanban systems
doesn’t usedecouple
time-boxed
planning,
Instead prioritization
commitment &
is deferred,
iterations, or conventional
Service delivery from
commitment can be tuned
lead toand
timeand
selection is “just-in-time”
planning or prioritizaztion
the dynamics
deliveryofscheduling
the business
prioritization is dynamic
methods & based
environment and evolve to be
on class of service
“fitter for purpose”

Adapting to deliver better service

Each service delivery workflow can have its
own kanban system
Observed
Capability
Demand
Observed
Capability
Demand
Observed
Capability
Demand

Dependencies between systems create
an ecosystem
Observed
Capability
Demand
Looking downstream, you want the

system to help you anticipate and
manage
Looking dependencies
upstream, Observed
you want the
Combine the two, and across the
system to help you Capability
anticipate and
organization you smooth flow
manage demand
Demand
end-to-end improving lead times

and predictability
Observed
Capability
Demand

Feedback is needed at 3 levels
Operations
Review
monthly
Service
Delivery
Review
weekly
Standup
Meeting
daily

Standup Meeting
Daily
Disciplined conduct and

acts of leadership lead to
improvement
opportunities
Problem solving &

improvement discussions
are taken outside the
meeting

Service Delivery Review
Weekly
A focused discussion about system capability
Usually in private (often 1-1) between a more senior manager and
individual(s) responsible for the system operation
Review against fitness criteria metrics, e.g. current capability versus lead time
SLA with 60 day, 85% on-time target
Discuss shortfalls against (customer) expectations
Analyze for assignable/special cause versus chance/common cause
Discuss options for risk mitigation & reduction or system design changes to
improve observed capability against expectations

Buffer dependencies, agree SLAs
5 4 3 4 2 2
Input Analysis Dev Development Build Release ...

Queue In Prog Done Ready In Prog Done Ready Test Ready
Waiting on
External Group
Dots denote clock

ticking on SLA
Late against SLA
Operations Review
Monthly
Disciplined review of
demand and capability for
each kanban system
Provides system of
systems view and
understanding
System changes are

suggested by attendees

Risks, fitness criteria & classes of service
should be explicit & transparent at all levels
Lead time
Quality
Predictability
Operations
Review
Lead time
monthly
Service
Quality
Predictability
Delivery
Review
Lead time
weekly Quality
Standup
Predictability
Meeting
daily

Organizational Improvements Emerge

Lesson 5

Adaptation and evolution requires
Fitness criteria metrics from the
feedback loops to generate
external environment should be
“mutations” (suggested changes)
used to evaluate fitness and guide
evolutionary changes regardless of
the level in the organization

Sensing Changes in Market
Conditions

We need a different set of
Our business needs the ability to
thresholds for our fitness criteria
“sense” changing customer tastes.
for each market segment
As time goes by, the criteria &
thresholds for a given market
segment may change

Our pizza delivery service can be
“fitter for purpose”
by offering different classes of
But, do wefor
service have
eachthe capability
market to
segment
deliver on customer expectations?

“Fitness For Purpose” Review
Regular recurring meeting
Reviewwith
customer stories
front-line staff
•Review
Do theyFitness
map tocriteria
existing
clusters?
• Do we perceive customers of a
Perhaps
• do
• Or, seeperformed
wecluster/segment
emerging new at different
given are happy
organizational
clusters? levels to roll-up
and consider us “fit for purpose”
information in larger scale
• What services or product features
organizations
or service delivery expectations
have emerged or changed?

Integration with Net Promoter Score
Making sense of supplementary

question responses by clustering
& interpreting fitness criteria
makes Net Promoter Score
actionable!
• NPS should have a 2nd question “Why did you give

this rating?” which has a micro-narrative answer
• Micro-narratives can be clustered with SenseMaker
software. Segments identified and fitness criteria
suggested and tested
Lesson 6

We need the ability to “sense” or
Ourour
sensing
abilitycapability existsmay
to “respond” withno
our staff who be
longer interact directly
appropriate
with customers, we must involve
them directly in our feedback
loops & metrics definition

Conclusions

1. “Fitness for Purpose”
has both a product
component & a service
delivery component
2. Market segmentation
should be done based
on unique fitness
criteria metrics
3. To be confident you are
“fit for purpose” you
must offer a selection of
classes of service
aligned against fitness
criteria metrics

4. Kanban decouples
planning, lead time &
delivery activities
increasing business
agility
5. Adaptation requires
feedback loops & these
should be driven by
evaluation against fitness
criteria metrics
6. Without a capability to
“sense” our ability to
“respond” may be
inappropriate. We need a
“sensing” feedback loop
involving customer facing
personnel

http://lkuk.leankanban.com
America Square Conference Centre

London
Register now!
Thank you!

David Anderson is an innovator in
the management of 21st Century
businesses that employ creative
people who “think for a living” . He
leads a training, consulting,
publishing and event planning
business dedicated to developing,
promoting and implementing new
management thinking & methods…
About He has 30 years experience in the high technology industry

starting with computer games in the early 1980’s. He has
led software organizations delivering superior productivity
and quality using innovative methods at large companies such
as Sprint and Motorola.
David defined the Modern Management Framework and
originated Kanban Method an adaptive approach to improved
service delivery. His latest book, published in June 2012, is,
Lessons in Agile Management – On the Road to Kanban.
David is CEO of David J. Anderson & Associates Inc., a
consulting and training firm operating globally offering
management training solutions for 21st Century businesses
where employees make performance defining decisions daily.

Acknowledgements
Customer storytelling and segmentation by clustering stories will be recognized

by some as a form of Dave Snowden’s Sense Making exercise.
“Safe to fail” is an approach to experimental, evolutionary adaptation to a

complex and changing environment, also advocated by Dave Snowden.
Sense and Respond was inspired by Stephen Parry and his book of the same
title.


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Fit For Purpose

Resilience & Agility in Modern Business

Agile Business Conference

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

America Square Conference Centre

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

• Fitness criteria are metrics

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

Enthusiasts Early Early Late Laggards time

Hip Niche Permission Cost Low Cost

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

Staff who meet customers

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

The clock starts ticking when we

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

The frequency of delivery should

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

Looking downstream, you want the

end-to-end improving lead times

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

Disciplined conduct and

Problem solving &

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

Input Analysis Dev Development Build Release ...

Dots denote clock

System changes are

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

dja@djaa.com @djaa_dja Copyright David J. Anderson & Associates (UK) Ltd.

Making sense of supplementary

• NPS should have a 2nd question “Why did you give