Lean at Cisco: Lessons Learned from Lean Product Development and Lean Startup

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Slide deck from my talk on Lean at Cisco: Lessons Learned from Lean Product Development and Lean Startup. The 3 lessons I talk about are:1. Reduce Batch Sizes and Manage WIP Limits2. Customer Development3. Learn to see WasteI gave this talk at the Clayton Hotel on June 21 2012, at a Lean Startup Event organized by Enterprise Ireland and ITAG.

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  • 2010 Cisco and/or its affiliates. All rights reserved. 1

    Lean at Cisco: Lessons Learned from Lean Product Development and Lean Startup Ken Power Internal Agile-Lean Coach/Consultant, Cisco Systems

    Thursday June 21, 2012

    Lean Startup Event Organized by Enterprise Ireland and ITAG

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 2

    Pilot Projects

    2008 First agile pilots Agile Projects Organic Growth across the BU through ground-up pilot projects

    Formal Agile Transition Program

    Launched

    2009 More Teams Agile Program Management

    System Wide Focus

    Formal Training Plan

    Formal Exec Support

    Broader Stakeholder Engagement

    Lean Thinking Lean Principals

    Agile Office Established

    2010 Commitment to sustainable and sustained agility

    Broad Organization Focus

    Focused Stakeholder Engagement

    Closer Customer Engagement

    Investigate Lean Startup approaches

    Culture and Mindset

    2011 Support teams in innovating and developing the processes that are right for them

    Expand adoption across product areas

    Lean Startup principles

    Improve capability of organization

    Develop Portfolio Management Concepts

    Portfolio Management

    across the Business Unit

    2012 Synchronize all products across the BU

    Problem solving and obstacle removal at an org level

    Organization Learning

    Quantify and reduce Technical Debt

    Agile Architecture

    Eliminate Waste

    Ongoing continuous

    improvement

    2012+ Create Flow through the Organization

    Continue to Lead through Innovation

    Focus on Teams and Culture

    Refine and Improve

    Build on Organization Learning

    Sustainable Organization

    January 2008! December 2009! August 2010! May 2012!June 2011!

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 3

    My day job Co-Founder, Agile Office at Cisco Internal Agile-Lean Coach/Consultant

    Extra-curricular activities Fellow of the Lean Systems Society (http://LeanSystemsSociety.org/) Award-winning publications in Agile and Lean product development Frequent speaker at major international Agile and Lean conferences Involved in organizing international Agile and Lean conferences Industry/academic collaborative research on Lean software development with Lero, UL, NUIG PhD research in Lean product development (NUIG) Agile-Lean Galway Meetup (http://www.meetup.com/Agile-Lean-Galway/) Blog: http://SystemAgility.com/

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 4

    http://SystemAgility.com/publications/ http://SystemAgility.com/events/

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 5

    The fallacies that cause delays, undermine quality, and raise costs

    D.#G.#Reinertsen,#The$principles$of$product$development$ow$:$second$genera8on$lean$product$development.#Redondo#Beach,#Calif.:#Celeritas,#2009.###S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#Review,#vol.#90,#pp.#84G94,#May#2012#

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 6

    Myth 1 High utilization of resources and people will improve performance.

    Myth 2 Processing work in large batches improves the economics of the process.

    Myth 3 Our plan is great; we just need to stick to it. Myth 4 The sooner the project is started, the sooner it will be

    finished. Myth 5 The more features we put into a product, the more

    customers will like it. Myth 6 We will be more successful if we get it right the first time.

    D.#G.#Reinertsen,#The$principles$of$product$development$ow$:$second$genera8on$lean$product$development.#Redondo#Beach,#Calif.:#Celeritas,#2009.###S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#Review,#vol.#90,#pp.#84G94,#May#2012#

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 7

    Lean Startups are based on three trends Use of free and open source software Application of agile software development methods Ferocious customer-centric rapid iteration, as exemplified by the Customer Development process

    Sometimes described as Lean Thinking applied to the entrepreneurial process

    Equally applicable to large organizations different challenges

    http://theleanstartup.com/

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 8

    Entrepreneurs are Everywhere Entrepreneurship is Management Validated Learning

    Innovation Accounting Build-Measure-Learn

    !

    http://theleanstartup.com/

  • 2010 Cisco and/or its affiliates. All rights reserved. 9

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 10

    Batch Size

    Cost

    Total Cost

    Holding Cost

    Transaction Cost

    Optimal Batch Size

    D.#G.#Reinertsen,#The$principles$of$product$development$ow$:$second$genera8on$lean$product$development.#Redondo#Beach,#Calif.:#Celeritas,#2009.###S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#Review,#vol.#90,#pp.#84G94,#May#2012#

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 11

    D.#G.#Reinertsen,#The$principles$of$product$development$ow$:$second$genera8on$lean$product$development.#Redondo#Beach,#Calif.:#Celeritas,#2009.###S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#Review,#vol.#90,#pp.#84G94,#May#2012#

  • 2010 Cisco and/or its affiliates. All rights reserved. 12

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 13

    Product

    Early Customer Engagement

    Extended Customer Trials

  • 2010 Cisco and/or its affiliates. All rights reserved. 14

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 15

    Views expressed by Tom & Mary Poppendieck and Taichi Ohno

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 16

    Extra Features Delays Handoffs

    Extra Processes / Relearning Partially Done Work

    Task Switching Defects

    Unused Employee Creativity

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 17

    James Womack

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 18

    Eric Ries, The Lean Startup. (page 274)

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 19

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 20

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 21

    Credo of the Lean Systems Society (http://leansystemssociety.org/credo/)

  • 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 22

    Do not just focus on building great products or providing great services

    Focus on developing great people and building great teams

    Build great organizations that appeal to peoples sense of intrinsic motivation

  • Thank you.