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lsoftware development
                                       e a n
     It’s Not About Working Software
                       First Build the Right Thing
mary@poppendieck.com         Mary Poppendieck        www.poppendieck.com
Gróf András (Andrew Grove)


                                                                                   Business goes on
                                                                                   to new heights
                                            Strategic
                                         Inflection Point

                                       10x change in an element of the business.
                                       What worked before doesn’t work now.
                                       The executives are the last to know.
                                                                                      Business
                                                                                      declines




2   October 10   Copyright©2010 Poppendieck.LLC   l e a n
                                                    From: Only the Paranoid Survive, by Andy Grove,
Is Agile Development
          At An Inflection Point?
    Version 1.0 – Contract Focus           Version 2.0 – Development Focus        Version 3.0* - Customer Focus


   Processes and tools                       Individuals and                   Team vision and
   Comprehensive                              interactions                       initiative
    documentation                             Working software                  Validated learning
   Contract negotiation                      Customer collaboration            Customer discovery
   Following a plan                          Responding to change              Initiating Change



                                               Inflection Point:
                                               Customer Focus
1995                                2000                     2005                          2010




    3       October 10                                              l e a n
                                                              *Kent Beck, Startup Lessons Learned – April 23, 2010
                               Copyright©2010 Poppendieck.LLC http://www.justin.tv/startuplessonslearned/b/262656520
Team Vision and Initiative
     There is nothing so useless as doing efficiently
    that which should not be done at all. – Peter Durcker
        Most products failures are caused by
               a lack of Customers.
                    Not this:                          But this:
                          P
                          R
                          I
                          O
                          R
                          I
                          T
                          I
                          Z
                          E
                          D




                                                       l e a n
                          !




4      October 10     Copyright©2010 Poppendieck.LLC
Validated Learning
Consider the Entrepreneur – The Objective:
Starts out with no customers Minimum Viable Product
                               Does it do the job?
Assembles a business team:     Will customers pay for it?
  Marketing                                    What do we need to learn next?
  Development                              Repeat......multiple times
  Quality Assurance                            Experiment – Learn – Adjust
  Operations
                                                     First be sure that you are
  Support
                                                     building the right thing,
  Finance                                           then be sure that you are
  Others?                                           building the thing right.


5    October 10   Copyright©2010 Poppendieck.LLC   l e a n
Customer Discovery




          Ethnography                               Ideation


Brilliant Systems are the result of a
matching of mental models between
those developing a system and those
who will be using the system.
6   October 10   Copyright©2010 Poppendieck.LLC   l e a n
Initiating Change
WebSphere® Service Registry and Repository
 10 month deadline – didn’t know the details
     Solution: Get customer feedback
 Early Access Program
     Customers download new version each month
 User feedback on discussion forum
     Direct developer-customer interaction
 Changed course midstream
     User feedback beat marketing input
 Phenomenal sales the first day of release
     Customers knew they would get what they needed
 Support Calls down by an order of magnitude
     Mental model of users and developers matched

7       October 10   Copyright©2010 Poppendieck.LLC   l e a n
Extra Features are the Biggest
 Waste in Software Development
Features / Functions Used in a Typical System                                  Cost of Complexity
       Often / Always                      Rarely / Never
        Used: 20%                           Used: 64%


                     Sometimes              Rarely 19%
                            16%




                                                                        Cost
       Often 13%


            Always 7%

                                       Never 45%


     Standish Group Study Reported at XP2002 by Jim Johnson, Chairman                 Time


        The Biggest Opportunity to Increase Software
 8
       Development Productivity is to Write Less Code!
             October 10          Copyright©2010 Poppendieck.LLC         l e a n
Simplify First – Automate Last
                                         Video Cassette Plant – early 1980’s


                                                    Pancake
                         Coat                Slit     Pancake     Wind   Package   Ship
                                                        Pancake


Chemicals      Mix


 Parts                                               Assemble


Supplies


            MRP scheduled all purchases and sent orders to each workstation
                  Reliably shipped ~ 60% of weekly plan
                  Orders filled in ~ 6 weeks
                  A lot of expediting

 9          October 10    Copyright©2010 Poppendieck.LLC   l e a n
            “If only you would try harder to do what the schedule says….”
From Push to Pull
  Crisis at our Video Cassette Plant
             Competition selling cassettes
              for less than we could make them
  Our Response
             Statistical Analysis for Quality                       Immediate Results:
              Improvement                                             95% of weekly plan
             Just-in-Time (Lean) Production                          Orders filled in 2 weeks
  The Great Coffee Cup Simulation                                     No expediting


                                                          Pancake
                           Coat                    Slit     Pancake      Wind             Package    Ship
                                                              Pancake


                                                                                          Supplies
Chemicals        Mix




  10          October 10
                                           Parts


                             Copyright©2010 Poppendieck.LLC     l e a n
                                                          Assemble
Lessons Learned
1. It’s Not Luck; It’s Hard Work
Years of Quality Improvement
      Statistical Analysis System
      QA moved to the production line
      Stop-the-Line Attitude
Months spent designing the details
      Designed by production workers
          Pre-dated Just-in-Time consultants
          Leadership through all levels of line management
          The design process WAS the training


2. Simplify First, Automate Last.
3. Consider the whole system, not just the software.
11     October 10    Copyright©2010 Poppendieck.LLC   l e a n
Optimize the Whole

Optimizing a part of a system will always
 sub-optimize the overall system.
                  Beware of Layer Teams!
                  “The” Business
                                                     F   F   F   F   F
                     Process                         e   e   e   e   e
                                                     a   a   a   a   a
                    Software                         t   t   t   t   t
                                                     u   u   u   u   u
                   Operations                        r   r   r   r   r
                                                     e   e   e   e   e
                     Support


12   October 10     Copyright©2010 Poppendieck.LLC   l e a n
Case Study: Amazon.com
It’s all about scale.
2000 – Hit the wall
2001 – Started transition to services
      Each Owned by a 2PT
          All functions – including operations!
      Encapsulate data and business logic
      Basic Services and Consolidator Services
2009 – Completed Transition.
Conway’s Law
Organizations which design systems are constrained to produce designs

13     October 10   Copyright©2010 Poppendieck.LLC   l e a n
which are copies of the communication structures of these organizations.
Cost Center Disease

Focus on cost reduction instead of delivering value.
Where is the disease most likely?
      IT departments
      Government Organizations
      Outsourcing Companies
What’s Wrong with Cost Centers?
      No way to focus on superior customer outcomes
      No basis for trade-off decisions
      No engagement
      No passion

14     October 10   Copyright©2010 Poppendieck.LLC   l e a n
Three IT Archetypes

Utility – Provide cost-effective, utility-like
  reliability with constantly declining costs.
Supplier – Deliver application projects on time
  and on budget, based on operating units’
  requirements and priorities.
Partner – Create differentiating, competitive
  solutions for the company’s customers,
  suppliers, and internal users.
Source: Forrester Research


15    October 10    Copyright©2010 Poppendieck.LLC   l e a n
Product-Centric Development
     is a Hot New Trend †

                                           *




16       October 10              Copyright©2010 Poppendieck.LLC                l e a n
 *(develop, operate, and manage your custom applications as ‘commercial’ software products)
                                                                                     †DaveWest & Roy Wildeman – Forrester, Dec. 2009
                                                                                     54% of surveyed companies favor product centric focus.
Disruptive Technologies
Stage One – Start-up                          Stage Four – Disruption
 New technology finds an unmet need            New low end product
Stage Two – Growth                                      Faster, smaller, cheaper,
 Move up-market for higher margins                      draws less power, etc.
                                                        But not good enough for
Stage Three – Flattening                                 up-market customers
 The product overshoots market needs           Enters down-market and
                                                      finds an unmet need
                                               Eventually grows up and
                                                    takes over the market


                                                   “The fact is that because of the cloud,
                                                   today a young upstart can take market
                                                   share without an incumbent having
                                                   time to react.” – Werner Vogles, Amazon.com




17    October 10
                                   Werner Vogels
                                    Amazon.com

                   Copyright©2010 Poppendieck.LLC      l e a n
Case Studies
GE Healthcare
“We realized that the biggest
impediment was that we were
selling what we were making
[rather than] making what the
customers here needed.”*



                                                                The MAC-i: EKG’s for Rs 9

                                            “Our engineering and marketing teams now interact
                                            closely with the customers here [in India] to understand
                                            their requirements. We look at their work flow, their
                                            environmental limitations, their profitability issues and
The Vscan: $8000 Ultrasound unit            other factors and we then price, design and manufacture
the size of a mobile phone. Based
on designs originating in China, it
will revolutionize global healthcare.
18       October 10           Copyright©2010 Poppendieck.LLC   l e a n
                                            the products accordingly”**      **Ashish Shah, general manager,
                                                                                    global technology, GE Healthcare

                                                                 *V. Raja, president and CEO of GE Healthcare-South Asia.
A Tale of Two Terminals
                                                        London Heathrow,
                                                        Terminal 5
                                                           300,000 sq m
                                                           $8.76 billion
                                                           7 years
                                                           Opened March 27, 2008



Beijing Capital Airport,
Terminal 3
    986,000 sq m          ~      3 times larger
    $3.80 billion         ~      Half the cost
    3.75 years            ~      Half the time
 
19
     Opened March 26, 2008
       October 10   Copyright © 2007 Poppendieck.llc   l e a n
Baggage Handling System
Beijing Capital Airport, Terminal 3                London Heathrow, Terminal 5




    19,200 bags / hour                                  Baggage handling chaos the first day
    68 km of conveyers                                  500 flights canceled
    5 min. plane to claim                               Up to 4 hour wait to claim baggage
    0.23% handling errors in 2008                       28,000 bags piled up the first weekend
Multiple operational test runs (Dec-Jan)           Workers warned management that their


20
    8,000+ mock passengers
Ran on a trial basis for a month (Feb)
        October 10                                        l e a n
                                                   training was inadequate. But the planned
                                                   full scale startup “could not be delayed”.
                       Copyright © 2007 Poppendieck.llc
Social-Technical Systems
Early 1950’s: Mechanization In The English Coal Mines*
 Mechanization broke up tightly knit teams that used to perform
  the entire extraction process from blasting to hauling to sorting.
 Different people performed the various steps on different shifts
         Caused coordination problems.
 The   equipment was so loud people could not communicate
         Inhibited teamwork.
 People felt alone, isolated, and unappreciated                    deep in the earth.
       Destroyed pride, satisfaction and belonging.
 Pay   system: from group incentive to hourly wage
         Destroyed monetary motivation.


21    October 10   Copyright © 2007 Poppendieck.llc   l e a n
The overall result: Decreased productivity and labor strife.
                                                      * Eric Trist and Fred Emery; Tavistock Institute
Principles of
      Social-Technical Systems
Technical                                          Social
 Includes:                                                Responsible Autonomy
      machinery                                           Semi-autonomous groups
      processes
                                                           Internal leader
      physical arrangement
                                                          Adaptability
 Joint optimization:
                                                           Group decides how to respond
      Social and technical systems must
       be balanced and integrated.                           to complexity and uncertainty

     Reliable processes:                                  Whole Tasks
                                                           End-to-end responsibility born
      A bad process will defeat a good
       person every time.                                    by small cohesive group

 Built-in quality:                                        Meaningful Tasks

22
      You can’t test quality in!
         October 10    Copyright © 2007 Poppendieck.llc    l e a n
                                                           Commitment; not compliance
Open Source

A New Social-Technical System?
The Impossible Public Good?
The “Tragedy of the Commons” does not apply




Defies all known social and economic theory
      Incredibly stable          No monetary rewards or sanctions

23
      Impossibly complex
        October 10    Copyright©2010 Poppendieck.LLC   l e a n
                                  No central authority in the traditional sense
Is Open                                           An Inflection
Source                                                  Point?

Motivation 2.0                          Motivation 3.0
  Extrinsic motivation                    Intrinsic motivation
  Pay for time                            Treat Workers like Volunteers
Economics 2.0                           Economics 3.0
  The key scarcity which                  The key scarcity is the time, energy &
      drives decisions is capital           brainpower of bright, creative people
Coordination 2.0                        Coordination 3.0
  Leaders direct followers                Leaders recruit followers
  No option to opt-out                    There is always an option to opt-out
Passion 2.0                             Passion 3.0
  Winning the Game
 24      October 10   Copyright©2010 Poppendieck.LLC   l e a n
                                           First of all, I need to know Why?
The Future Belongs to You

 Motivation 3.0                               Economics 3.0
 Autonomy                                     The new scarcity:
 Mastery                                      The time, energy and brainpower
 Purpose                                              of bright, creative people.


                                                      Passion 3.0
Coordination 3.0                                      Start with the Why.
 Leaders attract followers.                           Invest your time and
 Wisdom is found at the worksite.                     energy in your passion.


 You are the core of the new economy.
       You can change the world.
25   October 10   Copyright©2010 Poppendieck.LLC   l e a n
lsoftware development
                                   e a n
                       Thank You!
             More Information: www.poppendieck.com

mary@poppendieck.com     Mary Poppendieck      www.poppendieck.com

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Mary Poppendieck “It’s Not About Software”

  • 1. lsoftware development e a n It’s Not About Working Software First Build the Right Thing mary@poppendieck.com Mary Poppendieck www.poppendieck.com
  • 2. Gróf András (Andrew Grove) Business goes on to new heights Strategic Inflection Point 10x change in an element of the business. What worked before doesn’t work now. The executives are the last to know. Business declines 2 October 10 Copyright©2010 Poppendieck.LLC l e a n From: Only the Paranoid Survive, by Andy Grove,
  • 3. Is Agile Development At An Inflection Point? Version 1.0 – Contract Focus Version 2.0 – Development Focus Version 3.0* - Customer Focus  Processes and tools  Individuals and  Team vision and  Comprehensive interactions initiative documentation  Working software  Validated learning  Contract negotiation  Customer collaboration  Customer discovery  Following a plan  Responding to change  Initiating Change Inflection Point: Customer Focus 1995 2000 2005 2010 3 October 10 l e a n *Kent Beck, Startup Lessons Learned – April 23, 2010 Copyright©2010 Poppendieck.LLC http://www.justin.tv/startuplessonslearned/b/262656520
  • 4. Team Vision and Initiative There is nothing so useless as doing efficiently that which should not be done at all. – Peter Durcker Most products failures are caused by a lack of Customers. Not this: But this: P R I O R I T I Z E D l e a n ! 4 October 10 Copyright©2010 Poppendieck.LLC
  • 5. Validated Learning Consider the Entrepreneur – The Objective: Starts out with no customers Minimum Viable Product  Does it do the job? Assembles a business team:  Will customers pay for it?  Marketing  What do we need to learn next?  Development Repeat......multiple times  Quality Assurance  Experiment – Learn – Adjust  Operations First be sure that you are  Support building the right thing,  Finance then be sure that you are  Others? building the thing right. 5 October 10 Copyright©2010 Poppendieck.LLC l e a n
  • 6. Customer Discovery Ethnography Ideation Brilliant Systems are the result of a matching of mental models between those developing a system and those who will be using the system. 6 October 10 Copyright©2010 Poppendieck.LLC l e a n
  • 7. Initiating Change WebSphere® Service Registry and Repository  10 month deadline – didn’t know the details  Solution: Get customer feedback  Early Access Program  Customers download new version each month  User feedback on discussion forum  Direct developer-customer interaction  Changed course midstream  User feedback beat marketing input  Phenomenal sales the first day of release  Customers knew they would get what they needed  Support Calls down by an order of magnitude  Mental model of users and developers matched 7 October 10 Copyright©2010 Poppendieck.LLC l e a n
  • 8. Extra Features are the Biggest Waste in Software Development Features / Functions Used in a Typical System Cost of Complexity Often / Always Rarely / Never Used: 20% Used: 64% Sometimes Rarely 19% 16% Cost Often 13% Always 7% Never 45% Standish Group Study Reported at XP2002 by Jim Johnson, Chairman Time The Biggest Opportunity to Increase Software 8 Development Productivity is to Write Less Code! October 10 Copyright©2010 Poppendieck.LLC l e a n
  • 9. Simplify First – Automate Last Video Cassette Plant – early 1980’s Pancake Coat Slit Pancake Wind Package Ship Pancake Chemicals Mix Parts Assemble Supplies MRP scheduled all purchases and sent orders to each workstation  Reliably shipped ~ 60% of weekly plan  Orders filled in ~ 6 weeks  A lot of expediting 9 October 10 Copyright©2010 Poppendieck.LLC l e a n “If only you would try harder to do what the schedule says….”
  • 10. From Push to Pull Crisis at our Video Cassette Plant  Competition selling cassettes for less than we could make them Our Response  Statistical Analysis for Quality Immediate Results: Improvement  95% of weekly plan  Just-in-Time (Lean) Production  Orders filled in 2 weeks The Great Coffee Cup Simulation  No expediting Pancake Coat Slit Pancake Wind Package Ship Pancake Supplies Chemicals Mix 10 October 10 Parts Copyright©2010 Poppendieck.LLC l e a n Assemble
  • 11. Lessons Learned 1. It’s Not Luck; It’s Hard Work Years of Quality Improvement  Statistical Analysis System  QA moved to the production line  Stop-the-Line Attitude Months spent designing the details  Designed by production workers  Pre-dated Just-in-Time consultants  Leadership through all levels of line management  The design process WAS the training 2. Simplify First, Automate Last. 3. Consider the whole system, not just the software. 11 October 10 Copyright©2010 Poppendieck.LLC l e a n
  • 12. Optimize the Whole Optimizing a part of a system will always sub-optimize the overall system. Beware of Layer Teams! “The” Business F F F F F Process e e e e e a a a a a Software t t t t t u u u u u Operations r r r r r e e e e e Support 12 October 10 Copyright©2010 Poppendieck.LLC l e a n
  • 13. Case Study: Amazon.com It’s all about scale. 2000 – Hit the wall 2001 – Started transition to services  Each Owned by a 2PT  All functions – including operations!  Encapsulate data and business logic  Basic Services and Consolidator Services 2009 – Completed Transition. Conway’s Law Organizations which design systems are constrained to produce designs 13 October 10 Copyright©2010 Poppendieck.LLC l e a n which are copies of the communication structures of these organizations.
  • 14. Cost Center Disease Focus on cost reduction instead of delivering value. Where is the disease most likely?  IT departments  Government Organizations  Outsourcing Companies What’s Wrong with Cost Centers?  No way to focus on superior customer outcomes  No basis for trade-off decisions  No engagement  No passion 14 October 10 Copyright©2010 Poppendieck.LLC l e a n
  • 15. Three IT Archetypes Utility – Provide cost-effective, utility-like reliability with constantly declining costs. Supplier – Deliver application projects on time and on budget, based on operating units’ requirements and priorities. Partner – Create differentiating, competitive solutions for the company’s customers, suppliers, and internal users. Source: Forrester Research 15 October 10 Copyright©2010 Poppendieck.LLC l e a n
  • 16. Product-Centric Development is a Hot New Trend † * 16 October 10 Copyright©2010 Poppendieck.LLC l e a n *(develop, operate, and manage your custom applications as ‘commercial’ software products) †DaveWest & Roy Wildeman – Forrester, Dec. 2009 54% of surveyed companies favor product centric focus.
  • 17. Disruptive Technologies Stage One – Start-up Stage Four – Disruption  New technology finds an unmet need  New low end product Stage Two – Growth  Faster, smaller, cheaper,  Move up-market for higher margins draws less power, etc.  But not good enough for Stage Three – Flattening up-market customers  The product overshoots market needs  Enters down-market and finds an unmet need  Eventually grows up and takes over the market “The fact is that because of the cloud, today a young upstart can take market share without an incumbent having time to react.” – Werner Vogles, Amazon.com 17 October 10 Werner Vogels Amazon.com Copyright©2010 Poppendieck.LLC l e a n
  • 18. Case Studies GE Healthcare “We realized that the biggest impediment was that we were selling what we were making [rather than] making what the customers here needed.”* The MAC-i: EKG’s for Rs 9 “Our engineering and marketing teams now interact closely with the customers here [in India] to understand their requirements. We look at their work flow, their environmental limitations, their profitability issues and The Vscan: $8000 Ultrasound unit other factors and we then price, design and manufacture the size of a mobile phone. Based on designs originating in China, it will revolutionize global healthcare. 18 October 10 Copyright©2010 Poppendieck.LLC l e a n the products accordingly”** **Ashish Shah, general manager, global technology, GE Healthcare *V. Raja, president and CEO of GE Healthcare-South Asia.
  • 19. A Tale of Two Terminals London Heathrow, Terminal 5  300,000 sq m  $8.76 billion  7 years  Opened March 27, 2008 Beijing Capital Airport, Terminal 3  986,000 sq m ~ 3 times larger  $3.80 billion ~ Half the cost  3.75 years ~ Half the time  19 Opened March 26, 2008 October 10 Copyright © 2007 Poppendieck.llc l e a n
  • 20. Baggage Handling System Beijing Capital Airport, Terminal 3 London Heathrow, Terminal 5  19,200 bags / hour  Baggage handling chaos the first day  68 km of conveyers  500 flights canceled  5 min. plane to claim  Up to 4 hour wait to claim baggage  0.23% handling errors in 2008  28,000 bags piled up the first weekend Multiple operational test runs (Dec-Jan) Workers warned management that their 20  8,000+ mock passengers Ran on a trial basis for a month (Feb) October 10 l e a n training was inadequate. But the planned full scale startup “could not be delayed”. Copyright © 2007 Poppendieck.llc
  • 21. Social-Technical Systems Early 1950’s: Mechanization In The English Coal Mines*  Mechanization broke up tightly knit teams that used to perform the entire extraction process from blasting to hauling to sorting.  Different people performed the various steps on different shifts  Caused coordination problems.  The equipment was so loud people could not communicate  Inhibited teamwork.  People felt alone, isolated, and unappreciated deep in the earth.  Destroyed pride, satisfaction and belonging.  Pay system: from group incentive to hourly wage  Destroyed monetary motivation. 21 October 10 Copyright © 2007 Poppendieck.llc l e a n The overall result: Decreased productivity and labor strife. * Eric Trist and Fred Emery; Tavistock Institute
  • 22. Principles of Social-Technical Systems Technical Social Includes: Responsible Autonomy  machinery  Semi-autonomous groups  processes  Internal leader  physical arrangement Adaptability Joint optimization:  Group decides how to respond  Social and technical systems must be balanced and integrated. to complexity and uncertainty Reliable processes: Whole Tasks  End-to-end responsibility born  A bad process will defeat a good person every time. by small cohesive group Built-in quality: Meaningful Tasks 22  You can’t test quality in! October 10 Copyright © 2007 Poppendieck.llc l e a n  Commitment; not compliance
  • 23. Open Source A New Social-Technical System? The Impossible Public Good? The “Tragedy of the Commons” does not apply Defies all known social and economic theory  Incredibly stable  No monetary rewards or sanctions 23  Impossibly complex October 10 Copyright©2010 Poppendieck.LLC l e a n  No central authority in the traditional sense
  • 24. Is Open An Inflection Source Point? Motivation 2.0 Motivation 3.0  Extrinsic motivation  Intrinsic motivation  Pay for time  Treat Workers like Volunteers Economics 2.0 Economics 3.0  The key scarcity which  The key scarcity is the time, energy & drives decisions is capital brainpower of bright, creative people Coordination 2.0 Coordination 3.0  Leaders direct followers  Leaders recruit followers  No option to opt-out  There is always an option to opt-out Passion 2.0 Passion 3.0  Winning the Game 24 October 10 Copyright©2010 Poppendieck.LLC l e a n  First of all, I need to know Why?
  • 25. The Future Belongs to You Motivation 3.0 Economics 3.0 Autonomy The new scarcity: Mastery The time, energy and brainpower Purpose of bright, creative people. Passion 3.0 Coordination 3.0 Start with the Why. Leaders attract followers. Invest your time and Wisdom is found at the worksite. energy in your passion. You are the core of the new economy. You can change the world. 25 October 10 Copyright©2010 Poppendieck.LLC l e a n
  • 26. lsoftware development e a n Thank You! More Information: www.poppendieck.com mary@poppendieck.com Mary Poppendieck www.poppendieck.com