Five Very Important Numbers And How They Can Help Improve Your Knowledge-Work Organization

This session will be about five numerical characteristics of a process.  (Call them "metrics", but beware we will be discussing only those that are difficult to game.)  I chose five of them that are not often discussed,  rarely measured, and even less frequently used in making decisions.

This happens partly because of inertia.  In the better-studied world of manufacturing physical products and services, for example, one of these quantities approaches 100%, another one is almost always (ideally) zero, and yet another one is a single number rather than a statistical distribution.  You don't even have to think about them.  But when the customer value is created in the brains of intellectual workers rather than on the assembly line, the five quantities we will be discussing reveal non-trivial insights.

We will discuss what you can do to measure them when you return to your office on Wednesday.  We will also discuss how you can practially use the new knowledge, starting on Thursday, to find new leverage for improvement, find time for work that is important, but not urgent, balance capabilities of your organization with the demand placed upon it, deal with uncertainty, and forecast the delivery of your projects and other commitments.

 

 
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Outline/structure of the Session

The five numbers the session is about (the abstract is written to maintain some intrigue): flow efficiency, arrival rate, option discard rate, utilization, and lead time.  I plan a short segment about each.  Each segment will include some presentation, a 2-3-minute discussion by participants (at their roundtables or with their neighbors, if they're seated in the theater format), and examples.

Discussion points:

  • on flow efficiency - how to measure it (actually tracking time is the most obvious, but ineffective way)
  • on arrival rate - what can we do to balance capability and demand?
  • on utilization - 20% time anyone?
  • on lead time - is your company using the probabilistic or deterministic approach?

 

 

Learning Outcome

About flow efficiency:

  • what it is
  • how low it is in the software industry, IT and other creative industries
  • how to measure it (actually tracking time is the most obvious, but ineffective way) - this is a great discussion item
  • what decisions it can inform: where is the leverage for improvement, choosing a (T-shirt) sizing scale, validity of lead time data, etc.

About arrival rate:

  • look not only at how many user stories in the backlog or bugs in the bug tracker, but how fast they arrive
  • if they arrive faster than we can deliver, that's unsustainable
  • need to balance demand and capability - what are the options? - this is another discussion item
  • short story of a software engineering manager whose group faced fragmented demand - different sources of it with different arrival rates and patterns.  They didn't realize it.
  • for those practicing Kanban: demand analysis is one of the essential acitivities
  • handout: simple demand analysis sheet

About option discard rate:

  • segue from the previous segment - backlog as a pool of options and some of them will be discarded
  • options have value because the future is uncertain
  • innovative companies facing a lot of uncertainty need create lots of options.  Their discard rates may be very high (Example: 90%)
  • companies in more stable environments likely to have much smaller ratios

About utilization:

  • how high utilization leads to long delays
  • the importance of less than 100% utilization
  • 80% utilization doesn't mean doing nothing in the other 20% - discuss what you can do in the 20%

About lead time:

  • customer lead time vs. system lead time vs. cycle time - why
  • why it is hard to game - connect to flow efficiency
  • how long will it take? when do we need it? when should we start? - the probabilistic approach and lead time data enable decisions
  • many insights about lead time from recent research that are useful in forecating projects and deliveries
  • is your company using the probabilistic or deterministic approach - discussion point
  • most companies already have their lead time data, but never use them
  • examples of typical lead time distribution histograms - from agile and not-so-agile software teams and operations and support-type work (yes they have distinct shapes)

 

Target Audience

line and managers, senior individual contributors, coaches, improvement consultants, C-level executives

schedule Submitted 3 years ago

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  • George Dinwiddie
    By George Dinwiddie  ~  2 years ago
    reply Reply

    Morning Alexei,

    Given your response, we are happy to extend the deadline for you until the end of the week 9/12/14, if that helps you figure out your scheduling.

    No issue with respect to presenting the alternate proposal.

    Regards, 

    Phillip and George

    on behalf of the AgileDC organizing committee

     

  • George Dinwiddie
    By George Dinwiddie  ~  2 years ago
    reply Reply

    Good afternoon Alexei,

    We have not yet received a response from you with respect to the invitation to present at AgileDC next month.  Please RSVP to the invitation sent on August 29th, or alternately via email that “I AM IN” and specify the session you wish to present, to SPEAKERS@AGILEDC.ORG  by 11:59PM Sunday, September  7th, 2014 .  If we do not hear from you we will have to forfeit or your spot.

    Have a great weekend!  

    Best,

     

    George Dinwiddie and Phillip Manketo

     

    for the AgileDC organizing committee

    • Alexei Zheglov
      By Alexei Zheglov  ~  2 years ago
      reply Reply

      Hello George and Phillip,

      Thank you very much for the acceptance (which I noted right away) and this reminder.  I didn't forget about it, but I'm still waiting for some information (unrelated to the conference) to make a decision.  I'll be sure to decide before tomorrow night.  Between the two proposals, I'd rather present the more focused session about lead time and drop the broader-but-shallower "five numbers."  

      Have a good weekend, too!


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