If you want to know what is Kanban, in this article we accompany you in an immersion in the Kanban Method or Kanban Methodology. In a previous article we already introduced you to the origins of Kanban, its benefits and we answered some key questions people usually have. Now, it is time for a deep dive!
Introduction to the Kanban Method
What is Kanban?
Kanban is a method for defining, managing and improving services delivering knowledge work, such as professional services, creative industries and software products.
The method is based on the concept of a Kanban System – a delivery flow system that controls the amount of work in progress using visual signals.
The visual signals are known as kanbans. They regulate the amount of work entering the system based on system capacity, thereby improving the flow of value to customers. The kanbans, and the policies associated with them, create a pull system, where work is “pulled” into the system when other work is completed, rather than “pushed” when new work is requested.
The focus of Kanban is the delivery of services by an organization. A service has a customer, who requests the work or whose needs are identified, and who accepts or acknowledges delivery of the completed work.
Kanban methodology is ment for improving service delivery, or for increasing agility of your service delivery organization, but it is also a change management approach that drives organizational change and improvement in an evolutionary way with minimum disruption and with maximum consideration for human beings.
Hence, there exist six foundational principles of Kanban divided into two groups: the change management principles and the service delivery principles.
The three change management principles of Kanban are
- Start with what you do now
- understanding current processes, as actually practiced
- respecting existing roles, responsibilities, and job titles
- Agree to pursue improvement through evolutionary change
- Encourage acts of leadership at every level, from individual contributor to senior management
The three service delivery principles of Kanban are
- Understand and focus on your customers’ needs and expectations
- Manage the work; let people self-organize around it
- Your organization is an ecosystem of interdependent services, steered by its policies; reflect regularly on their effectiveness and improve them.
Understanding what these six principles try to convey and how to apply it to practice is key to succeeding with Kanban. These principles form what we call the Kanban Lens, that is how Kanban practioners understand service delivery organizations and how we go about introducing change in these organizations.
The Principles of the Kanban Method are designed to set the foundation for continuous improvement. The improvements are not designed in advance they are emergent behavior, and the outcome cannot be predicted. That might sound scary or irrational, but this is how change works in real life and, based on our experience, Kanban is very good at improving service delivery agility.
The only thing we know is that everything will change. As such, the Kanban Method is a systems thinking approach to driving change in organizations. To effectively work with Complex Systems you must set a few initial starting conditions and use simple rules to stimulate emergent behavior, identify goals and measures to track progress and steer as required.
The simple rules are embedded in the Six Core Properties of Kanban and the starting conditions are represented in the Six Foundational Principles of Kanban.
The Kanban Lens
A key difference between Kanban methodology and Agile/Scrum is that it understands an organization as an interconnected set of services that can be improved. So, what Kanban needs is that we learn to view what we do now as such:
- What to look for:
- Creative work is service-oriented
- Service delivery involves workflow
- Workflow involves a series of knowledge discovery activities
- What to do:
- Map the knowledge discovery workflow
- Pay attention to how & why work arrives
- Track work flowing through the service
A service can be something as simple as a team, or it can be several teams coordinating to deliver value to a customer, it can be a portfolio of projects or it can be a virtual aggregation of functional teams in virtual product teams.
Implementing Service Delivery Kanban
If we look at the core Kanban practices with our Kanban Lens on, we can define the following six practices to improve service delivery agility across the organization:
- Visualize service delivery workflows
- Implement virtual kanban systems
- Manage flow within & across workflows
- Make your decision framework, risk management policies & boundaries of empowerment explicit
- Implement the Kanban Cadences
- Improve collaboratively, evolve experimentally
Service Delivery Agility
I tend to believe that business owners and executives don’t care about Agile or agility. They just want to grow, lead their markets and make more money.
To help business owners and executives achieve their goals we should clearly convey the benefits of full kanban systems:
- Shorter Lead Times (typically more than 50%)
- Increased Delivery Rate (typically more than 50%)
- Increased employee morale and engagement
- Improved trust with stakeholders and customers
- Reduced disruptions
- Measurable benefits
In order to achieve those benefits, Kanban Systems enable your organization to manage three levers to determine your level of Service Delivery Agility. Those levers are:
- Commitment frequency
- Lead Time (Time-to-market)
- Delivery Frequency
What you have to do is, first of all, you must define value from the eyes of the customer and identify the service that must deliver that value, then you must align all effort to achieve the required level of delivery agility.
Underpinning Kanban there is a solid values foundation. It is motivated by the belief that respecting all the individuals that contribute to an organization is necessary (this is actually one of the pillars of Lean – Respect for People).
Kanban’s values could be summarized in a single word: “respect”. However, Kanban expands this into the set of nine values that encapsulate why the principles and practices of Kanban exist:
- Transparency: the belief that sharing information openly improves the flow of value.
- Balance: the understanding that different aspects, viewpoints and capabilities must be balanced with each other for effectiveness. Some aspects (such as demand and capacity) will cause breakdown if they are out of balance for an extended period.
- Collaboration: the Kanban method was formulated to improve the way people work together, so collaboration is at its heart.
- Customer Focus: it is required that you understand what makes your service fit for purpose. That becomes the goal of the Kanban System, to improve flow to deliver value to your customer as fast as possible with best quality and safety.
- Flow: Seeing flow is an essential starting point in the use of Kanban that will help us in seeing where flow is slower or even blocked.
- Leadership: the ability to inspire others to action through example, words and reflection. Leadership is needed in Kanban at all levels to achieve value delivery and improvement.
- Understanding: understanding where you are and what does it look like it is key to improvement. Kanban is an improvement method, and knowledge of one’s starting point is foundational.
- Agreement: the commitment to move together towards goals, respecting and where possible accommodating differences of opinion or approach.
- Respect: it is the foundation on which the other values rest. Valuing, understanding and showing consideration for people, but not only in our behaviour but not forcing people to do wasteful work or useless meetings.
These values symbolyze the essence of Kanban methodology in pursuing service delivery improvement. The method cannot be truly applied without embracing them.
There are no hidden agendas in Kanban. We know what it can do for organizations and we are explicit about it.
Real adoption of the Kanban Method provides sustainability, improved service delivery, and the capability to adapt, survive and thrive in a complex environment. Kanban consultants and coaches are explicit about their agendas. Hence, there exist three agendas in Kanban:
Each agenda tackles different levels of motivation by management in organizations:
- Senior Level is all about survivability of themselves, the company and their status.
- Mid-level is concerned mostly about being able to provide predictability and answers upwards and make difficult decisions downwards. That’s why service orientation helps a lot here
- Line-management and individual contributors are worried about overburden, changing priorities, useless meetings and stress. That’s why they care about sustainability.
The sustainability agenda is driven mainly by the concept of limiting work-in-progress. However, there is a bigger theme, the promise of relief from an abusive environment and the opportunity to do good quality work.
It is also the challenge of balancing demand against capability and it introduces the need for demand shaping through capacity allocation in the Kanban System and a focus on reducing non-value-added demand such as failure demand or requests for information about future speculative work or other damaging forms of demand such as unpredictable, disruptive expediting.
With Kanban you will reduce overburden, reduce wasteful work, smooth the flow of work and achieve a sustainable pace with quality and safety. That’s what sustainability is about.
Kanban Systems help us improve service delivery by reducing variability and improving predictability and lead times. You can achieve that by understanding that an organization is an eco-system of interconnected services. Because, Kanban doesn’t share the Agile cross-functional team agenda.
In order to understand what service you provide, you need to answer the following questions:
- Who are our customers?
- What do they ask us for?
- What do you do to those requests?
- Where does the finished work go to?
You implement a Kanban System for each service, regardless if it is several people or several teams.
There are two aspects of Kanban that drive survivability of the business. First, it has a focus on defining value from the eyes of the customer and making sure we understand the fitness criteria by which customers select our services; second, it implements a whole set of cadences at different levels which connect all the organization all the way down from strategy to operations and up again with improvements.
The Kanban Method’s feedback loops and model-driven improvement provide an adaptive capability. Therefore, the adaptive capability and the fitness evaluation give a business the capability to survive and thrive even in the presence of a rapidly changing external environment.
Core Kanban Practices
Kanban methodology is based in six core practices to create an emergent set of positive behaviors in organizations and achieve an improved service delivery agility. These practices need to be relentlessly applied, reviewed and improved.
A Kanban Board such as in the image above is a typical way to visualize work and the process it goes through. For it to be a Kanban System rather than simply a board with stickers, the commitment and delivery points must be defined, and visual signals (kanbans) must be visible to limit the work in progress at each stage between these points and implement pull.
The act of making work and policies visible is an important journey of collaboration to understand the current system and find potential areas for improvement.
Policies too are important to visualize, for example by placing summaries between columns of the what must be done before items move from one column to the next.
Board Design depends on the context, but there are some very common traits among all the Kanban Systems we have ever help design. The columns represent steps in a process, and some of the columns have horizontal partitions (called swimlanes, if they cross two or more columns) to distinguish states of items within the steps.
Design of the card or panel that describes the work item is another important aspect of visualization. It is also vital to highlight visually when items are blocked by dependencies on other services or for other reasons.
Just a few things you must visualize for a proper Kanban System:
- Kanban System
- Commitment Point and Delivery Point
- Definition of Ready (Commitment Point), Definition of Done (Delivery Point) and policies between columns
- Design of work item types
- Process Steps / Activities
- In Progress vs Done States within process steps
- WIP Limits per column (process step)
- WIP Limits per swimlane (Classes of Service)
- Blockers Policy
- Classes of Service (CoS)
- Service Delivery Agility
- SLA: Lead Time per Work Item Type or CoS, Throughput per Work Item Time or CoS, Predictability
- Cumulative Flow Diagram
- Lead Time Histogram and Evolution
- Throughput Histogram and Evolution
- Lead Time Scatterplot
Limit work in progress
Introducing WIP limits is required if you want to have a PULL system and really benefit from Kanban, otherwise you are just playing around with stickers and pretending. Too much work in progress is wasteful, expensive, increases time-to-market, reduces quality and makes your system unpredictable, preventing the organization from being responsive to changing circumstances and opportunities.
Observing, limiting and then optimizing the amount of work in progress is essential to success with Kanban, as it results in improved lead time for services, improved quality and a higher rate of deliveries.
However, ineffective management behavior focuses on maximizing usage of people and resources (resource efficiency), by trying to ensure that everyone is “busy” with a ready supply of work so that no idle time occurs. As a result people may feel overwhelmed and lose sight of the service they provide and how it contributes to the overall goals of the organization and its customers. This widespread situation elicits demotivation, disengagement and stress.
In Kanban we are obsessed about flow. We want work to flow as fast as possible to the customer with maximum quality and safety. This is an inheritance from Lean. We don’t manage people, we manage the system to enable rapid flow.
We must always keep an eye on queues, blockers and dependencies and make sure there are plenty of visual controls to warn us when something goes awry.
The relationship with the consumers of the service is a key aspect of managing flow. Different service levels may be defined for Kanban Systems to guide this:
- Service Level Expectation: what the customer expects
- Service Level Capability: what the system can deliver
- Service Level Agreement: what is agreed with a customer
- Service Fitness Threshold: the service level below which the service delivery is unacceptable to the customer.
Make policies explicit
Regardless of the Kanban practice itself, in our experience, making things explicit is a key difference between high-performing organizations and teams and mediocre or poor ones. This is why we emphasize the importance of this practice, perhaps, among all others.
Humans tend to have a lot of assumptions and we cannot let assumptions and opinions drive businesses. There are also discrepancies between organization’s strategy and goals and what is really happening. So, we need to make sure all decisions, processes, criteria and data are explicit and visible to everyone.
Explicit policies constrains action and results in emergent behaviors that can be improved by experiment. Policies need to be simple, well-defined, visible, always applied, and readily changeable by those providing the service.
Whenever a policy is not being applied there is an opportunity for improvement, that wouldn’t have happened if you wouldn’t have made it explicit.
WiP Limits are one type of policy. Others include capacity allocation and balancing, the “Definition of Done” or other policies for work items exiting stages of a process, and replenishment policies for the selection of new work when capacity is available. The use of classes of service is another policy example.
Needless to say, all policies must be visible!
Implement feedback loops
Also known as Kanban Cadences, feedback loops are an essential part of any process and specially important for evolutionary change. Improving feedback in all areas of the process and levels of the company is important.
Kanban defines seven specific feedback loops, or cadences. Cadences are the cyclical reviews that drive continuous improvement and effective service delivery. The seven cadences are shown in the section below with suggested frequencies for the reviews in typical systems:
- Strategy Review: Are we in the business we want to be in? Do we have the capability to be in that business? Are our goals achievable? Should we review our strategy based on competitive pressures or technology trends?
- Operations Review: understanding the balance between and across Kanban services, deploying resources to maximise the delivery of value to customers’ expectations
- Risk Review: for understanding risks to effective delivery of services
- Service Delivery Review: examining and improving the effectiveness of a service
- Replenishment Meeting: for pulling items through the commitment point, and overseeing the preparation of options for selection in the future
- The Kanban Meeting: AKA Daily Planning Meeting, this is the daily coordination, self-organization and planning review for the members of the service
- Delivery Planning Meeting: monitoring and planning deliveries to customers
Implementing the seven cadences does not mean adding seven new meetings to an organization’s overhead. Instead the reviews and meetings should initially be part of existing meetings and adapted in context to fulfil their goals. At smaller scale, a single meeting may cover more that one of the cadences.
Actually, in our experience, implementing Kanban across services and the seven feedback loops drastically reduces the total amount of meetings held at the organization, particularly those meetings required to request for information, updates or speculation about the future.
Improve collaboratively, evolve experimentally
Kanban is basically an improvement method. Kanban starts from the organization as it is now and uses the emergent behaviors and signals from the Kanban System to continuously improve.
This evolutionary process involves: copying with differences; selecting for fitness; keeping and amplifying useful change while rejecting ineffective change.
We strongly recommend the use of models and the scientific method to design and test improvement experiments.
For an organization to work properly it is essential that our level of thrust never slows down. Kanban methodology establishes seven work cycles that allow to keep the plan alive and drive evolutionary change.
We want to connect strategy with our daily operations and we also want to react quickly to market changes. So it is vital to be able to change plans, if necessary and circumstances force us.
Every decision that has to be made, every information that must be shared has a place and a moment. We must reduce the amount of ad-hoc meetings. If you implement Kanban Cadences you will no longer need ad-hoc meetings after a few months.
We want adhoc meetings to be progressively reduced and everyone knows there exists a meeting for every different need. We seek to maintain a constant and sustainable flow of work from the annual strategy to the day to day.
That is why Kanban proposes three types of feedback loops:
- Doing the right things:
- Strategy Review
- Replenishment Meeting
- Doing things better:
- Operations Review
- Risk Review
- Service Delivery Review
- Getting things done:
- Kanban Meeting
- Delivery Planning Meeting
A quarterly meeting to review and assess our:
- alignment of strategy & capability
- current markets
- strategic position
- go-to-market strategies
Attended by senior executives, product leaders, sales, marketing, portfolio management, risk management, service delivery and customer care.
This is a monthly disciplined review of demand and capability at scale with a particular focus on dependencies and dependent effects. It is use to reflect on quantitative objective performance measures.
It provides system of systems view and understanding as everybody brings updated performance data and dependencies from their services.
- Summary findings from Service Delivery Reviews of all Kanban Systems
- Business performance information from Strategy Review.
- A list of improvements, decisions, actions, suggestions or required changes to strategy with designated owners sent to Service Delivery Review and Strategy Review.
- Look at dependencies between Kanban Systems, understand them and expose impacts associated within them.
- Kaizen events suggested by attendees
- Improvement opportunities assigned
Service Delivery Review
Bi-weekly meeting where we look at whether we are delivering according to customer expectations. We look at a single Kanban System, we compare current capabilities against fitness criteria metrics and seek to balance demand against capability.
- System performance
- Progress and data from the Kanban meeting
- Decisions from Operations Review, actions from Risk Review.
- Findings reported at Operations Review.
- Capability to deliver against each class of service
- Cycle time distribution
- Request rate, variability, immediacy, expectations
- Flow efficiency
- Delay risks (from blockers) – likelihood and impact
- Due date performance
- Class of service separation – determine if current set is still valid and if extra classes are needed.
The purpose of this cadence is to review the parameters for managing risk as well as reviewing those problems that put our delivery capability at risk.
This happens in a monthly cadence apart from Operations Review and we review classes of service, blockers, risk management policies and demand shaping policies.
This is a meeting for moving items over the commitment point, and overseeing the preparation of options for selection in the future. It can happen on demand or within a specific frequency.
Every service will design their own meeting, but a typical agenda would look like as follows:
- Walkthrough any new submissions
- Ensure class of service and/or work item type has been correctly assigned
- How many Kanban slots are available for each class of service?
- Gain an initial list of candidates for selection
- Ask stakeholders to select shortlist based on initial filtering
- Select next items
This is the daily planning meeting where teams take a look at the status of the Kanban board and define the plan for the day.
It is important to mention that this meeting is pretty different from the Daily Scrum. The focus of the Kanban Meeting is on the flow. So, we start by reading the board from right to left, stopping at blocked items and making sure everybody is working to move things out of the system as fast as possible.
Once we get to the leftmost side of the board we check if there are available slots for pulling more work.
Delivery Planning Meeting
This meeting is held per delivery cadence and its purpose is to plan downstream delivery and create a delivery manifest. Unless the service is end-to-end, there is usually someone who is taking care of the work after delivery, so we need to plan accordingly.
- Which items are or will be ready for release?
- What is required to actually release into production?
- What testing will be required post-release to validate the integrity of the production system?
- What release risks are there? How are they being mitigated?
- What contingency plans are required?
- Who needs to be involved in the release?
- How long will the release take?
- What other logistics will be involved?
Understanding Kanban Systems
Well, now that we have seen the main components of the Kanban Method, let’s take a look at how Kanban Systems actually work!
In the following figure we can see a basic Kanban board, representing the simplest version of a Kanban System. There are several important things missing, that we will see later. But, let’s talk about what we have here first.
First thing we must mention is that in a virtual Kanban System “kanbans” are represented by empty slots. The signals that triggers a pull event is an empty slot based on the WIP limit of the column. This is usually one of the misconceptions with Kanban, thinking that the stickers are the “kanbans” whilst the stickers are work items, and the “kanbans” or signals are the empty slots.
The Kanban System is defined by an entry point and an exit point, represented in this board by the Commitment Point and Delivery Point. Within this limits it is full responsibility of the team/service members. Outside its boundaries, it might be needed to keep track of what is going on, but it is no longer their responsibility. If we want we can always link two disconnected processes by means of a bigger Kanban System embracing several teams.
Within the limits of the Kanban System is where we can measure three of the basic performance metrics:
- Lead Time
- Throughput (Delivery Rate)
- Work in Progress
As you can see, columns in side the Kanban System are divided into “In Progress” and “Done”. This is done to explicitly indicate the status of a piece of work. A work item within the system can only be in three states: in progress, done or blocked. What I don’t like is to put a buffer after a column to indicate that the item is done waiting to be pulled, because that is no longer a pull system and might provoke the wrong behavior. You can also indicate visually with a sticker on top of the work item its status.
Advanced Kanban Board
In the following board we have made several improvements.
On the left hand side, outside the board, you can see the policies for the three work item types for this system and below additional policies like long-term blockers, replenishment frequency or kanban meeting script.
You can see that we added swimlanes for classes of service. In this case, a class of service is mapped to one of the OKRs for the quarter. Each class of service has an allocated capacity based on its importance. In this case, for example, OKR #1 is of greater importance and is getting 45% of system’s capacity.
You can also see at the bottom of the board, that we incorporated a space for discarded items and for long-term blockers. It is important to track those items and make sure we write down the reasons for discarding and the causes of long-term blockers. This will help us in improving our service delivery.
On the right hand side, outside of the board, we have added the performance board for the system, where you might find: SLAs for different work item types and/or classes or service, a cumulative flow diagram and lead time histogram. Below, you can also find the OKRs for the quarter for this service.
On the top of the board, in between columns in lighter blue, you can also find the Ready to Pull policies and Definition of Done policy at the end.