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Lean Thinking Applied for Organizational Change

Lean methods can be used to solve problems in organizations. "In lean, we co-design and continuously improve processes and tools to better serve individuals and interactions" said Claudio Perrone. Lean views problems as a gap between the current situation and a standard or expectation.

Claudio talked about A3 Thinking (a management approach originated from Toyota) and Popcorn Flow (a new lean change method) at the Lean Kanban Central Europe 2014 Conference. The slides of his presentation are available on-line: Evolve or die: A3 thinking and popcorn flow in action.

When an organization adopts agile often only the lowest level in the organization changes by implementing teams and scrum masters, the rest stays the same said Claudio. Scrum masters can be considered to “oil” their teams and help them to do their work. What if all management layers would adopt the same idea, where people on each level put “oil” to serve the people that they are managing? It could be viewed as turning the pyramid upside down, putting the workforce at the top.

Claudio describes an approach to coaching where mentors challenge a problem solver’s line of thought using quick coaching cycles. Mentors would ask questions like “what do mean by this?”, “can you give and example?” or “did you see any evidence?”. Questions make you think said Claudio.

InfoQ interviewed Claudio about problem solving and learning, and on tools that can be used to apply lean thinking for change in organizations.

InfoQ: You stated in your talk that “we are victims of a systems, of what we have learned at management school”. Can you elaborate what you mean with this?

Claudio: I regularly talk to senior managers who just rely on autocratic leadership to ensure that their people get things done. They measure their success by the size of their budget and/or the number of people reporting to them. 

This approach might have worked in the past, but companies can't thrive in the creative economy if their workforce is filled with resource-hungry collectors and obedient followers.

In my talk, I emphasised that this is the style most of us grew up with. This is what we have seen all our lives. Even popular reality shows such as "The Apprentice" foster this scarcity mentality and confuse assertiveness with intelligence.

On a more practical aspect, my observation is that this approach leads to compliance but no real commitment. Managers who adopt this style often complain that they always "need to be there" to ensure that people do their work. Yes, micromanagement is exhausting!

My job then, is to bring experience, models and options to help them appreciate and adopt more effective strategies.

InfoQ: In your presentation you talked about thinking and learning as enablers for change in organizations. Can you explain what makes them so important?

Claudio: Jack Welch (former CEO at General Electric) said it well: "If the rate of change on the outside exceeds the rate of change on the inside, the end is near."

The problem is that change is difficult, yet improvement without change is impossible.

I believe that Lean is a deliberate business strategy to create customer value through the relentless development of people. In classic Agile development, we tend to see traditional managers as an impediment. But, in Lean, managers have clear purpose and methods. They learn to become servant leaders, critical thinkers, skilled problem solvers, mentors. They focus not only on the outcomes but also on the systems that lead to those outcomes.

So, in addition to the classic concept of "value streams" (how we make money, from concept to cash), I introduced the idea of bringing parallel "learning streams" to the surface, that is, to make visible what we learn (from open question to knowledge base).

Firefighting companies praise the work of firefighters, but learn nothing from the challenges they face. Learning streams bring to the surface the work of the real heroes — people who move towards preventing and eradicating problems systematically.

InfoQ: A3 problem solving is a technique based upon Kaizen or continuous improvement. Can you briefly describe how this technique works?

Claudio: It takes two people to do A3 Thinking properly. So, imagine you are a problem solver and I'm your manager and/or mentor. In its purest form, you'd take a problem you struggle with, an A3-sized sheet of paper, pencil and eraser. 

Then you'd take a series of steps to systematically frame, analyse and eradicate the problem, following a PDSA cycle (Plan, Do, Study, Adjust). At each step, you'd use the report to capture and validate your understanding with others at the "gemba" — the place where the value-creating work happens.

As your hypothetical mentor, I would help you by systematically probing your thinking at each step. I would ask you to clarify each point, I'd challenge your assumptions and implications. I would encourage you to get the facts and seek consensus. You would not proceed to the next step until I'm satisfied that the current step is clear, thoroughly researched and developed.

You see, your goal is to solve a problem, my goal is to develop your critical thinking skills. The report is merely the communication tool to capture the story of the problem as your understanding evolves.

InfoQ: When do you recommend to use A3 problem solving? When not?

Claudio: A3 problem solving can be used to gain and share insights, guide and capture the story of a problem, establish powerful conversations, expand your circle of influence and much more. For example, I'd often start an A3 when I have to rely on influence rather than authority, especially outside a team, department, or even country.

Problems don't have to be that big, but I recently discussed a preliminary A3 with a CFO to get his input and assess the threat of certain company policies to the future of an extremely expensive IT project. You can move mountains if you need to.

I'm not a complexity theory expert, but I'd consider the ability to easily move through the organisation boundaries a complex problem. In the traditional Lean literature, there is typically a strong emphasis on root cause analysis. This makes it an ideal method to cope with issues in the complicated domain (e.g. technical issues, where causes can be found) but perhaps not so useful in truly complex domains where a better strategy involves probing rather than cause analysis. In reality, A3 reports are very flexible and "proposal A3s" replace the root cause analysis with options and recommendations.

Like any investigative work, however, it takes time to develop a report. In Lean, we say that "you go slow to go fast".

Bear in mind that the report is not as important as the PDSA thinking sequence it captures. For small problems you may use a whiteboard or follow the steps in your head.

InfoQ: Can you elaborate how A3 thinking addresses the why, what and how of problems?

Claudio: A3 reports are as unique as the problems they try to address. The underlying thinking sequence is important, however. First, you need to grasp the situation and clearly frame "the problem" (the "what"). A problem is typically expressed as a gap between a standard (or shared expectation) and the current situation. You see? There is no "why" (cause) at this stage and certainly no "who" (to blame)!

Then you'd typically define a target, a step in the right direction. Only then you go to deeply analyse "why" a problem occurred. Once the causes are established, you proceed with the "how" by identifying necessary and sufficient countermeasures (hypotheses of how to neutralise the causes), an action plan, and progress indicators. Finally, during and after the execution, you follow-up by looking at the results and adjust as required.

InfoQ: You created Popcorn Flow, a Lean based change method. Can you describe it?

Claudio: Lean is not just about creating value. What we learn by doing it matters — a lot.

The challenge is to experiment faster and find ways to raise visibility throughout the organisation.

Agile teams typically use some form of visual control (e.g. a Scrum or Kanban board) to visualise and manage their value-streams. Imagine then an additional "popcorn board" to help them bring problems to the surface, negotiate change, and track a continuous flow of really rapid, small and explicit change experiments.

The word "popcorn" stands for Problems & observations, Options, Possible experiments, Committed, Ongoing, Review, Next. Each element represents a column on the board which is designed to visually guide our thinking.

Even individuals and teams that react to change in a way that we often perceive as "resistance" have problems. So, let's create a sense of urgency and let's write these problems down as they emerge.

Let's say we quickly discuss and agree that we have a general code quality problem. Rather than digging into root cause analysis, what options could we exercise that would likely address the issue? TDD, unit tests, code reviews or, perhaps, pair programming. Rather than forcing people to permanently commit to a full option, however, we simply create one or more explicit experiment, typically lasting only one or two weeks, with a reason, an action, a clear expectation (qualitative and/or quantitative) and a review date.

At regular intervals, we review these experiments using a very specific review kata — a predicable sequence designed to highlight the gap between expectation and reality.

The kind of experimentation I'm talking about here is much closer to an entrepreneurial Lean Startup approach than the one a scientist would run on a laboratory. Parallel, isolated, repeatable, and unbiased experiments would be good in principle, but I'm not trying to move human knowledge forward. In my mind, "any change is good change" and the goal is to do what it takes to rapidly converge to something that works without relying on a perfect plan.

InfoQ: How does Popcorn Flow compare to A3 Thinking?

Claudio: For an A3 thinker, Popcorn Flow may seem like heresy. In A3 thinking, you try to be as objective as possible and take the time to gather all the facts and analyse the data. With Popcorn Flow, you create urgency and generally rely on tons of short, cheap, and intuitively good experiments to converge to perfection. A3 Thinking uses facts and rationale to "pull" others and reach consensus. Popcorn flow enables subjectivity to play a massive role and involves others through options and experimentation co-design. The scope is simply different. Popcorn Flow tends to elicit options that are actionable by a team and require taking a decisions rather than massive investigation. It is also true that, for problems that are outside a team's circle of influence or require further analysis, a viable option may involve creating an A3 report.

InfoQ: Can you give some examples of how Popcorn Flow has helped to get changes done in organizations?

Claudio: I've seen a number of small software development teams consistently generating 5 to 10 experiments every single week, moving from no deployment to deploying multiple times per day. When detached senior managers ask about the Agile maturity of a specific team, all I have to do is point at their Popcorn board and show their experiment throughput. Agile is about adapting to change, not about compliance to a specific brand of Agile ceremonies!

An important point is that Popcorn Flow is about developing good patterns of thinking. Nothing restricts it to software development teams. In fact, I have a few examples of adoption from management teams and sales teams. I expect this trend to grow even more as it becomes more popular.

In particular, introducing Popcorn Flow to sales teams helped me appreciate how little we know about what customers are trying to accomplish (jobs) and the metrics they use to evaluate our solutions (outcomes). As a consequence, I'm doing a lot of work on the innovation space lately, with particular focus on the practical applications of Jobs-To-Be-Done theory. There would be so much more to talk about!

Finally, a couple of days ago I put a Popcorn board in the sitting room, at kid's level. Best decision ever. My wife and I are teaching option thinking and negotiating change with my 5-years-old son!

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