Deliver Early and Often

Most organizations embrace Lean-Agile development because their existing processes aren’t producing the results they need, or because they anticipate that they won’t work in the future. By choosing a Lean-Agile path, they’re embracing a model based on incremental development and early and continuous value delivery, as Figure 4-1 illustrates.

The ability to deliver early and often has a direct economic benefit, as illustrated in Figure 4-2.

This figure shows how Lean-Agile methods deliver value to the customer much earlier in the process and accumulate additional value over time. Conversely, with the waterfall model, value can’t even begin to accrue until the end of the development cycle. Also, the figure above doesn’t even take into account the advantage of far faster feedback or the probability that the waterfall delivery would not occur on time. Simply put, even a perfectly executed waterfall project (and there aren’t so many of those) can’t compete economically with an Agile approach.

Moreover, as long as the quality is high enough, products and services offered to the market early are typically more valuable than if they were delivered later. After all, if they arrive ahead of the competition, products are worth a premium as they aren’t available from anyone else. Even a Minimum Viable Product (MVP) can be worth more to an early buyer than a more full-featured product delivered later.

Apply a Comprehensive Economic Framework

Every SAFe portfolio requires an economic framework—a set of decision guidelines that align everyone with the financial objectives of a portfolio and inform the decision-making process. After all, teams and Agile Release Trains (ARTs) make many decisions every day, influencing economic outcomes. Without proper guidance, self-organizing teams will just make their ‘best guess.’ As a result, teams may make choices that are not aligned with the core economics of the system, creating the potential for technical debt, rework, waste, and a lack of fitness for use.

SAFe’s economic framework contains these four primary elements:

• Operating within Lean budgets and guardrails. These guardrails include guiding investments by horizon, optimizing value and solution integrity with capacity allocation, approving significant initiatives (portfolio epics), and continuous business owner engagement.

• Understanding economic trade-offs. Everyone involved in building solutions needs to understand the trade-offs between development expense, lead time, product cost, value, and risk. Changing any one of these five variables can have an impact on one or more of the others. Understanding how each variable influences the others is vital to making good decisions.

• Leveraging suppliers. Outsourcing labor can provide a cost-efficient way to add personnel, especially if the need is temporary or the demand is highly variable. A supplier may provide specific hardware, software, or skills needed for the solution.

• Sequencing jobs for the maximum benefit. In a flow-based system, job sequencing, rather than prioritization based on speculative return on investment, produces the best economic outcome. To that end, Weighted Shortest Job First (WSJF) is used to prioritize backlogs by calculating the relative Cost of Delay (CoD) and job duration.

The Solution Is a System

Each value stream produces one or more solutions, which are the products, services, or systems delivered to internal or external customers. When it comes to these systems, Deming’s quote that “a system must be managed” leads to these critical insights:

• Team members should clearly understand the boundaries of the system and how it interacts with the environment and the systems around it.

• Optimizing a solution component does not optimize the system as a whole.

• The value of a system passes through its interconnections.

• A system can evolve no faster than its slowest integration point.

The Enterprise Building the System Is a System, Too

There’s a second aspect to systems thinking: the people, management, and processes of the organization that develop the system are also a system. The understanding that systems must be managed applies in this case as well. Otherwise, the components of the organization building the system will optimize locally and become selfish, limiting the speed and quality of value delivery. While these insights apply directly here, there is more to consider:

• Since building systems is a social endeavor, leaders should create an environment where people can collaborate on building better systems.

• Suppliers and customers are integral to the value stream. They need to be treated as partners, based on a long-term foundation of trust.

• Optimizing individual teams or functional departments does not necessarily enhance the flow of value through the enterprise.

• Accelerating value flow requires eliminating silos and creating cross-functional organizations, such as ARTs and Solution Trains.

Understand and Optimize the Full Value Stream

Value streams are fundamental to SAFe. A SAFe portfolio is a collection of development value streams, each of which delivers one or more solutions to the market. Each value stream (Figure 4-4) consists of the steps necessary to integrate and deploy a new concept through a new or existing system.

Understanding and optimizing the full value stream—the third aspect of systems think-ing—is the only way to reduce the total time it takes to go from concept to cash.¹

1. Mary Poppendieck and Tom Poppendieck, Implementing Lean Software Development (Addison-Wesley, 2006).

Only Management Can Change the System

This Deming quote prepares us for a final set of insights. Systems thinking requires a new approach to management as well. Lean-thinking managers are systematic problem-solvers, who take the long view, proactively eliminate impediments, and lead the changes necessary to improve the systems that limit performance. They exhibit and teach systems thinking and Lean-Agile values, principles, and practices. Moreover, such leaders foster a continuous learning culture that includes relentless improvement in the application of systems thinking.

Integration Points Create Knowledge from Uncertainty

Lean principles and practices approach the problem differently by starting with a range of requirements and design options (Principle #3), which are considered while building the solution incrementally in a series of short timeboxes (iterations). Each iteration results in an increment of a working system that can be evaluated. Subsequent ones build on the previous increments, and the solution evolves until it’s released. The knowledge gained from integration points helps establish technical viability, and can also serve as minimum viable solutions or prototypes for testing the market, validating usability, and obtaining objective customer feedback.

Integration Points Occur by Intent

The development process and the solution architecture must both be designed for frequent integration points. Each point creates a ‘pull event’ that pulls the various solution elements into an integrated whole, even though it addresses only a portion of the system intent. Integration points pull the stakeholders together as well, creating a routine synchronization that helps assure that the evolving solution addresses the real and current business needs, as opposed to the assumptions established at the beginning. Each integration point delivers its value by converting uncertainty into knowledge.

Faster Learning Through Faster Cycles

Figure 4-6 illustrates how integration points reinforce the basic Plan–Do–Check–Adjust (PDCA) scientific learning process, which helps control the variability of solution development. Like science, the system advances one cycle at a time.

Moreover, the more frequent the integration points, the faster the learning. In complex systems development, local integration points are used to assure that each system element or capability is meeting its responsibilities to contribute to the overall solution intent. These local points are then integrated at the next higher system level. The larger the system, the more such integration levels exist. The more frequent it happens the faster you learn.

Base Milestones on Objective Evidence

Unlike the phase-gated model, development milestones in SAFe involve a portion of each step—requirements, design, development, testing—together producing an increment of value. Further, this is done routinely on a cadence, which provides the discipline needed to ensure periodic availability and evaluation, as well as predetermined time boundaries that can be used to collapse the field of less desirable options.

What is measured at these critical integration points is subject to the nature and the type of system being built. But the point is that the system can be objectively measured, assessed, and evaluated by the relevant stakeholders frequently throughout the solution development life cycle. This evaluation provides the financial, technical, and fitness-for-purpose governance needed to ensure that continued investment makes economic sense.

Visualize and Limit WIP

Overloading teams and ARTs with more work than can be reasonably accomplished causes too much WIP, which confuses priorities, causes frequent context switching, and increases overhead and wait times. Like a crowded highway at rush hour, there is simply no upside to having more WIP than the system can handle. Experience shows that excess WIP drives high utilization, which results in the inability to respond to change, burnout, late product launches, reduced profits, and poor economic outcomes.

The first step to correct the problem is to make the current WIP visible to all stakeholders. The simple Kanban board in Figure 4-8 provides one example of how to do this.

Kanban boards show the total amount of work for each development state and help identify bottlenecks. In some cases, simply visualizing the work helps address the problems of starting too much work and not finishing enough. When any state reaches its WIP limit, no new work is started until the bottleneck is addressed, which significantly increases flow. Establishing WIP limits balances the demand against the available capacity.

Reduce Batch Size

Another way to improve flow is to decrease the batch sizes of the work. Small batches flow through the system faster and with more predictability, which results in more rapid learning and value delivery. As Figure 4-9 illustrates, the economically optimal batch size depends upon both the holding cost (of inventory and of delaying feedback and value) and the transaction cost (of planning, implementing, and testing the batch).

To improve the economics of smaller batches and to increase throughput and reliability, it’s essential to reduce the transaction costs. This cost reduction typically involves more investment in infrastructure and test automation, including practices such as continuous integration, test-driven development, and DevOps.

Manage Queue Lengths

The last insight to improve flow is to manage and reduce the length of the work queue. Long queues of work create all sorts of undesirable results.

• Longer cycle times. New work entering the queue takes longer to complete.

• Increased risk. The value of items in the queue, such as requirements, decays over time.

• Increased variability. Each item has some variability, and the more items, the more overall variability.

• Lower motivation. A large queue of work lowers the sense of urgency.

In contrast, reducing queue length decreases delays, reduces waste, and increases the quality and predictability of outcomes. Little’s law—the fundamental law of queuing theory—tells us that the average wait time for an item in the queue is equal to the average queue length, divided by the average processing rate.

The line to buy coffee at Starbucks teaches us that the longer the queue, the longer the wait. It also tells us that there are only two options to decrease wait times: reduce the length of the queue (e.g., open more lines) or increase the processing rate (make coffee faster). Increasing the processing rate—doing things more quickly—is indeed beneficial, but improvements in processing rates may reach their limits before they truly impact throughput. So, the fastest way to reduce wait times is to reduce the length of the queue. Keeping backlogs short and largely uncommitted facilitates accomplishing this goal. Visualizing the backlog also helps immensely.

By combining the three elements of visualizing and limiting WIP, reducing batch sizes, and managing queues, measurable improvements in throughput, quality, customer satisfaction, and employee engagement are possible.

Align Development Cadence

Figure 4-11 illustrates that each team is ‘sprinting’ on the same cadence, allowing multiple teams to evolve, integrate, and demo the solution on a predictable schedule. This improves alignment, communication, coordination, and integration.

However, Reinertsen notes that ‘delivering on cadence’ is another matter entirely, one that requires scope or capacity margin (buffer). ARTs need to be careful about planning to meet date-based commitments, which requires some scope or capacity margin—something that you’ll see in many elements of the SAFe PI planning and commitment processes.

Synchronize with Cross-Domain Planning

In addition to common cadence, periodic cross-domain planning (Program Increment [PI] planning) provides the opportunity for the various aspects of a solution—business and technical—to be integrated and evaluated together at one time. This helps teams manage variability by frequently revisiting and updating the plan. In other words, cadence-based planning limits variability to a single time interval (Figure 4-12).

PI planning is essential to SAFe and serves three primary purposes.

• A milestone to assess the current state of the solution

• Realigns all stakeholders to a shared technical and business vision

• The teams plan and commit to the next PI

With synchronized cross-domain planning, the business has a current ongoing plan that leads to the appropriate actions. Also, the development of large-scale systems is fundamentally a social activity. This planning event provides an opportunity to create and improve the social network that builds the solution. Taken together, cadence and synchronization—and the associated activities—help reduce uncertainty and manage the variability inherent in solution development.

Leverage Systems Thinking

Leveraging systems thinking allows knowledge workers to see the whole picture, communicate across functional boundaries, make decisions based on an understanding of solution economics, and receive fast feedback about the viability of their solutions. They can participate in continuous, incremental learning and mastery, and they can contribute to a more productive and fulfilling solution development process.

Understand the Role of Compensation

Many organizations still embrace outdated assumptions about human potential and individual work performance. Despite mounting evidence that short-term incentives and pay-for-performance plans don’t work and often do harm, they continue to apply these and similar measures. Authors as varied as Pink³ and Drucker⁴ have highlighted the core paradox of compensation for knowledge workers: If you don’t pay people enough, they won’t be motivated. But after a certain point, adding incentive compensation can shift the focus to the money, rather than the work, resulting in worse employee performance. Lean-Agile leaders understand that neither money nor the reverse—threats, intimidation, or fear—inspires ideation, innovation, and deep workplace engagement. Specifically, monetary incentives based on individual objectives may cause harmful internal competition and destroy the cooperation needed to achieve the broader aim.

3. Daniel Pink, Drive: The Surprising Truth About What Motivates Us (Riverhead Books, 2011).

4. Peter F. Drucker, The Essential Drucker (Harper-Collins, 2001).

Create an Environment of Mutual Influence

An environment of mutual influence fosters motivation and empowerment. Leaders create an environment of mutual influence by giving honest feedback supportively, showing a willingness to become more vulnerable, and encouraging others to do the following:⁵

• Disagree when appropriate

• Advocate for the positions that represent their beliefs

• Make their needs clear and push to achieve them

• Enter into joint problem-solving, with management and peers

• Negotiate, compromise, agree, and commit

5. David L. Bradford and Allen Cohen, Managing for Excellence: The Leadership Guide to Developing High Performance in Contemporary Organizations (John Wiley and Sons, 1997).

Provide Autonomy with Purpose, Mission, and Minimum Possible Constraints

Daniel Pink’s work, and the work of many others, helps us understand that there are three primary factors in establishing deep workplace engagement.⁶

• Autonomy is the desire to self-direct or to manage one’s own life. When it comes to knowledge work, self-direction is better.

• Mastery is the inherent need for people to grow in their careers and acquire new skills that allow them to provide ever higher levels of contribution.

• Purpose is the need to make a connection between the aim of the enterprise and the worker’s daily activities. This makes the work more meaningful and links the worker’s personal goals to the company mission.

6. Daniel Pink, Drive: The Surprising Truth About What Motivates Us (Riverhead Books, 2011).

Lean-Agile leaders need to understand these concepts and strive to continuously create an environment where knowledge workers can do their best work.

Centralize Strategic Decisions

Of course, not every decision should be decentralized. Some decisions are strategic, have far-reaching impact, and are largely outside of the team’s areas of knowledge and responsibility. This leads us to conclude that some decisions should be centralized. Generally, these types of decisions have the following characteristics:

• Infrequent. These decisions aren’t made often and typically aren’t urgent. Thus, deeper consideration is appropriate.

• Long-lasting. Once reached, these decisions are unlikely to change.

• Provide significant economies of scale. These decisions provide large and broad economic benefits.

Leadership is charged with making these types of decisions, supported by the input of those impacted by the decisions.

Decentralize Everything Else

However, most decisions do not reach the threshold of strategic importance. Therefore, all other decisions should be decentralized. The people who have better local context and detailed knowledge of the technical complexities of the current situation should make these decisions. These types of decisions typically meet the following criteria:

• Frequent. These decisions are common and occur often.

• Time critical. A delay in these types of decisions comes at a high cost.

• Require local information. These decisions need specific local context.

Understand the Flow of Value

SAFe’s networked operating system is intensely focused on continuous value delivery, requiring the enterprise to organize its portfolios around the flow of value, called ‘value streams.’ A SAFe portfolio is a collection of development value streams, which are connected to deliver more aligned value together. This allows the entire enterprise—from Agile teams to ARTs and from Solutions Trains to the portfolio—to deliver value to the customer in the shortest sustainable lead time. Organizing portfolios around value streams offers substantial benefits to the enterprise, including the following:

• Faster learning

• Shorter time to market

• Higher quality

• Higher productivity

• Leaner budgeting mechanisms

Furthermore, value stream mapping can be used to identify and address delivery delays, waste, and non-value-added activities.

Realize Value Streams with Agile Teams and Trains

Value streams are realized by the formation of Agile Release Trains (ARTs). Each ART is a team of Agile teams that can define, deliver, operate, and support customer solutions. ARTs work across functional silos and potentially eliminate them. Agile teams are the basic building block of ARTs and are cross-functional, which enables them to define, build, test, and where applicable deploy elements of value quickly with a minimum of handoffs and dependencies (Figure 4-14). In addition, when building extra-large systems, ARTs, along with suppliers, are further organized into Solution Trains, which are designed to deliver even more significant value to the customer.

Reorganize around Value

While it’s best to keep teams and trains together to foster high performance, the organization must be flexible and adapt when the market, customer needs, or strategy changes. After a while, some solutions may require more or less investment or need to be decommissioned entirely. In short, the solutions in a value stream evolve constantly, and the teams and trains need to evolve with them. The ability of organizations to organize around value, and to reorganize around new flows of value as needed, is a key driver for business agility.