Cover Page

KANBAN CHANGE LEADERSHIP

Creating a Culture of Continuous Improvement

KLAUS LEOPOLD

SIEGFRIED KALTENECKER

 

 

 

 

Wiley Logo

APPRAISALS

Kanban Change Leadership spells out not only what Kanban is but why and how it works in high-variation environments. There is deep thinking and real implementation in this impressive book. Jim Benson—creator of Personal Kanban and CEO of Modus Cooperandi, USA.

The authors of the book Kanban Change Leadership perfectly mastered the balance between writing the standard and giving the reader a hands-on guideline on how to achieve real change using simple techniques that have an extremely deep impact. Even after reading it multiple times, this book stays exciting and should be—next to David J. Andersons’ work—prominently present in every bookshelf. Eric-Jan Kaak—CIO Tecnica Group SpA/Blizzard Sport, Austria.

I’ve been lucky enough to follow Klaus’ and Sigi’s live presentations closely for years. Now with Kanban Change Leadership, everyone can have access to their insightful and practical advice regarding implementing Kanban. Change agents will be especially interested in Klaus’ and Sigi’s focus on sociological and cultural concerns (as the excellent bibliography clearly illustrates). This is highly recommended for team leaders, coaches, managers, and executives. Jabe Bloom, Chief Flow Officer, PraxisFlow/Principle Consultant, Coherent Insight, USA.

Finally a book for practitioners that isn’t scared of presenting useful theory as well as concrete tips. Through the entertaining use of storytelling, and drawing from their experience, they do an excellent job of tackling the more difficult topics of change and leadership. Kurt Häusler, Software Development Manager and Kanban Coaching Professional, Germany.

Klaus and Sigi provide a comprehensive yet approachable guide to using Kanban to manage change. Starting with a good practical coverage of the principles and practical of the Kanban method from the perspective of how to actually start using it, the book then takes flight into deeper but still practical change management models and practices and then ties it all together in the third part leveraging lifelike stories of change to bring together and liven up all elements in an experiential manner. As an enterprise kanban coach, I found the book inspired me to aim higher, and I will also recommend it to others looking to manage change in evolutionary respectful ways such as Kanban in their organization or as a professional practice. Yuval Yeret—Enterprise Lean/Agile Coach & CTO AgileSparks, Israel.

The unique strength of this book is combining the necessary background (WHY?) on change with the necessary WHAT and HOW (Kanban). Markus Andrezak, CEO überproduct GmbH, Germany.

Klaus and Sigi’s combination of Change Leadership and Kanban offers valuable insights and techniques for helping organizations learn and respond to change faster. I have found great success using these approaches over the last year and highly recommend this book for those in the field. Cliff Hazell, Lean/Agile Coach, Spotify, Sweden.

Kanban Change Leadership gives every change agent a set of tools to use when introducing a major change in an organization. Not only does it present the tools but also explains the underlying mechanisms that make the tools work. Pawel Brodzinski, CEO, Lunar Logic, Poland.

Want to meet the Peter Drucker productivity challenge? Then this book is a good start. Håkan Forss—Lean/Agile Coach Avega Group, Stockholm, Sweden.

“I have long respected Klaus and Sigi for their expertise in both Kanban and change leadership, and this book does a great job of integrating the two.” Mike Burrows, UK Director and Principal Consultant, David J Anderson and Associates, England.

“This practical book explains Change Management with Kanban in a very deep and insightful way.” Vikram Sharma, Kanban Change Agent, Robert Bosch Engineering and Business Solutions Limited, Bangalore, India.

FOREWORD

As I sit here at home in the summer of 2014 contemplating the next few years of for my business, my family, and my personal life, I realize that perhaps my children aged 12 and 9 will never actually learn to drive a car, unless they choose to do so for purely recreational purposes. The driverless car is now technically viable and commercial models may appear within the decade. The driverless car is truly a discontinuous or disruptive innovation. It will change the way we live and the next generation of adults will know a truly different lifestyle and society to the one I have grown up in. In a world of driverless cars, what is the difference between a family car, a rental car, and a taxi? Perhaps there is none? How will that disrupt existing businesses and existing lifestyles? What shifts in society will it enable?

Unlike the electric car, which uses an electric motor and lithium ion batteries, the driverless car is a truly disruptive and discontinuous innovation. The change to electric motors is on the other hand merely a continuous innovation. It doesn’t disrupt the market; it merely offers an alternative technology for an existing system and operating model. It does shift the market for energy supply and it shifts the demand on natural resources, encouraging lithium mining rather than oil drilling, but life for everyday citizens doesn’t change that much.

The technology industry tends to discard the value of continuous innovation—doing things better rather than differently or in a new and previously unavailable or unconsidered fashion. However, consider the world through the eyes of a 12-year-old. Children today assume that screens are touch sensitive and that they can interact with a device through the screen. They do not remember a world before the iPhone or the iPad. They’ve grown up in a broadband connected world. A rotary dial telephone is alien to them as is the concept that telephones are connected to the wall through wires. Continuous innovations can be easy to adopt because they don’t require a huge change in lifestyle or business model. People with mobile phones simply upgraded to the latest model of smartphones and started using the touch screens, but the combination of ubiquitous broadband wireless data and high-definition color touch screens, available as smart handheld devices, did provide tremendous opportunity for change.

Continuous innovations—making things better, easier, and cheaper—commoditization, and democratization are all around us every day. Discontinuous, disruptive innovations come along every few years but the pace of these disruptive changes is accelerating. Each generation of technology innovation seems to help accelerate the pace of the next generation of discontinuous, disruptive change. Meanwhile, the world population is growing and the level of education is improving. More brainpower the world over means more knowledge workers producing more new knowledge and faster and faster innovations.

For the leaders of today’s businesses this pace of innovation presents a huge challenge: business models that were solidly profitable for decades or even centuries and being threatened and disrupted. Uber is disrupting the market for taxis, a business model that is 120 years old, but only 5 years from now, driverless cars will disrupt Uber. Large businesses survive for shorter and shorter periods of time. Who would have thought, 10 years ago, that Nokia would have lost the mobile phone market and all but ceased to exist? Resilience is the new challenge for the senior leadership of big businesses.

How do you create a resilient business? How do you survive and thrive in a world that is moving so quickly where continuous innovations threaten your products and services on a monthly basis and discontinuous innovations threaten your business model every 2–5 years? The modern business must be able to change frequently and rapidly. It must have a core capability to enable and manage change. A modern business must be capable of evolving to adapt to a changing external environment full of new innovations.

When threatened with declining markets and possible extinction, businesses need to be able to experiment with new products, new services, and new models of service delivery. In turn, they may want to set the pace and stay ahead by producing their own, mostly continuous, innovations in products, services, and service delivery models. Innovations can provide a competitive edge. They can make the difference between surviving and thriving or declining and failing completely.

When a business wants to innovate, it almost certainly requires IT. IT projects are born out of a desire for a business to innovate or quickly catch up with a competitive innovation. IT projects are about change, and the service delivery from IT can provide a competitive edge if innovations can be delivered rapidly, at low cost, and with predictable outcomes. Equally, businesses can’t always predict which ideas will work in the market and which won’t. Evolving to stay fit for purpose requires experimentation—like generating several mutations of a species and waiting to see which produces the better result. As a result, there is almost infinite demand for IT projects because they represent experiments and guesses. The more bets we can place and the faster we can place them, the more chance we have of surviving and thriving. A strong capability in IT has become a core part of a strong adaptive, evolutionary capability in a business. Strong, fast, reliable, predictable IT services are now core to enabling resilience. More than ever, senior executives are pressurizing IT departments for more work and more services, delivered faster and with greater predictability and ideally at lower cost. When you don’t know which options will work, you’d prefer to have lots of them at a low cost per option.

So, the new world of twenty-first-century business involves an ever faster pace of innovation and a greater need than ever to respond to a changing environment with new products, services, and service delivery models. Business must be capable of adapting quickly in order to remain fit for purpose. Resilience requires a strong ability to change. Change management is now a core business skill for survival in the twenty-first century!

The Kanban method was born out of the synthesis of two ideas to solve two different but related business problems. The first problem was tendency to manage IT projects in large batches and to commit too early to specifications when the requirements were still uncertain. In 2004, I introduced the concept of a virtual kanban system, with an IT department at Microsoft. The concept of kanban systems was adapted from Toyota’s use of them in manufacturing industry. Kanban systems force deferred commitment, limiting the work in progress, preventing businesses from committing too early to things that are uncertain. Kanban systems force a discussion about what should be started now and whether we have enough information to start now versus what should wait until later and until more information is gathered or what should be discarded altogether. Kanban systems have a vital role to play in a world full of increasing pace of change and lots of uncertainty.

The second problem was a very human problem. People in IT departments were resistant to adopting new methods and processes. About a decade ago, I concluded that this resistance wasn’t simply explained away as laziness or bad behavior; it was actually core to the human condition. The people were resisting adopting new methods and processes because they were wired to do so. So I asked myself, what would be easier to change, the design of the humans or the way we manage change and the introduction of new working practices? I concluded that we needed a new approach to change management: we needed an evolutionary approach to change.

In the English-speaking world, change management is dominated by the model developed by the McKinsey consulting firm. This model of prescribing a defined process or designing a new process to replace an old one, and then managing a transition from the old method to the new, has been around for over 80 years. It seemed to serve manufacturing industry and related physical goods industries such as distribution or retail rather well. Despite the ubiquitous nature of this model among large consulting firms working in the IT sector, I concluded that it was an obsolete model that wasn’t compatible with the human condition. Trying to impose change on knowledge workers and creative people was simply a recipe for invoking passive–aggressive resistance. Instead, we needed a way to “start with what you do now” and evolve from there, and it had to be a way that engaged the people doing the work and made change and improvement an everyday concern for them. It had to self-motivate change from within, not some change imposed by change agents from the outside. The industrial engineering model of the twentieth century was out, and self-motivated, management driven improvement was in!

In 2007, these two ideas came together in a synthesis that we now call the Kanban method. Kanban systems and visual boards are key enablers of a culture of continuous improvement. It turns out that visualizing invisible work on what has become known as a kanban board and deferring commitment through use of a kanban system are catalysts of employee and manager-driven process improvement. Change driven from the shop floor and undertaken as part and parcel of the everyday work of the organization produces just the experimental, evolutionary change mechanism we need in order develop a core adaptive capability for business resilience. Meanwhile, the use of kanban systems improves delivery through shorter lead times and greater predictability. Kanban Change Leadership becomes a core strategy for resilience in twenty-first-century businesses.

I’m delighted that Klaus Leopold and Sigi Kaltenecker’s book has been translated into English. Klaus and Sigi hail from Austria, and their work in change management has been influenced by a number of German-speaking theorists, such as Baecker, whose work is not widely known or available in the English language. Klaus and Sigi open our minds to a different slant on change management by synthesizing ideas from the German-speaking world. Change management texts in English are all too dominated by the twentieth-century model popularized by McKinsey. So it is fitting that a book about Kanban, a new approach to change in the twenty-first century, should feature the diversity of thought in the field from experts not well known to English-speaking readers. Part 2 of this book offers you insights into the human condition and a deeper understanding of why a new approach to change is needed in the twenty-first century. It will help you understand how people take change personally and how to adapt your approach rather than push against the fundamental psychology and sociology of each individual. It will help you understand that the need for change is driven by change in the environment and to comprehend your business as a system that responds to that environment. This book will explain to you how and why Kanban offers us a new approach to change in twenty-first-century businesses using knowledge workers to do creative work and why Kanban Change Leadership can help even more traditional twentieth-century physical goods businesses by providing them with IT departments more agile and adept to deliver improvement and new capabilities faster and more reliably than before. For those of you who take the time to read this book thoroughly and internalize its contents, I have no doubt that it will make you more effective coaches and leaders of change using Kanban. Your business will gain more value from a deeper more effective Kanban implementation, and both you and your business should be better equipped to survive and thrive in this rapidly evolving world of work in the twenty-first century.

David J. Anderson

Seattle, July 2014

PREFACE

We are pleased to provide the English edition of our book on Kanban Change Leadership. As the kind appraisals show, this edition builds on encouraging resonance both from readers and from clients working on their specific culture of continuous improvement.

From both groups, we have learned a lot since the first German edition of our book had been published in 2012. In this regard, the current version is also a product of continuous improvement. For both the second edition in German and the English edition, we intensively reviewed the text, adapted new experiences, dropped some ideas, and changed others. The third part of our book, focusing on the practical implementation of Kanban, has probably undergone the most radical changes. Thriving on various lessons learned with many clients, we can now provide a simple four-phase model with clear goals and tried and tested tools.

As always, coming up with a new version does not necessarily mean to achieve perfection. The process of reviewing and rewriting our initial insights amplified a few question marks too. There are some limitations we were not able to overcome such as the emphasis of Kanban on team level, the rather weak focus on whole value streams, or the missing examples of portfolio or change management Kanban.

To effectively overcome these limitations, we would have to write another book—a book with a fresh approach to the broad field of Kanban, change and leadership, with different case studies, cocreating stories together with line managers and other key players, going even beyond the exclusive IT space, exploring the benefits of evolutionary change management in other business areas such as HR, finance, or graphic design. Unfortunately, we didn’t find the time yet to realize this ambitious initiative—except for some current posts and articles that indicate what we have in mind for the future [1–5].

However, for the meantime, we wish you an inspiring read of this book—and a pleasant journey implementing some of the outlined change concepts and leadership tools. As always, we are pleased to receive all kinds of feedback.

Klaus Leopold and Sigi Kaltenecker

Vienna, July 2014

PART 1
KANBAN