Most leaders I work with have a common frustration they express to me: an inability to achieve significant gains in how quick and predictable they are in delivering work to their customers.
In my work as a consultant, coach, and trainer, there is one strategy that I help them discover that results in dramatic change to their thinking and how they view work and workers within their organization. So what is the strategy?
Flow Efficiency
Work items (ie: user stories, features, epics), or whatever artifacts represent customer recognizable value within your context, can spend their lifespan alternating between two states: active and waiting. Work is active when we are currently engaged in adding value to a work item - it has our attention and we are actively working on it. Work is in a waiting state when it has been started, but is then interrupted (for a variety of reasons) to address something else. The active time in relation to the total lifetime of a work item is a construct known as Flow Efficiency. An understanding of this relation can have serious implications on how you view your work and the decisions you make.
It's expressed as a percentage using the following formula: (Active Time / Total Time) * 100
Here is an example. A user story has taken 26 hours to complete (from start to finish). Out of that 26 hours, only 2 hours where actually spent working on the item and 24 hours of the total was in a wait state. That is a flow efficiency of 7.7%.( 2 / 26 ) * 100 = 7.7
You may be surprised - as are many of my clients and students - to discover that in knowledge work (ie: Software Development) a typical flow efficiency is measured at 4-8%! In fact, 40%+ would be VERY good.
Think about that!
This means that work items spend their existence primarily in a waiting state. Even though we have started to work on something, 92-96% of the time we are not adding value to the work item! There are numerous reasons as to why work items are placed in a waiting state: task-switching, queues, blockers, internal/external dependencies, etc... (Remember: If you are working on more than one item, every time you put aside one item to work on another, that item effectively goes into a wait state.)
So what are the implications of a low flow efficiency system and how might it change how we work and the decisions we make?
Implication #1: How busy people are is largely irrelevant.
20th century management techniques have engrained in us an obsession with the high-utilization of people. Everyone must be busy working on as many work items as they can.
This stems from a desire within us to measure what we can see, and unless we are in a manufacturing environment, what we can see are usually people! In knowledge work we can't see the work going on - it is for the most part invisible. It happens inside people's heads. Yet managers consume themselves with ensuring that people are busy in the hopes that this will churn out more work in less time. And even if it doesn't, at least they can claim they were getting the most out of their people!
In a low flow efficiency environment high-utilization of people is not the path to greater speed and predictability. The fact of the matter is that if work spends the majority of its time in a waiting state, then it really does not matter how busy people are - to the contrary. More work for individuals in a low efficiency environment only contributes to a degrading flow efficiency - particularly because of task-switching.
Customers are not paying for key strokes. They don't care how busy your workers are. They care about speedy delivery, reliability, and quality. Idle work, not idle people should be the centre of your attention. Your customer's needs will be more positively impacted by focusing on the flow of work (and removing delay within that flow), not the utilization of people.
Implication #2: The performance of people is largely irrelevant.
In an effort to increase the speed and amount of work that teams deliver, the response from most managers is to hire more people and/or make people work faster and harder. The majority of my coaching engagements usually begin with a manager meeting with me and pleading for help to "please go make my teams faster"! Thus begins the process of me helping them understand that if they are in a low flow efficiency environment (they usually are) focusing on improving the performance of individuals (or hiring more of them) is not really going to have much of an impact in addressing their pain points. Why?
Imagine this frustrated manager has an environment where flow efficiency is 6%. So 94% of the time work is in a wait state, and only 6% of the time is value actually being added to work. If we choose to focus on optimizing the performance of the 6% of active work, any improvements are going to be very marginal on the overall increase in delivery time of work over its entire lifespan - we are only addressing 6% of the total!
Let's suppose that out of that 6%, that 2% of that time is development work. Even if you make your development team 10 times faster, or double the size of your development team, you are going to have very little impact on the whole.
The opportunities for improvement that are really going to shift the needle in delivery times and predictability are in tackling the 94% of delay that exists in the flow of work. In such an environment we need to help managers move away from managing and measuring people, and instead managing and measuring the flow of work.
Implication #3: Your estimates are doomed.
Most organizations are horrible at estimating. There are numerous reasons for this, but a key contributor to why our estimates are so unreliable is that when we estimate we are producing "effort" estimates. We are estimating the amount of effort we think it will take to complete a work item, and when we do this we are estimating the 4-8% of active value-adding-work-time we anticipate to incur. But we are NOT estimating the amount of wait time that our work item is going to spend in its lifespan. That's 92-96% of the lifespan of a work item that we are not taking into consideration. No wonder we are so far off in our estimates. We can try and game the system by adding buffers to our estimates, but alas this tactic is often futile and detrimental to developing predictability.
Implication #4: Focusing on team performance is not the path to business agility.
It has been my experience, that in most organizations of more than 50 people, the notion of self-organizing cross-functional teams is a fantasy. Time and time again, when I look at how work flows through an organization, it rarely exists within the boundary of one team and independent of any other teams. What I more commonly witness are cross-functional silo'd teams that have dependencies between each other.
Even more detrimental to the delivery times and predictability of our work is the delay that exists between teams. If work is flowing through more than one team (it usually is) and that work is not arriving to the right-team-at-the-right-time then delay is going to be introduced - and with delay we have negative impact to our flow efficiency.
It won't matter how optimized individual teams are if the flow of work amongst them is not managed to create smooth flow. Business agility is not achieved by how many high-performing teams you have, but rather, how well you manage the interactions amongst teams.
"The performance of a system is not the sum of its parts. It's the PRODUCT of its INTERACTIONS." - Dr. Russell Ackoff.
Let's Do Something About It
Now that we are aware of some of the implications of a low flow efficiency, what practical and actionable guidance should we consider in order to improve our service delivery and deliver value to our customers when they need it? How can we do this in a way that favours managing and measuring work OVER managing and measuring people?
Visualize work: Knowledge work and professional services are domains in which the work we do is largely invisible. We need to find a way to make this work visible so that we have something tactile that we can have conversations about. We need to see how-our-work-works!
Limit the amount of work in progress: If we are to catalyze improvements in how we work and develop a sustainable pace, we need to start limiting the amount of work we commit to at once. Predictability in our delivery is not possible unless we limit the amount of work in progress.
Manage the Flow of Work: As we have discussed in this article, we need to focus our efforts on identifying those things that hinder the flow of work. We need to shift our attention from the utilization of people towards the management of work and how it flows.
Make Policies Explicit: Whenever we discover flow impediments we should strive to resolve them. Part of the resolution should include updating the policies of how work flows through our system and making them visible. Evolving our policies and making them explicit is a cornerstone to continuous improvement.
Implement Feedback Loops: Business agility and continuous improvement are rooted in a desire to quickly learn and respond to feedback. We need to establish mechanisms where we can collect and evaluate feedback so that we can maintain or correct our course. These mechanisms should foster an ability to gather meaningful feedback that we can act on.
Collaborate and Experiment: An agreement to pursue evolutionary improvement by encouraging acts of leadership and collaboration at all levels of an organization are necessary if we aspire to a culture where change can flourish through experimentation founded on the scientific method. Our approach needs to move towards a non-deterministic probabilistic way of thinking, and away from a speculative and wishful mindset.
Helping organizations develop an understanding of the implications of poor flow efficiency and then using these practices to help overcome that challenge is a strategy that has proven very effective for myself and my clients. My premium management training classes provide in-depth practical guidance on how to apply these techniques.
Conclusion
I'm not suggesting that an obsession with accurately tracking flow efficiency will be time well spent, in-fact, even if you wanted to, it can be quite difficult to do without electronic tools. However, even an approximate understanding of your flow efficiency, or being on the lookout for interruptions of flow (blocked items, items aging in queues, dependencies, etc..), and focusing on developing smooth-fast-flow, can have tremendous benefits to your ambition of delivering more quickly and more reliably to your customers.
Focus on eliminating wait times of your work items! Strive for flow that is smooth and fast! Spend more time managing and measuring work, less on managing and measuring people.
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