Since releasing my initial article and subsequent LKNA19 presentation on the Skill Liquidity Maturity Model, I’ve been asked by many about ways to identifying additional techniques to manage liquidity at maturity levels 3 and higher.
Given that Skill Liquidity ML3+ assumes the corresponding KMM organizational maturity, you may be ready to leverage a number of practices.
Upstream Kanban - How do we anticipate for a particular skill? To answer this, we need to get visibility to work that is an organization’s pipeline before it has been committed to start.
Cadences - When, how often and with whom do we have a feed back loop to review our approach and make decisions on where to leverage our skills.
WIP Allocations – How do we create a platform to visualize and manage our capacity and skill allocation strategy
Dynamic Reservation Systems – How do we treat work differently based on the risk associated with not having the required capability with the requisite skills available.
Let’s go into these 4 practices in further detail.
Upstream Kanban – How to anticipate?
Upstream Kanban is a way of shaping and understanding all your organization’s demand before it becomes committed for delivery. Upstream Kanban techniques suggest that you treat all demand as options before you commit to their delivery. Since not all demand is equal in need, an outcome of Upstream Kanban is to determine what demand should be considered next to be committed for delivery.
Understanding and visualization - Upstream Kanban typically involves some form of stages of funneling and filtering. This allows us to look for triggers to start thinking about planning for skills. We could look for options that are in the late stages of the Upstream Kanban system. Perhaps one or two stages to the left of the delivery commitment point.
While these options may still be discarded, the discard rate should still be much lower than earlier in the Upstream Kanban process, so planning for skills is likely to be a good bet.
Shaping - You may also consider establishing that sufficient capacity of necessary skills are available as formal pull criteria during your replenishment process. i.e. when deciding what you wish to commit to deliver.
Cadences – Feedback loops.
You will need a number of feedback loops to help define and manage your skill liquidity strategy.
Strategy Review – Matching up your skills to delivery work requires organizations to make trade offs. Some work will be supported more, some less and some not at all (discarded options). For many organizations, particularly at maturity levels 4 and higher, you may have occasional meetings to review strategy. This meeting attended by executives and sr leadership is about assessing your market, determining your strategy and then aligning your capabilities to it. The Strategy Review forms the basis for coherent decision making to allocate the appropriate resources against your strategic intent.
Risk Review – This meeting can help you look for problems that put the delivery capability of a service or multiple services at risk. To mitigate risk, this is a good place to review your organizations liquidity challenges: potentially make changes to allocations, make a reservation (more on this later) or spend resources to acquire skills.
Operations Reviews (OR) and Service Delivery Reviews (SDR) – These cadences review the function of a collection of services (OR) or a single service (SDR). It’s an opportunity to observe the impact of your skill liquidity strategy and make adjustments. It also can provide needed information to the risk and strategy reviews to adjust overall approaches to strategy and risk mitigation.
Resource Allocation – A platform to visualize and manage allocation
You may wish to employ a Work in Process (WIP) allocation model to align with your organization's strategic priorities. Most strategies include a number of goals that are not necessarily equal in importance. These priorities could include such things as: market segment, market life cycle, and innovation horizon to name a few.
Once allocation across these areas have been identified they should be visualized and inspected regularly: an enterprise-level Kanban board could support this. Using this model, liquidity is being managed by ensuring the right trade offs are being made and that your limited capacity of skills are not over allocated to a particular area. Rather balanced against organizational priorities.
If your organization is mature enough, you could enforce WIP minimums and maximums across your strategic dimensions. Total WIP should be adjusted based on an observation of organizational capability as well as WIPs in specific areas based on an understanding of a total inventory of skills available.
Using the Cadences described in the previous section you can then regularly inspect allocation to this model, determine if actions have aligned to the intent and make adjustments as needed.
Dynamic Reservation Systems
In the Upstream Kanban section, I briefly discussed forming skill readiness criteria as a way of demand shaping. That act takes the step to confirm that we have the necessary capabilities to work on something that is about to be committed to. In addition, if you are using Kanban, you may already be using Class of Service (CoS) and WIP limits as an approach to manage work that has been committed to. And this is a pretty good “laissez faire” approach to managing access to capacity without overburdening specific skills.
But what if the work you were about to take on was so critical and delay intolerant, you wanted to ensure that getting access to the right people was guaranteed?
The concept of Dynamic Reservations Systems takes into account that you may want to reserve the capacity of dependent services for these type of situations. Beyond using CoS, you can improve the odds of getting access to the requisite skills in the form of managing capacity through resource allocation (as discussed in the previous section). But while this improves access to needed services and the skills they provide, it still does not guarantee them.
Beyond resource allocation you may wish to have a guaranteed reservation of a particular service ahead of time and by extension the corresponding skill capabilities. In effect ensuring that resources with the specific required skills will be available as embedded parts of supporting services.
Making a guaranteed reservation however can be costly and wasteful, particularly in the form of idle capacity not leveraged for other work while waiting for the reservation to be used. So it is important to only reserve for specific work that is risky enough to warrant paying that price. Only that work which has significant impact of delay or can tolerate little to no margin for error will merit a guaranteed reservation. From a Kanban visualization perspective, consider this to be WIP slots in your system that are kept empty for specific work that hasn't arrived yet.
The Dynamic Reservation System model provides you a spectrum of options, from dynamic class of service decision making, to allocation to guaranteed resource reservation.
Want to find out more?
The concepts of Dynamic Reservation Systems and Allocation are covered in more depth in the training material of the Enterprise Services Planning (ESP) class. You can also find out more about Upstream Kanban and Cadences in the KMPII class and in Patrick Steyaert’s book Essential Upstream Kanban.