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25 NW 23rd Pl, Suite 6314

Portland, OR 97210

Copyright © 2020 by Jonathan Smart

All rights reserved, for information about permission to reproduce selections from this book,
write to Permissions, IT Revolution Press, LLC, 25 NW 23rd Pl, Suite 6314, Portland, OR 97210

First Edition
Printed in the United States of America
25 24 23 22 21 20 1 2 3 4 5 6 7 8 9 10

Jacket Design by Devon Smith


Book Design by Devon Smith and Tamsin Ogilvie

Library of Congress Catalog-in-Publication Data

Names: Smart, Jon, author. | Berend, Zsolt, author. | Ogilvie, Myles,


author. | Rohrer, Simon, author.
Title: Sooner safer happier : anitpatterns and patterns for business agility
/ by Jonathan Smart with Zsolt Berend, Myles Ogilvie and Simon Rohrer.
Description: First edition. | Portland, OR : IT Revolution, [2020] |
Includes bibliographical references and index.
Identifiers: LCCN 2020023325 (print) | LCCN 2020023326 (ebook) | ISBN
9781942788911 (hardcover) | ISBN 9781942788928 (epub) | ISBN
9781942788935 (kindle edition) | ISBN 9781942788942 (pdf)
Subjects: LCSH: Success in business. | Agile project management.
Classification: LCC HF5386 .S6395 2020 (print) | LCC HF5386 (ebook) | DDC
658.4—dc23
LC record available at https://lccn.loc.gov/2020023325
LC ebook record available at https://lccn.loc.gov/2020023326

ISBN: 978-1942788911
eBook ISBN: 978-1942788928
Kindle ISBN: 978-1942788935
PDF: 978-1942788942
Audio: 978-1942788959

For information about special discounts for bulk purchases or for information on
booking authors for an event, please visit our website at www.ITRevolution.com.

SOONER SAFER HAPPIER


o you want to do or are you currently doing an Agile, Lean, or DevOps Trans-
D formation? If so, my best advice is:

Don’t.

Instead, focus on the outcomes you want to achieve. Then you will achieve
agility.
Focus on:

Better Value Sooner Safer Happier

This is the number one lesson I’ve learned after almost thirty years as an
agile and lean practitioner delivering business value through software in the
Age of Digital, from leading Ways of Working at a large, old, global, regu-
lated organization to working with many large firms across different industry
sectors. Together as a team-of-teams, as servant leaders, we experimented,
learned, and pivoted.
Agile, Lean, and DevOps are not the goal. An organization can score highly
on a “How Agile Are We?” test (or worse, “How Much Are We Rigidly Comply-
ing to a Specific Agile Framework?” test, or “How Many Scrum Teams Do We
Have?” test) without producing better business outcomes. I’ve seen it happen
time and time again. The wrong thing can be produced more quickly. Teams can
become feature factories, a self-fulfilling prophecy of backlog replenish- ment
with a focus on “More output!” rather than a focus on better outcomes. In
addition, Agile can be viewed as an IT-only thing, no more than a local optimi-
zation, an agile bubble in a sea of traditional approaches. Or teams can exhibit
cargo cult behaviors, with new labels and rituals but with the same old behav-
iors as before.
Agile, Lean, DevOps, design thinking, systems thinking, Theory of Con-
straints, and so on are all proverbial tools in a toolbox that organizations can
employ to achieve desired outcomes. They are bodies of knowledge, years of
wisdom acquired in the field of organized human endeavor, articulated as
principles and practices. As we’ve seen, they are suited to specific contexts—
contexts that are the new normal in the Age of Digital—as venerable old firms
(the “horses” of a previous age rather than new digital “unicorns”) move on
from ways of working that are more than a hundred years old, originating from
two technological revolutions ago in the late 1800s.

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CHAPTER 1 Focus on Outcomes: Better Value Sooner Safer Happier

Every organization is unique and is a complex adaptive system. Culture


change is emergent. So the interventions chosen need to be applied uniquely in
context. There is no cookie-cutter, one-size-fits-all approach. There is no silver
bullet, no snake oil, no panacea. To know whether the bodies of knowledge, the
principles and practices you’re using, are having the desired impact, you need to
know what your desired outcomes are and keep your eye on that ball. What job
are you using the bodies of knowledge for? What result do you want to produce?
At every organization I’ve worked for or with, those desired outcomes can
be articulated as Better Value Sooner Safer Happier (BVSSH).

What Is Better Value Sooner Safer Happier?

So what is Better Value Sooner Safer Happier? What do the terms represent
and how are they measured? An important point to note is that they are not
only IT outcomes and measures. They apply across organizations, anywhere
work is being done to deliver value. They're about a collective “our business,”
not an us-and-them “the business,” irrespective of job role. In the Age of Dig-
ital every company is a software company directly or indirectly, and there
are few cases where value delivery does not in some way involve Information
Technology.

Befler Sooner
Quality Lead Time,
Throughput,
Flow Efficiency

Happier Safer
Colleagues, Customers, Continuous Compliance,
Citizens, and Climate Agile not Fragile

Fig 1.1: Better Value Sooner Safer Happier

Better is quality. For example, for a software product “better” could


mean fewer production incidents, a faster mean time to recovery, and

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CHAPTER 1 Focus on Outcomes: Better Value Sooner Safer Happier

improved static code analysis measures. For internal audit, “better”


could be less rework of internal reports. For an operational area of
an organization, such as processing payments, transactions, or loan
applications, “better” could be a lower error rate. The lower the “failure
demand,” the lower the cost of keeping the lights on and the greater
the percentage of the budget that can be spent on new value-adding
activities. Quality should be built in, rather than inspected in later.

Value is in the eye of the beholder. It is unique and it is articulated via


quarterly business outcome (also known as Objective & Key Results or
OKRs). It’s why you’re in business. “Value” could be market share,
revenue, units sold, P&L, margin, diversity, carbon emissions, app
downloads, minutes streamed, subscribers, and so on. Value should
cover the perspective of the consumer and producer.
Business outcomes are hypotheses, as we’re in the emergent
domain. They are nested, with a lineage up to longer-term, organization
wide strategic outcome hypotheses (yearly and multi-year). There is fast
feedback with daily releases of value into the hands of customers to test
the hypotheses. The value measures are the KRs in OKR with leading
and lagging measures. Daily, weekly, monthly nested cadences enable
pivoting based on fast learning. Typically there is a monthly cadence
on the quarterly business outcomes to inspect and adapt. With daily
releases of value, it is possible to have daily feedback on multi-year stra-
tegic hypotheses. See Chapter 5 for more on this.

Sooner is flow, which is at the heart of agile and lean. It’s about opti-
mizing for fast and efficient flow of safe value with respect for people.
There are three key measures that can be aggregated up to the organi-
zation level or disaggregated down to the team level:

• Flow efficiency is the percentage of time that work is actively


being worked on during its elapsed end-to-end lead time, as
opposed to waiting to be worked on. It is one of the most important
measures, yet it is rare to find an organization that knows its flow
efficiency for knowledge work. For most large service-based organi-
zations, in my experience, flow efficiency is typically 10% or lower.
This means that work is waiting at least 90% of the time. This is

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CHAPTER 1 Focus on Outcomes: Better Value Sooner Safer Happier

where significant gains can be made. Focus on where the work isn’t,
not where the work is. Focus on the work, not the worker. The wait
time is usually caused by impediments to flow, such as role-based
or time-zone handoffs or multiple committee review steps, leading
to work being queued. A high wait time is also caused by organiza-
tions attempting to do too much work in parallel. The more cars on
the road, the slower they go. Identify and alleviate the impediments
to flow and limit concurrent work in progress.

Let’s Do Work /Lead Time x 100 = Flow Efficiency % Thanks!


This!

WAITING WORKING

Figure 1.2 Flow (In)Efficiency

• Lead time is time to market, the time from starting work on an


item of value to getting it into the hands of a customer. Reduc-
ing lead time enables faster feedback, quicker learning, reduced
risk, earlier monetization, and the ability to pivot sooner to max-
imize outcomes. Lead time is a distribution—typically a Weibull
distribution, a type of continuous probability distribution—that
resembles a normal distribution skewed to the left and with a
long tail. The recommended measure is the 85th percentile lead
time and its change over time.

• Throughput is a count of items of value delivered into the hands


of a customer in a given time period. As lead time comes down,
throughput should go up. If it doesn’t, then flow has an upstream
impediment. Ideally, throughput should not increase directly in
line with reduction in lead time. Instead, some of the time gained
from reducing lead time should be used for innovation, time with
customers, and continuing to improve the system of work, further

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CHAPTER 1 Focus on Outcomes: Better Value Sooner Safer Happier

alleviating impediments to flow. We want to maximize outcomes


with minimal output.

Note that the word “faster” does not appear here. “Faster” can have
negative connotations. A “feature factory” can work fast, churning out
features that no one wants, working harder rather than smarter.

Safer means continuous compliance, agile not fragile, a topic we cover


in Chapter 6. It is about not making the news headlines due to leak- ing
customer data. Safer is Information Security, cyber, data privacy,
General Data Protection Regulation, know-your-client, anti-money
laundering, fraud, and so on. It is Governance, Risk, and Compliance
(GRC). Safer is speed and control, not choosing one at the expense of
the other. Safer is cultural, with a continuous conversation on risk.

Happier is happier colleagues, customers, citizens, and climate.


Improving ways of working is not at any human, societal, or climatic
cost. It is about a more humane, engaging way of working, with
multidisciplinary, empowered teams centered around the customer.
Happier is working smarter not harder; it is improving the system of
work and removing impediments. Happier is obsessing about cus-
tomer satisfaction (which will lead to revenue, rather than a primary
focus on short-term financial measures). Happier is also about social
and climatic responsibility.

Together, Better Value Sooner Safer Happier balance each other. If


Sooner is achieved by working people harder or cutting corners, the result will
be a reduction in Better and Happier.
BVSSH contains two sets of outcomes. Better Sooner Safer Happier
are the how outcomes. They measure the improvement in the system of work.
Value is the what, the business outcome hypotheses that the system of work
produces and that I discuss in Chapter 5. The two sets of outcomes form a
virtuous circle. Improvements in the how leads to improvement in the what
due to faster feedback, the ability to pivot, higher quality, and more engaged
colleagues and customers.
Note that just as I don’t mention “faster,” I also never use the word
“cheaper.” A lesson learned by organizations adopting lean principles and

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CHAPTER 1 Focus on Outcomes: Better Value Sooner Safer Happier

practices in Japan is that “cheaper” is an antipattern. It will create a headwind.


People don’t want to work themselves or a colleague out of a job. It is not a
motivating call to action. Cheaper has negative connotations on quality and
happiness.
Also, a focus on reducing visible costs often increases hidden costs via a
reduction in flow efficiency. There is a hidden cost to cost-cutting. For exam-
ple, introducing more handoffs, communication paths, time-zone challenges,
differing incentivization, and so on all reduce flow efficiency. It increases
the time that work is waiting. This reduces throughput and makes lead time
longer. The system of work becomes less efficient. Learning and pivoting is
slower. The company spends less, but it’s also doing less and has made the
system of work less effective. It’s a double whammy on the ability to generate
value. The organization has throttled back, both with a step change down in
value production and a reduction in the gradient of adding value over time,
due to reduced flow efficiency. This reduces income, which puts further chal-
lenges on cost.
Improving ways of working for product development is about “value-
tivity.” We want to optimize for value and time to learning. Outcomes over
output. We want to maximize outcomes in the shortest time and with the least
output. We want to maximize the value curve, cut the tail, and pivot to the
next value curve. Typically, a focus on “cheaper” has the opposite effect,
making time to value and time to learning longer.
Value

Time

Figure 1.3: Maximize the Value Curve; Cut the Tail

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CHAPTER 1 Focus on Outcomes: Better Value Sooner Safer Happier

ANTIPATTERN 1.1
Instead of cheapness, focus on Better Value Sooner Safer Happier out-
comes and improve the system of work. As lead time reduces and throughput
increases, striving for the highest value in the shortest time, with greater agil-
ity, the “income” in cost-income ratio should improve, all other things being
equal and compared to maintaining the status quo.
If an organization doesn’t have the runway to improve first, or macro driv-
ers (such as a global pandemic), to change the business fundamentals and force
a need to spend less and do less, my advice is to pay very close attention to the
system of work. Don’t increase the hidden costs with a reduction in flow effi-
ciency and a longer time to value and learning. Don’t prioritize cutting costs at
the expense of flow. The result will be increased hidden costs. Do have a focus
on throughput accounting as well as traditional cost accounting.
Now that you have a deeper understanding of Better Value Sooner Safer
Happier, and you are ready to focus on outcomes rather than Agile, we will look
at two of the most important, most fundamental, antipatterns. They gener-
ate a significant headwind. They are detrimental, as they do not apply an agile
mindset to agility. These antipatterns (as with all antipatterns) are approaches
that more often than not reduce the likelihood of achieving desired outcomes.
They make a hard job harder.

ANTIPATTERN 1.1 Doing an Agile Transformation 43

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