Combining Lean with Agile

As you explore the intricacies of Lean and Agile in this book, you’ll come to appreciate that each methodology brings a distinct set of principles, practices, and advantages to the table. Across industries, Lean’s strength lies in its ability to reduce waste and optimize processes. Conversely, Agile applies an iterative development and incremental delivery process that emphasizes adaptability, flexibility, and customer-centricity.

But here’s where it becomes interesting. The true magic unfolds when you bring these two approaches together, as described in the next section.

Living in a Lean-Agile house

So far, we have explored Lean and Agile principles and practices in isolation. Now, it’s time to bring them together. To do that, we need to grasp the characteristics that define a Lean-Agile enterprise.

To kick off our introduction, we’ll explore our House of Lean-Agile, as depicted in Figure 1.3. This figure depicts an evolved rendition of the traditional House of Lean .

Figure 1.3 – The House of Lean-Agile

This contemporary adaptation expands upon the foundational principles beyond their Lean origins, providing a visual representation of Lean-Agile management within organizations.

Originating from Toyota and integral to its ascent as a global automotive leader, the House of Lean initially symbolized a steadfast commitment to refining operational processes for optimal efficiency and effectiveness. Our updated model, the House of Lean-Agile, retains this dedication while integrating Agile methodologies, emphasizing iterative changes that incrementally deliver new value to our customers.

Let’s consider each aspect of the House of Lean-Agile.

Establishing a strong foundation

The foundation of our Lean-Agile house represents the key enablers for business success. This includes the following:

• Lifelong learning: Crucial for staying competitive, lifelong learning in a Lean-Agile house prioritizes continuous development for individuals and the organization. By dedicating resources to learning, teams can adapt to market demands, acquire new skills, and drive innovation.
• Building quality in: Quality is central in Lean-Agile houses, with a relentless focus on delivering excellence in products and services. Embedding quality into every development aspect minimizes errors or defects, enhances satisfaction, and builds a reputation for reliability.
• Adapt and evolve: Essential for survival in a rapidly changing landscape, Lean-Agile houses embrace adaptation and evolution. By monitoring trends, responding to feedback, and innovating, organizations stay ahead and remain resilient.
• Minimize waste and constraints: Lean-Agile teams identify and eliminate waste to boost efficiency and productivity. Streamlining processes, reducing complexity, and optimizing resources deliver value to customers quicker, improve quality, and cut costs.
• Five principles of Lean: Offering an optimization framework, Lean principles guide process improvement and waste elimination. The five principles are considered a recipe for improving workplace efficiency and include:
  1. Defining value
  2. Mapping the value stream
  3. Creating flow
  4. Establishing a pull system
  5. Pursuing perfection
• Agile Manifesto: Marking a seismic shift in software development, the Agile Manifesto promoted flexibility, collaboration, and customer-centricity. In Lean-Agile houses, it serves as a guiding philosophy for iterative development, adaptive planning, and problem-solving, extending its applicability beyond software to any domain requiring agility and innovation.

Next, we’ll look at each of the three pillars supporting our Lean-Agile house.

Supporting pillars in our Lean-Agile house

While the foundation provides the strength to uphold our Lean-Agile house, we require a framework to bolster the functionality of our organization. Our Lean-Agile house consists of three primary pillars for this purpose.

Pillar 1 – respect for people

In the Lean-Agile enterprise, respecting people is more than a lofty ideal; it is a pivotal force propelling organizations toward excellence. Respect for individuals and teams is critical because if they are unhappy, they may disengage, leave, or even sabotage the organization’s efforts. This fact underscores the significance of cultivating a culture of respect and recognition within Lean-Agile environments to ensure sustained productivity and success.

Fostering a work environment that values and respects every individual’s contribution is key to cultural change. It focuses on creating a positive, safe, and performance-driven culture where trust and respect form the foundation.

The following three areas are fundamental in demonstrating respect for people within the Lean-Agile organization:

• Understand and respect others: Both Lean and Agile stress the importance of understanding and respecting others while fostering collaborative environments. Embracing diverse skills enriches teams, while detractors undermine value and hinder performance. Lean-Agile prioritizes lifelong learning, quality, and waste reduction for competitiveness, guided by continuous improvement and customer-centricity principles.
• Develop people: In Lean and Agile, developing people fosters continuous improvement and adaptability. Empowering individuals enhances problem-solving, innovation, and value delivery, enabling swift responses to change and success in dynamic environments. Individuals take responsibility for their development, encouraged by principles of continuous learning and personal growth, aligning with Agile’s collaborative, iterative nature.
• Foster trust and employee engagement: Trust and engagement are crucial in Lean-Agile, facilitating teamwork and innovation. Effective collaboration and change acceptance enhance productivity and satisfaction, while engaged employees drive organizational goals and continuous improvement. This culture of empowerment, central to Lean-Agile, enables self-organized teams to deliver high value to customers.

In conclusion, it should be evident that the value of respect extends beyond mere courtesy. It serves as a strategic core value in Lean-Agile organizations, cultivating an environment where continuous improvement and collaboration are encouraged and expected. Embracing respect as a core value is essential for any organization aspiring to thrive in today’s fast-paced, ever-changing world.

Pillar 2 – optimize flow

Efficient flow is essential for any Lean-Agile organization striving to deliver value to its customers effectively and continuously. In this subsection, we’ll explore the three key strategies for optimizing flow within the organization. By organizing around value, ensuring uninterrupted flow, and decentralizing execution, organizations can streamline their processes, reduce waste, and enhance overall efficiency.

• Organize around value: Organizing operations around value entails aligning production resources according to value streams, mapping out workflows, and identifying areas for improvement to streamline processes and enhance efficiency
• Make value flow without interruption: Adopting pull-oriented production control systems prevents excess work and bottlenecks while identifying and eliminating constraints ensures a steady flow of value by removing obstacles and avoiding unnecessary work-in-progress
• Decentralize execution: Decentralizing decision-making empowers teams to respond swiftly to customer needs and market changes, fostering agility and adaptability to maintain an efficient flow of value

In conclusion, optimizing flow is integral to the Lean-Agile organization’s ability to deliver value to customers efficiently and continuously. By organizing around value, ensuring uninterrupted flow, and decentralizing execution, organizations can streamline their processes, reduce waste, and enhance overall efficiency. Embracing these principles allows organizations to adapt and thrive in today’s dynamic and competitive business environment.

Pillar 3 – continuously improve (Kaizen)

At the heart of Lean-Agile philosophy lies the commitment to continuous improvement, known as Kaizen. This section explores the principles of ongoing, iterative, and incremental development, which are central to driving organizational growth and success. By embracing the concepts of "Go and see" (Gemba), iteratively improving, and enhancing productivity while reducing costs, organizations can continuously evolve and adapt to meet the ever-changing needs of customers and markets.

• Go and see (Gemba): Gemba, or “Go and see,” underscores the importance of firsthand observation in understanding the work environment, identifying inefficiencies, and fostering collaboration with frontline workers to optimize workflows and enhance productivity
• Iterative and incremental improvements: Lean-Agile philosophy embraces iterative improvement, encouraging small, incremental changes based on feedback and experimentation to adapt quickly to changing requirements and drive continuous innovation and value delivery
• Improve productivity and reduce cost: Lean-Agile organizations prioritize improving productivity and efficiency through process optimization, waste elimination, and non-value-adding cost reduction measures, enabling accelerated delivery of high-quality products and services while maximizing resource allocation and maintaining competitiveness

In conclusion, the commitment to continuous improvement, embodied by the principles of “Go and see” (Gemba), iterative improvement, and productivity enhancement through waste elimination, lies at the heart of the Lean-Agile philosophy. By embracing these principles, organizations can evolve and adapt to meet the ever-changing needs of customers and markets, driving sustainable growth and success in today’s dynamic business environment.

Finding shelter in our Lean-Agile goals

The roof of the Lean-Agile house embodies the core goal of organizations adopting Lean-Agile practices: maximizing customer value, ensuring high-quality products and services, minimizing waste and non-value-adding costs, and optimizing speed and feedback:

• Organizations prioritize value creation by understanding customer needs, refining offerings, and delivering exceptional customer experiences to enhance customer loyalty and market competitiveness
• Quality is paramount, encompassing reliability, performance, and customer satisfaction, fostering trust and differentiation from competitors
• Minimizing waste and costs through streamlined operations and resource allocation enhances efficiency and innovation, sustaining competitiveness
• Speed and feedback optimization enable organizations to deliver value swiftly, adapt to market changes, and maintain a competitive edge

In summary, the Lean-Agile house’s roof represents organizations’ overarching goals, driving sustainable growth and customer satisfaction. These objectives lay the foundation for subsequent Lean practices and align closely with Agile values, which we’ll explore further in the next chapter.

In the next section, we’ll explore the business and product improvement principles upon which the House of Lean-Agile is built.

Synthesizing modern management principles

In exploration of modern leadership principles, the authors of this book humbly recognize that these ideas were not born of our own invention. Instead, they draw inspiration from the wisdom and innovations of esteemed predecessors. This list, while not exhaustive, provides examples of the following Lean-Agile leadership principles:

• Agile and Lean influence: Inspired by Agile and Lean philosophies, we embrace adaptability, collaboration, transparency, and continuous improvement. These principles reflect Agile and Lean mindsets, prioritizing response to change, valuing individuals, optimizing value flow, and fostering a culture of learning and efficiency.
• Team of Teams approach: General Stanley McChrystal’s Team of Teams approach to work emphasizes decentralization and empowerment, aligning with our mission-driven autonomy principle. This approach empowers teams with clear missions and decision-making authority, fostering collaboration and responsiveness organization-wide.2
• Flow economics: Don Reinertsen’s flow economics and batch size reduction insights resonate with our focus on optimizing value flow and embracing complexity. By prioritizing flow efficiency and economic trade-offs, leaders can enhance organizational competitiveness.3
• Flow Framework: Mik Kersten’s Flow Framework guides the management of flow amidst digital disruption, shifting from project-oriented to product-centric views. By applying this framework, leaders navigate digital challenges, optimizing value flow in their organizations.4
• Leader-Leader model: David Marquet transformed a demoralized crew into an empowered, motivated fighting force. He replaced the military’s traditional “leader-follower” structure with a “leader-leader” model that gave crew members autonomy over their work. The crew learned to think and act proactively, determining what was needed and the best way to do it rather than waiting for detailed directions.5
• Knowledge creation: Ikujiro Nonaka’s focus on knowledge creation aligns with our shared vision principle. By fostering openness and knowledge sharing, leaders enable innovation and adaptation within their organizations.6
• System management: W. Edwards Deming’s emphasis on active system management aligns with our adaptive empowerment principle. Leaders empower teams while guiding the overall system, promoting proactive problem-solving and continuous improvement.7
• Embracing complexity: This principle acknowledges the complexity of modern challenges, resonating with insights from thought leaders. Leaders encourage creative problem-solving, avoiding oversimplified solutions.

In summary, these Lean-Agile leadership principles offer a comprehensive approach that embodies the core philosophies of Agile and Lean, enriched by the insights of leadership pioneers. By implementing these principles, leaders can adeptly navigate the complexities of today’s business landscape, empower their teams, and foster continuous improvement. This positions their organizations for success in an interconnected and rapidly changing world. Our Lean-Agile Leadership principles reflect the collaborative evolution of leadership thinking, shaped by the contributions of great minds and a shared pursuit of excellence.

Integrated practices for enhanced effectiveness

This subsection briefly introduces the importance of combining Lean and Agile, highlighting the intrinsic synergy that exists between these practices. While each methodology is robust in its own right, its integration elevates organizational effectiveness and responsiveness to new heights. It’s not about replacing one with the other; it’s about harnessing the strengths of both to create a harmonious and highly efficient culture within your organization.

Introducing the BLAST and BASE frameworks for Lean-Agile transformation

Elevating your understanding of how to integrate Lean and Agile practices at both the team of teams and enterprise levels, we’ll introduce two key strategies later in this book: BLAST and BASE.

Chapter 8, Implementing Basic Lean-Agile Solutions Teams (BLAST), describes a framework designed to help organizations coordinate the activities of multiple teams involved in product or service delivery, planning, or working on resolving a complex business problem.

These teams may employ both Lean or Agile practices as the situation demands, but the real essence of the BLAST framework lies in establishing a collaborative structure between multiple teams. Here, teams learn to work together seamlessly, driving continuous improvements to enhance the value generated through the organization’s products, services, and business systems.

Chapter 9, Defining a Business Agility System for the Enterprise (BASE), is a conceptual model and pattern language that integrates Lean and Agile practices at the enterprise level, enabling organizations to integrate, coordinate, and synchronize work across the entire enterprise. By embracing BASE, businesses can foster continuous improvements across product life-cycles, delivering customer-centric solutions with agility and innovation.

BASE doesn’t add new roles or responsibilities. Instead, it provides a framework to align product development, delivery, and support activities to meet your customers’ needs. The goal is to simplify, creating a product life cycle model that largely maintains the organization’s existing roles and functions. However, the BASE framework integrates Lean and Agile principles to consistently deliver new value in a predictable pattern repeatably.

Since we’ve introduced the terms framework and pattern languages, let’s define them in the context of Lean-Agile principles and practices.

Defining a Lean-Agile framework

A Lean-Agile framework provides a structured and comprehensive set of guidelines, principles, and practices that provide a foundation for organizing work, decision-making, and processes within an organization. It typically offers a high-level structure that helps define roles, responsibilities, and the flow of work.

For example, Lean-Agile frameworks, such as the Scaled Agile Framework (SAFe), Disciplined Agile (DA), Scrum@Scale (S@S), NEXUS, or Large-Scale Scrum (LeSS), offer a structured approach to scaling Agile practices across larger enterprises. Like BASE and BLAST, these frameworks establish a common language and a structured approach for teams to work together cohesively while adhering to Lean and Agile principles.

However, BASE and BLAST differ in their ability to align the work of multiple Lean and Agile teams to continuously deliver new increments of value following your organization’s unique business practices, roles, responsibilities, domains of knowledge, and terms.

Defining a Lean-Agile pattern language

In our Lean-Agile methodology, a pattern language offers a carefully selected collection of proven practices to tackle recurring challenges within specific contexts. It provides adaptable patterns, each containing practices aimed at addressing identified problems and leveraging associated benefits.

These context-specific patterns can be tailored to meet project, team, or organizational needs while maintaining alignment with Lean and Agile principles.

For example, BASE and BLAST provide structured approaches to delivering value increments through products and services, following a cadence of minimum valuable increments (MVIs) and minimum valuable releases (MVRs). These approaches can be tailored by organizations to fit their unique industry and business requirements.

In summary, while Lean-Agile frameworks offer top-down organization and scalability, pattern languages provide bottom-up flexibility and context-aware solutions. Both are invaluable in Lean- Agile, with frameworks offering structure and guidance and pattern languages providing adaptability.

Now, let’s shift our focus to prioritizing improvement activities. Organizations must strategically allocate their limited resources to activities with the highest impact, a topic we’ll explore in the next subsection.

Avoiding local optimization with Value Stream Management (VSM)

VSM offers a strategic approach that avoids localized improvements by providing a comprehensive view of your organization’s product delivery process. The issue with focusing on localized solutions is that they may not address the organization’s actual constraints and can have minimal impact. By identifying and prioritizing enhancement opportunities across all areas, you can avoid the common pitfalls of local optimization and significantly increase the value delivered to customers.

VSM provides a powerful framework for examining every aspect of the product life cycle, from concept to delivery. It aligns with the BASE model principles, enabling thorough workflow examination, bottleneck identification, and value creation assessment. Implementing VSM fosters cross-functional collaboration and informed decision-making, paving the way for meaningful improvements.

Before we get into the mechanics of implementing BASE (in Chapter 9), Chapter 4, Driving Improvements with Value Stream Management (VSM), will delve into practical implementation strategies for VSM. You’ll receive a step-by-step guide to leveraging this methodology effectively, including techniques for identifying value streams, mapping them, and pinpointing areas for improvement. By that chapter’s end, you’ll possess the tools and knowledge necessary for informed decision-making that optimizes your organization’s capacity to deliver value.

Now that we understand the importance of integrating Lean and Agile principles for customer-oriented value improvements, let’s explore the cadence of deliveries.

Creating a cadence of continuous value delivery

In Chapter 9, Defining a Business Agility System for the Enterprise (BASE), we’ll learn how to implement a cadence to ensure the regular delivery of new increments of value through products and services. These increments, known as minimum valuable increments (MVIs), may contain improvements that enhance organizational flow or address critical business problems, minimizing waste.

Product enhancements and other business-oriented deliverables can be packaged and deployed within a single MVI, or multiple concurrent MVIs may be in flight - deployed as MVRs, each addressing different product and business needs. This flexibility distinguishes the BASE framework, which allows standalone MVIs to be released independently of others.

The concept of MVIs came about as an expansion on the ideas of ‘minimum marketable product,’ a term coined by Mark Denne and Jane Cleland-Huang in their 2003 book Software by Numbers. The word Valuable is used instead of marketable since not all increments are marketed – many are used internally – and it applies equally to businesses and government organizations.

In the BASE conceptual model MVIs encompass a range of deliverables, including products, enhancements, and improvements to business functions and value streams. Each MVI requires a product owner or value manager to assess and guide release priorities based on value considerations, gathering input from various stakeholders.

In the next section, in Part 2 of this book, we’ll explore how VSM provides the methods and tools necessary for making value-based determinations.