Product development efforts must balance risks and opportunities over time. To do that, each team must learn how to quickly deliver a barely adequate, minimum viable product so that first mover advantages can be exploited. Any business that fails to achieve this target may not get another chance. Endeavors encounter trouble regardless of the direction of their miss, either by failing to provide sufficient value to their launch customers, or by accumulating excessive inventory valuation that ends up never being realized because they missed their delivery target.
Once offerings are placed into service, resources will need to be allocated to improve the quality and functionality of the product. These improvements become the focus of subsequent iterative cycles which will refine, shape, and extend the value of the solution for a broader range of customers. As figure 1 shows, the size of the batches packaging this value has a direct relationship to the holding costs for the business. These holding costs are a function of the availability of the information, material, and resources necessary for implementation.
As an example, in Managing the Design Factory, Don Reinertsen highlights how such batch size tradeoffs can play out in protracted test cycles:
Let us define the batch size of our testing process to be the amount of design work that we complete before we start testing. The largest batch size would be waiting for the entire design to be complete before we start the test. This will minimize the number of tests, but we will discover our defects very late in the design process, when it is expensive to react to them. In contrast, if we test a partially complete design, we deliver the information associated with the test earlier. Our problem is to balance the cost of extra test cycles against the cost of making expensive changes late in the design cycle.
Faster iterations enable multiple efforts to search for value in parallel within the decision cycles framed by their circumstances. Time-boxing of these iterations facilitates the exploration of more alternatives within a given timeframe, and provides opportunities for more effective evaluations to be performed earlier, to determine which ones are worth saving, so the rest can be pruned out without a lot of collateral damage. These adaptation tactics form an essential practice for businesses which enables convergence on fitness for use through incremental cycles of learning. This convergence is effective even when performed within a constantly changing environment, as long as the team's agility is faster than the pace of environmental change.
In the initial iterative cycle, the initial conditions, transformations, and context may all be flawed, but it is necessary to be able to tell the difference. We would like to be able to reduce uncertainty and improve our projections of the work to go until our original commitments will be achieved; the earlier and more frequently we obtain information about that target and our path towards it, the better off we will be.
As products come and go, those that glitter may not subsequently be found to contain gold. The evaluation of opportunities must be adequately framed, so that evaluation and prioritization can be performed competently. Implementation then requires a series of transformations across multiple planning horizons, disciplines, organizations, product breakdown structures, and work breakdown structures. Control of batch sizes is critical to enable feedback to be incorporated with each cycle of these transformations. Erhardt Reichlin, author of The Art of Systems Architecting, describes this progressive elaboration as follows:
Stepwise refinement is the progressive removal of abstraction in models, evaluation criteria, and goals. It is accompanied by an increase in the specificity and volume of information recorded about the system, and a flow of work from generalized to specialized design disciplines. Within the design disciplines the pattern repeats as disciplinary objectives and requirements are converted into the models of form of that discipline. In practice, the process is neither so smooth or continuous. It is better characterized as episodic, with episodes of abstraction reduction alternating with episodes of reflection and purpose expansion.
Since the value of information uncovered during this pursuit quickly decays, it must be acted on quickly. While more information seems preferable to less, in practice, information is only trusted in decision-making when it is accurate, meaningful, and relevant to the situation. The groups responsible for accomplishing this stepwise refinement need sufficient capacity to respond to latent demand, while having effective channels to return work packages that are not sufficiently developed for realization.
- what do the stakeholders need?
- what functions must a solution provide, and how well must it provide them?
- how will such characteristics be be realized?
- how likely will these characteristics be achieved within the negotiated resource bargain
The discipline of triage is essential to close any gaps discovered between the identified problem and solution spaces, and establish situational awareness for aligning the viewpoints of design, production, and support systems.
OODA loops have proven to be effective constructs to shape a cyclic set of activities for organizing the pursuit of agility over these cycles. Chet Richards positioned this framework as a strategic framework for progressive alignment in the face of constant change:
Strategy is a mental tapestry of changing intentions for harmonizing and focusing our efforts as a basis for realizing some aim or purpose in an unfolding and often unforeseen world of many bewildering events and many contending interests.
Each cycle of iteration conceptually can be divided into 4 phases:
Orientation is the process of performing a situational assessment, through perceptions of actors, objects, and events operating within a context, and comprehension of their collective intentions. helpful to use a set of organizing questions to help shape the scope of the endeavor, and begin to establish connections between actions and consequences. Nearly all observations will be mixture of objective and subjective assessments; context, feedback, and an innate "feel" for situations, people, and events influenced by variables that are outside the subject's control.
Observations are collected by actively acquiring information from a primary source. Observation in philosophical terms is the process of filtering sensory information through a mental process. In science, observation additionally involves the recording of data via the use of instruments. The underlying goal of both activities is to synthesize a mental operational definition that is grounded in facts and whose meaning is consistent with observations. There is sometimes a question in data processing as to where "observing" ends and "drawing conclusions" begins, though the boundary typically involves recognizing intensions, and evaluating options for aligning behaviors and intentions. Casual analysis can be helpful, if time permits.
Decisions require appropriate framing for balanced trade-offs between target outcomes, time, resources, and risk. A major part of this decision-making involves identification and analysis of a finite set of alternatives that can be evaluated using a limited set of criteria. The speed within which decisions must be made is likely to determine the decision process involved; decision methods such as that used by the military are thorough but time-consuming. When the observer is the decision-maker, this task might vary according to whether the decision must be made intuitively or intellectually. If the latter, one must rank these alternatives in terms of how they are perceived to impact target outcomes, both in isolation, and as interactions between the criteria when all are considered simultaneously. When decisions instead are to be made by a group, adoption of a more formal decision process should be considered.
- Taking Action
Actions are necessary to establish momentum, and begin achieving progress towards objectives. In military operations, the objectives are sent as an operations order. The sooner one can begin getting started, the faster one can begin learning. Of course, one can't initiate just any action; it must be purposeful, conscious, and focused on making progress. Tyler Cowen stresses the importance of taking action even in the face of limited data:
The more information that’s out there, the greater the returns from just being willing to sit down and apply yourself. Information isn’t what’s scarce; it’s the willingness to do something with it.
As Kyle Eschenroeder says, "we need to rebalance our appreciation for the power of action with our tendency to overthink, over-plan, and otherwise waste our energies in abstraction."
The work of Fernando Flores has been instrumental in guiding how to transform an existing chain of transactions into a lean and efficient set of organizational capabilities through learning. The pace of this learning depends on how quickly and effectively provider and customer concerns about the necessity and sufficiency of provided capabilities:
A process can be improved if it can be understood; it can be understood only if it has a consistent structure [Senge 1990]; and its structure can be consistent only after the first steps of process improvement have reduced process variability... Many processes exhibited such broad variation in behavior that it was difficult for process specifiers to agree on a process that represented the typical scenario. Many organizations informally built process specifications from anecdotal process experience instead of developing the baseline process model with empirical models and data. Many organizations... created an ideal specification instead of capturing empirical practices, and organizations used these specifications as a baseline for improvement despite the mismatch. Because many process specification models were divorced from empirical practice, they could not reliably drive real development practice.
Organizations can track the effectiveness of their decision-making by measuring the momentum at which benefits are being realized from investments, rather than by measuring the velocity of the teams who are doing the work. Preparation for this realization capture requires orientation of both the context of customer concerns and the utility of solutions being deployed by service providers. Negotiation transitions through an explicit set of states.
Speed is the critical discriminator between groups with sustainable, exemplary performance and those who just get by. Those just getting by are condemned to a death by a thousand cuts.