GOTO notes: Thriving on Uncertainty

04/27/13

GOTO notes: Thriving on Uncertainty

Keynote: Beyond Robustness - Thriving on Uncertainty
Don Reinertsen

Variability is Bad (in Lean Manufacturing)
We should minimize variability.
Choosing technologies with low variability (standardization, etc.) works really well in manufacturing. But in software, is that the case? Do we still want to use MS-DOS?

What risk am I insuring against, and what price am I paying for that insurance policy?

Active Robustness - active feedback loops
Deal with uncertainty.
Avoids brute force (adding margin/buffer, etc.)
Mobilize additional resources when/if you need them.
Be aware of context switching costs.
Be sure to monitor the safety margin. Otherwise the entire system can quickly collapse. (Deteriorating margin.) (Catastrophic.)

Economists wouldn’t buy the idea that variability is bad.
Asymmetric payoffs between success and failure (you can only lose what you put in, but your potential gains are much higher) can make variability actually beneficial. Basically, what’s the opportunity?

Nassim Taleb - The Black Swan
Coined the term Antifragile
The opposite of fragility is not robustness. An antifragile system is one that benefits from variability. (A robust system is somewhere in the middle; it has a lot of inertia.)

Fast Feedback
Having an option to shut unproductive paths down at various points based on feedback is valuable.
You can also exploit unexpectedly good outcomes (features that are important to customers, for instance). Note that these opportunities may be very perishable.
Quickly respond to change.
Payoff asymmetries are not accidental; they are a consequence of management choices.
Modern military doctrine - maneuver warfare - Marines
Uncertainty favors the side that functions best in the presence of uncertainty.
The plan is not sacred.
Bypass obstacles; exploit opportunities.
Authority & judgment at low levels of the organization.
Reserves at every level of the organization. Keeps latency low.
Air Force Col. John Boyd’s OODA Loop
Observe, Orient, Decide, Action - how fast you get through that loop matters
(loop closure time) - make the other guy react to your moves

Drive down batch size. Smaller steps. Decompose.
Lean Start-ups get what Lean Manufacturing doesn’t.

Take-Aways
1. Don’t fear variability.
2. Buffer with care.
3. Monitor your safety margins.
4. Focus on payoff functions, not probabilities.
5. Accelerate feedback loops.
6. Buy information in small batches.
7. Think like a smart gambler. (Risk vs. Reward)
8. Create options to bypass obstacles and exploit opportunities.
9. Shut down unproductive paths early.
10. Value good economic choices over conformance.

Books by the presenter
Developing Products in Half the Time 2nd Ed.
Managing the Design Factory
The Principles of Product Development Flow

Indicators of problems with safety margin in software development
Don’t have people work more than 40 hours a week more than one week in a row. (Beck)
How much turnover
How much people are out sick
When a new feature is introduced and it can’t be absorbed gracefully, it indicates that you don’t have enough reserves.


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