In our fast-moving world, customers expect fast results and priorities are constantly changing. Therefore, companies must be able to respond and adapt quickly.
In the middle of the COVID-19 pandemic, my favorite piece of cake inspired me to tell the story of a confectionery shop that was urged to change their product portfolio due to market changes. As I use this story very often to introduce Kanban principles and practices in training and coaching sessions, I also want to share it here.
Grab a piece of cake and read how Kanban principles and practices can be applied to initiate and manage change effectively.
What is Kanban?
The inventor of the Kanban method, David J. Anderson, was on holiday in Japan in spring 2005. Spring is the time of cherry blossom, so he went to see the cherry blossoms in the gardens of the Imperial Palace. Many other people wanted to do the same and there were long queues.
To manage the flow of the crowds, each visitor was given a ticket. If there were no more tickets, admission was paused until another visitor had left the garden. Access to a scarce resource – the garden – was managed by limiting the capacity – the tickets. The presence or absence of a card was the signal whether there was capacity or not. This was a kanban system. The Japanese word “kanban” means “visible signal”.
By using Kanban, a company develops the capability to respond better and faster to changing customer needs and expectations.
We can apply Kanban everywhere in a company where we provide a service and in any situation where people and processes are involved. Kanban is neither a methodology nor a framework. In contrast to Scrum, it does not prescribe events, workflows, roles or responsibilities. Rather, it is a method that is applied to an existing way of working, with the purpose of making that way of working more effective. With that, it is much more than just a board full of sticky notes.
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Why you benefit from using Kanban
Where to apply Kanban
The Kanban method takes inspiration from lean manufacturing in many aspects and was designed for knowledge work. Kanban is not limited to specific industries, products or services and also does not require specific roles, events or practices.
Using Kanban for change management
A friend of mine works for a confectionary shop that sells cakes and a few other bakery goods. She is an expert in producing and decorating cakes for weddings and other celebrations. The shop is a small family-owned business with a stable number of b2b and b2c customers who used to order cakes regularly.
When COVID-19 hit, the market environment changed drastically: The customers came less frequently and the bakery store’s hygiene measures needed to be adapted in order to meet new requirements. This affected the production. Also, the customers demanded more bakery goods instead of cakes. Bread had been sold out several weeks in a row and the bakery realized that they needed to change their product portfolio. To address the change, they took several actions.
When I first heard about their change, I was preparing for a Kanban workshop, looking for an example of how to apply Kanban principles and practices. Because I like cake and think most of their measures relate perfectly to Kanban, a cake-inspired version of the Kanban principles and practices follows:
The six principles of Kanban
Start with what you do now
The team of the confectionery shop was already experienced with baking one type of bread. They used their existing knowledge and capabilities to change their product portfolio from cakes to bread: They simply took their bread recipe and produced more bread of that type. They built on top of what they already did instead of planning a big change, which allowed them to start on the same day and learn fast.
When uncertainty is high, the first step of a change is not always clear. We counter this by building on what is already there.
The first principle of Kanban says: Start with what you are already doing.
Pursue evolutionary change
As the confectionery shop did not want to do a big bang change, they analyzed what they could add to the basic recipe in order to further improve in small steps. So they decided to add some special grains and seeds to their bread, in order to create variations. The customers liked it and some of them also provided feedback on the new products. Some preferred smaller sized breads, for example.
With that, they approached new things in many small steps and learned from their experiences. This is easier to implement than introducing big changes overnight – only to realize at the end that another way would have been better.
The second Kanban principle says: Agree to pursue evolutionary change.
Encourage leadership at all levels
The change in their product portfolio triggered some adaptations in how the team of the confectionery shop works together during the day and how they manage their work. Because team members know best what needs to be changed in production, they encouraged everyone to bring in their ideas and knowledge. Together they owned the process of inspecting and adapting continuously. This led to several actions like transforming their café area into a second production room and adjusting their worktimes.
Change happens when it is initiated and accompanied by someone. When we start with what we are already doing and manage change in many small steps, this does not only concern leadership roles in the organization. Often small or supposedly insignificant observations and suggestions for improvement come from people with no formal leadership roles. After all, through their daily operational work, they know very well what changes can make an impact.
The third Kanban principle relates to that: Encourage leadership at all levels.
Understand customers’ needs
The team used statistics to learn and understand what their customers needed and adjusted to those. They found out that they didn’t sell any cake but three types of bread instead. They also noticed that on Mondays there were fewer customers than on Fridays. Based on this data, they managed their purchasing of ingredients accordingly and were able to reduce waste.
Clients judge services on the basis of various criteria. If a team fulfills them, this leads to satisfaction. So if a team understands their customers better, they can think about their work system from the customers’ point of view and focus on the customers’ needs.
This is what the fourth Kanban principle addresses: Understand the needs and expectations of customers and focus on them.
Manage the work, not the people
Working times and workflow steps changed as the business offered different products and more variation. It became very important to prioritize work and ensure that the system of work is effective rather than ensuring that all team members were utilized.
The team knew best what they needed to do to manage and organize bread production, so the owner of the shop let them self-organize around that work. The shop owner established a pull system and created an environment where people felt safe and motivated to organize themselves and produce value (bread).
The fifth Kanban principle says: Manage the work and let people organize themselves around the work.
Control service delivery through policies
With offering more variations and other types of products, the team agreed on how “type 1” bread should look like to meet their quality standards. They also defined what needed to be done in each workflow step.
Offering new types of bread required change. They had to continuously develop their offering and rules for collaboration. Continuous inspection and adaptation was needed to ensure sustainable results.
The sixth principle says: Control service delivery through policies.
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Why Kanban supports change management
When change is needed, Kanban’s first three principles provide guidance on how to manage change.
Kanban’s first principle relates to the introduction of change. It says: Start with what you are already doing. Approaching new things and learning from the experiences with them is related to an evolutionary approach that is covered by the second principle: pursue evolutionary change. The third principle relates to promoting responsible action in every individual (encourage leadership at all levels).
This is why the first three principles are also called change management principles. The remaining three principles are focused on service delivery and are therefore called service delivery principles.
Kanban core practices
Make work visible
The team followed specific practices that helped them to produce good results. For example, they supported the purchasing and production by visualizing the number of orders from previous days so that everybody was aware of the development and could adjust accordingly. They also reorganized the workspace in a way that allowed them to see what others were doing, which led to better alignment during production and less bottlenecks.
If, for example, too much dough was prepared but not processed further, they were now able to see that the dough was piling up. Waste was also noticeable: Dropped toppings on the floor couldn’t be processed further and also posed the risk of an accident if someone slipped on them.
These visible signs were discussed and the team initiated measures for optimization. Visualizing work and the flow of work allows us to absorb and process a lot of information in a short time. Because everyone involved has the same picture, visualization supports collaboration and helps make better decisions. Visual signals show us when we need to act or where problems occur.
In contrast to the construction of physical products, the inventory is not visible in knowledge work. It’s more difficult to recognize queues or blocked work. A Kanban board can make work visible in this case.
The columns represent the flow of work, from the first step to the delivery of customer value. The work flows through the system and is visualized by means of maps. This allows us to see at a glance where any bottlenecks and overloads occur. Colors and shapes can also be used to additionally visualize different states such as blocked or very urgent work.
Limit work in progress
The confectionery shop only had three ovens, which was enough for producing cakes but not enough for the demand of bread. They needed to limit the work in progress of bread to avoid long waiting times, which would have resulted in quality issues and waste.
Work in progress refers to the number of tasks that are in progress at any given time. Kanban provides an effective work system with focus on the flow of work rather than on the utilization of employees. When resources are fully utilized, there is no idle time in the system and the result is poor flow, just like rush hour traffic on the highway.
In knowledge work, we also encounter the problem of context switching, which can drastically reduce effectiveness. Perhaps you know this: you are editing a text document and a colleague calls. You are pulled out of your thoughts and need a moment after the phone call until you can continue where you left off.
In Kanban, we therefore limit parallel work in order to balance the workload and ensure an even flow of work.
Manage the flow of work
The team was continuously producing bread as they noticed that much time and effort was needed during production – more than they had assumed. Therefore, they decided to measure the time needed for each step in production. After a few weeks, the numbers indicated a bottleneck in transporting the unfinished loaves to the ovens. By reducing transport times and adapting the way of working in the team a bit, they enabled an even flow of work that also had positive effects on an even utilization of the ovens.
The goal of managing the flow of work is to get the job done as smoothly and predictably as possible while maintaining a steady pace. It aims to create value for customers quickly and sustainably.
Limiting parallel work is one of the most important measures in Kanban that helps us to ensure a smooth and predictable flow. To achieve this, we need to monitor and measure the flow of work. This provides us with data that can be used for expectation management, forecasting and improvement.
Make policies explicit
The team made many decisions about the organization of work and how work was done. This referred, for example, to how new work – i.e. orders from customers – entered the system. The definition of when a task is completed and another colleague takes over was clear to everyone involved. Other examples of explicit agreements related to limiting parallel work, guidelines for dealing with tasks of different priority or meeting times.
Everyone involved agreed on policies, including clients, stakeholders and colleagues responsible for the work. In order to keep track of the agreements, the team made them visible and accessible. For example, they printed a checklist that made explicit how to leave the workplace at the end of the day.
A team agreement is a good way to introduce such guidelines at team level. As with all other building blocks of the system, policies need to be reviewed and adapted regularly. Guidelines are not work instructions that describe how work should be done in detail. Setting explicit rules is meant to enable self-organization.
Implement feedback loops
The change in the confectionery shop’s work required regular conversations. To ensure a constant cycle of inspection and adaptation, they provided feedback regularly. They ritualized it by having a short conversation every week for one hour where they discussed numbers, processes, communication and how to improve.
Feedback loops are necessary for coordinated delivery, to improve service delivery and prevent a negative impact on customer satisfaction. The conversations can include sharing relevant information, talking about observations and possible adjustments or planning the strategy for the next quarter.
Kanban refers to feedback loops in the form of meetings as cadences. Feedback loops increase the organization’s ability to learn because they provide a framework for regular inspection and adaptation. Feedback loops can also help to conduct small-scale experiments and learn from them through regular reflection.
Improve collaboratively, evolve experimentally
In the first weekly meeting, the team decided to experiment with a new type of special bread as one team member had some experience with it from their previous job. They got together to plan how they were going to try the new recipe. Then, they offered the product for two weeks to learn how customers responded to it and what they needed to change in production.
The last of the six Kanban practices takes us back to the principles: “Start with what you are already doing” and “Agree to pursue evolutionary change”. Kanban is a method for continuous improvement that we do collaboratively. A diverse team usually comes up with better solutions than a single person. This is partly because different perspectives are taken into account and advantages and disadvantages are recognized earlier.
As a method that is applied to an existing way of working, Kanban embraces change by fostering evolution and learning in small steps while focusing on customers’ needs. With that, Kanban can be used for managing change in many contexts.
By the way, the confectionary shop team successfully transformed their product portfolio and improved their way of working significantly. They still inspect and adapt every day and currently offer 50% cakes and 50% bakery goods.
If you want to learn more about Kanban, agile42 offers an array of Kanban certifications. Learn the basics in our online Kanban course, or dive a little deeper with Kanban System Design (KMP I) certification. If you already have the basics down and want to take your expertise to the next level, Kanban Systems Improvement (KMP II) is for you.