Slide deck from my talk on Lean at Cisco: Lessons Learned from Lean Product Development and Lean Startup. The 3 lessons I talk about are: 1. Reduce Batch Sizes and Manage WIP Limits 2. Customer Development 3. Learn to see Waste I gave this talk at the Clayton Hotel on June 21 2012, at a Lean Startup Event organized by Enterprise Ireland and ITAG.

1. Lean at Cisco: Lessons
Learned from Lean Product
Development and Lean Startup
Ken Power
Internal Agile-Lean Coach/Consultant, Cisco Systems
Thursday June 21, 2012
Lean Startup Event Organized by Enterprise Ireland and ITAG
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2. January 2008! December 2009! August 2010! June 2011! May 2012!
Formal Agile Portfolio
Transition Agile Office Culture and Management Ongoing
Pilot Projects Program Established Mindset across the continuous
Launched Business Unit improvement
2008 2009 2010 2011 2012 2012+
• First agile pilots • More Teams • Commitment to • Support teams in • Synchronize all • Create Flow
• Agile Projects • Agile Program sustainable and innovating and products across through the
• Organic Growth Management sustained agility developing the the BU Organization
across the BU • System Wide • Broad processes that • Problem solving • Continue to Lead
through ground- Focus Organization are right for them and obstacle through
up pilot projects • Formal Training Focus • Expand adoption removal at an Innovation
Plan • Focused across product org level • Focus on Teams
Stakeholder areas • Organization and Culture
• Formal Exec
Support Engagement • Lean Startup Learning • Refine and
• Closer Customer principles • Quantify and Improve
• Broader
Stakeholder Engagement • Improve reduce Technical • Build on
Engagement • Investigate Lean capability of Debt Organization
• Lean Thinking Startup organization • Agile Learning
approaches • Develop Portfolio Architecture • Sustainable
• Lean Principals
Management • Eliminate Waste Organization
Concepts
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3. • My day job
Co-Founder, Agile Office at Cisco
Internal Agile-Lean Coach/Consultant
• Extra-curricular activities
Fellow of the Lean Systems Society (http://LeanSystemsSociety.org/)
Award-winning publications in Agile and Lean product development
Frequent speaker at major international Agile and Lean conferences
Involved in organizing international Agile and Lean conferences
Industry/academic collaborative research on Lean software development with Lero, UL, NUIG
PhD research in Lean product development (NUIG)
Agile-Lean Galway Meetup (http://www.meetup.com/Agile-Lean-Galway/)
Blog: http://SystemAgility.com/
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4. http://SystemAgility.com/publications/
http://SystemAgility.com/events/
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5. The fallacies that
cause delays,
undermine quality,
and raise costs
D.#G.#Reinertsen,#“The$principles$of$product$development$flow$:$second$genera8on$lean$
product$development”.#Redondo#Beach,#Calif.:#Celeritas,#2009.#
#
#
S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#
Review,#vol.#90,#pp.#84G94,#May#2012#
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 5

6. #
S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#
Review,#vol.#90,#pp.#84G94,#May#2012#
Myth 1 High utilization of resources and people will improve
performance.
Myth 2 Processing work in large batches improves the economics of
the process.
Myth 3 Our plan is great; we just need to stick to it.
Myth 4 The sooner the project is started, the sooner it will be
finished.
Myth 5 The more features we put into a product, the more
customers will like it.
Myth 6 We will be more successful if we get it right the first time.
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7. • Lean Startups are based on three trends
Use of free and open source software
Application of agile software development methods
Ferocious customer-centric rapid iteration, as exemplified by the Customer Development process
• Sometimes described as Lean Thinking applied to the entrepreneurial process
• Equally applicable to large organizations – different challenges
http://theleanstartup.com/
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8. • Entrepreneurs are Everywhere
http://theleanstartup.com/
• Entrepreneurship is Management
• Validated Learning
• Innovation Accounting
• Build-Measure-Learn
!
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9. © 2010 Cisco and/or its affiliates. All rights reserved. 9

10. #
S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#
Review,#vol.#90,#pp.#84G94,#May#2012#
Total Cost
Optimal Batch Size
Cost
Holding Cost
Transaction Cost
Batch Size
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11. #
#
S.#Thomke#and#D.#Reinertsen,#"Six$Myths$of$Product$Development,"#Harvard#Business#
Review,#vol.#90,#pp.#84G94,#May#2012#
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12. © 2010 Cisco and/or its affiliates. All rights reserved. 12

13. Product
Extended Customer Trials
Early
Customer
Engagement
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14. © 2010 Cisco and/or its affiliates. All rights reserved. 14

15. “
Views expressed by Tom & Mary Poppendieck and Taichi Ohno
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16. • Extra Features
• Delays
• Handoffs
• Extra Processes / Relearning
• Partially Done Work
• Task Switching
• Defects
• Unused Employee Creativity
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17. “
James Womack
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18. “
Eric Ries, The Lean Startup. (page 274)
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19. © 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 19

20. © 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 20

21. “
Credo of the Lean Systems Society (http://leansystemssociety.org/credo/)
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22. • Do not just focus on building great products or
providing great services
• Focus on developing great people and building
great teams
• Build great organizations that appeal to people’s
sense of intrinsic motivation
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23. Thank you.