by Marcio Sete Flow Efficiency is an incredibly powerful improvement driver. It shows you how efficient the work is flowing through your value stream. The status quo is still around maximising the resource allocation and efficiency. Organisations are too focused on that and they forget to look to the work. The formula to find the flow efficiency is simple: touch time, divided by lead-time, times 100%. It shows you the proportion of time you spend adding value to a piece of work in comparison with the lead time. The commonly observed flow efficiency in traditional organisations is around 15%, which means that, on average, 85% of the time every piece of work is actually idling in queues, accumulating waiting time. That’s rouge! Most of the time, organisations are trying to increase efficiency on the value added time, forgetting that the waiting time, is where we have the biggest room for improvements. By identifying and shifting 25% of the average lead time from waiting time to value-added time, and organisation is literally, in one year, getting back the equivalent of three months of capacity from their entire team. What would you do if you had an extra three months of capacity from your team every year, just by tweaking the way of working? This talk will show you how to increase your flow efficiency by identifying and fixing common sources of waiting time.

1. Flow Efficiency
The most powerful improvement driver
Principal Consultant & Head of Technology Services
marcio.sete@elabor8.com.au
Marcio Sete
@marciosete

2. What Flow Efficiency is
and why to bother
How you can improve itHow you can measure it
@marciosete
1 2 3

3. #1 – WHAT FLOW EFFICIENCY IS
AND WHY TO BOTHER

4. Given my bank account is in credit, and I made no withdrawals recently,
When I attempt to withdraw an amount less than my card's limit,
Then the withdrawal should complete without errors or warnings
Given my bank account is in credit, and I made no withdrawals recently,
When I attempt to withdraw an amount less than my card's limit,
Then the withdrawal should complete without errors or warnings
Given my bank account is in credit, and I made no withdrawals recently,
When I attempt to withdraw an amount less than my card's limit,
Then the withdrawal should complete without errors or warnings
Lead time
Commitment date Delivery date
Waiting time
Touch Time
@marciosete

5. 40%
20%
100%
15%
40%
30%
75%
75%
Work item 1
Work item 2
Work item 3
Work item 4
Work item 5
Work item 6
Work item 7
Work item 8

6. Touch time X 100%
Lead time
Touch time: 2 .
Lead time: 20
10%
Value added time
90%
Waiting Time
The flow efficiency formula
@marciosete

7. @marciosete

8. Why to bother?

9. Flow Efficiency
is a soundboard of
your system of work

10. @marciosete
Effectiveness of organisations’ working time

11. Characteristics of environments with high flow efficiency
Throughput
Predictability
Visibility
Stability
Quality
Learning cycles
Effectiveness
Business Responsiveness
Happiness
Sense of Purpose
Professional Pride
Cost of maintenance
Disruptive variability
Failure rate
Time to recovery
Lead time
Queue time
Time to learn
Burnout / Turnover
Rework@marciosete

12. @marciosete
Effectiveness is the goal

13. Effectiveness
from the outside in
is presupposed
whereas
from the inside out
is contextual and temporal

14. #2 - HOW YOU CAN MEASURE IT

15. You need just two things
1. Lead time
a. Commitment date
b. Delivery date
2. Touch time
a. Dots on card
b. Time spent in status
c. Manual entry in a custom field
@marciosete

16. Two things you need to consider
1. Nature of the work
a. Work item type
b. Class of service
c. Size
d. Priority
2. Granularity
a. Days, hours, minutes
@marciosete

17. Utopian in
knowledge/creative work
100%
0%
15%
40%
60%
Normal
(average system performance)
Commonly observed
(low system performance)
Great
(high system performance)
@marciosete

18. #3 – HOW YOU CAN IMPROVE IT

19. The big five sources of delay
1. Dependencies on shared services, other teams,
specialists or vendors
2. Too much work-in-progress
3. Team liquidity
4. Manual and repetitive work
5. Blockers
@marciosete

20. Principles and practices with great leverage that
might be helpful in your unique context
1. Loosely Coupled Architecture
2. Test-Driven Development
3. Trunk-based development
4. Comprehensive test automation
5. Build, release and deploy automation
6. Feature toggling
7. Continuous Integration
8. Infrastructure as Code
9. Immutable Infrastructure
10. Dev/Prod environment parity
@marciosete
Technical PracticesWays of working
1. Having an autonomous team
2. Limiting work-in-progress
3. Lightweight change approvals
4. Working in small batches
5. Managing flow
6. Making policies explicit
7. Visual management
8. Classes of service
9. Last Responsible Moment
10. Culture of continuous learning

21. Starting the journey...
1. Take a snapshot of your current flow efficiency
2. Host a retrospective
a. Identify sources of waiting time
b. Which are by design, which aren’t?
c. Brainstorm alternatives
d. Formulate initiatives
e. Prioritise the ones will give you the best bang for buck
3. Set a target to motivate change
a. Set intermediate milestones and celebrate each achievement
b. Gamify the process
c. Hold the whole value stream accountable
4. Visualise flow, batch size and variability
a. Make it brutally visible
5. Use dollars to communicate delays
@marciosete

22. “The biggest leverage in improving delivery
rate (often referred to as "productivity") is
not to improve the motivation of the workers,
or to improve the working practices to reduce
the local cycle times in the activity columns,
rather the biggest leverage is to focus on
reducing delays.”
David J. Anderson

23. what I want you
to remember...

24. @marciosete
Effectiveness from the
outside in is presupposed
whereas from the inside out
is contextual and temporal
Flow Efficiency
is the most powerful
improvement driver
The only way of improving
flow efficiency is via
global optimisation
Waiting time
is your
invisible killer
The biggest leverage in
improving delivery rate
is to focus on
reducing delays
Flow Efficiency less than 15%
is very common (and bad);
between 15-40% is normal;
above 40% is great!
Effectiveness
is the goal
Flow Efficiency
is a soundboard
of your ways of working
Flow efficiency
is contextual
to the nature of work

25. Principal Consultant &
Head of Technology Services
https://www.linkedin.com/in/marciosete
https://twitter.com/elabor8
https://twitter.com/marciosete
https://medium.com/@Elabor8
https://medium.com/@marciosete
Thank you!
www.elabor8.com.au
marcio.sete@elabor8.com.au
Marcio Sete