How eDreams ODIGEO climb the Capability Maturity Ladder with Kanban and Flow Efficiency as North Star
During the 1 Week Kanban Coaching Professional MASTERCLASS with David Andersons School of Management in Barcelona we had the great opportunity to meet Peter during the on-site session at ODIGEO. This showed again, that sharing and discussing real practices with real people trumps.
When it comes to everything Lean or Agile, Peter Kerschbaumer starts burning. In front of one of the about fifty-something Kanban boards in his Barcelona based company, he is juggling around with words like Proto-Kanban, Capability Maturity Model Levels and Flow Efficiency ratios.
I’m passionate about building modern organizations that can navigate through the ever more rapidly changing world. Peter Kerschbaumer
But as Kanban Coaching Professional he knows, that the team is the star. For that in account the team members of the about 30 different product teams explained the concepts of their Kanban boards to us and Peter was standing besides, but always in tension.
Flow Efficiency as Key Metric
Peter uses Flow Efficiency as one major success metric for his company. The fact to measure this metric to optimize processes shows a high Maturity Level behavior of his company, as we learned at the Kanban MASTERCLASS. The OMTM (One Metric That Matters) concept, to steering your company with a key metric, is a common tool to get focus on what really matters.
Flow efficiency percentage can act as a powerful Key Performance Indicator or benchmark in terms of measuring overall system efficiency. ¹
Flow Efficiency means the percentage of time we actually work on work items. The Idea of this concept is, that you can’t push your development team to code 3 times faster. But you can optimize your system, to increase the Flow Efficiency from usually 10–20% to 40–60%, to getting things done 2–3 times faster.
How to Calculate Flow Efficiency in a Kanban System?
Calculating the percentage of time stories were being worked on or “touched” versus “waiting” or “blocked”: Wait time is the time a story sits in an inactive or done queue because moving to the next active state is prevented by WIP limits. Blocked time is the time work on a story is impeded, including impediments such as build-breaks, defects, waiting for customer validation etc. The calculation is made by capturing time spent in the “specifying done and developing done” column plus any additional blocked time which we call “wait time”. (Blocked or impediment data is provided directly by the tool we are using). Subtracting “wait time” from total Cycle Time gives us “touched time”. Calculating flow efficiency is simply calculating the percentage of total touch time over total Cycle Time. (Actionable Agile Metrics, Chapter 17 — 271)