Kanban Litmus Test

Posted on July 23, 2014 by David Anderson

Over the years, there has been a commonly recurring question, "Are we doing Kanban or not?" I've always answered that the answer isn't based in practice adoption but is rather a question of intent. Do you have the intent to pursue evoutionary improvement of service delivery using the Kanban Method? If so then you are doing Kanban and if not then you are not.

There is, of course a simpler question, "Are we using a kanban system or not?" At first blush this seems a pretty simple question to answer. We can look to see if you have mapped a workflow and implemented WIP limits across each activity in that workflow to create a pull system. If you have done this then it appears you are using a kanban system, and if not then you are not. The condition of intending to pursue evolutionary improvement of service delivery using the Kanban Method but where you haven't yet implemented a proper kanban pull system across your service delivery workflows, has been labeled "Proto-Kanban" by Richard Turner of the Stevens Institute because it tends to be a pre-cursor state from which a full Kanban implementation emerges.

So it looks like we have this all under control. We understand whether a kanban system is in use based on observing WIP limits, and we understand whether the Kanban Method is in use based on intent. One can happen without the other and vice-versa, though we observe that they tend to go together.

The problem is that I often find people kidding themselves about whether they have truly deployed a kanban system. If a kanban is truly present then work is pulled into the workflow when there is capacity to do so. By implication all upstream work is still optional and commitment is deferred. A full kanban system implementation creates a real options implementation -  the two are inseparable. So to help people overcome the illusion of "doing Kanban" I've created the Kanban Litmus Test. This test is designed to be simple and gets to the real issue of implementing a deferred commitment pull system (using kanban). If you can't answer "yes" to at least one and ideally all three of these questions then you have not properly implemented a kanban system and at best you have some shallow internally facing implementation or proto-kanban.

The Kanban Litmus Test

1. Has the customer interface changed?

Has the way you interact with customers for the work changed? Has the planning and prioritization process changed? Or as we prefer to say with Kanban, have you adopted new approaches to scheduling and selection? If not, if you haven't had to negotiate changes in customer behavior with respect to selection of work, then you are almost certainly not doing Kanban.

2. Has the customer contract changed?

Has the way you make commitments to your customers changed? Have you adopted a service level agreement or set a service level expectation based on a probabilistic understanding of kanban system lead time? Are you using simulation based on statistical analysis of historical data make forecasts and set customer expectations for deliveries of batches of work? If not, then you almost certainly are not doing Kanban.

3. Has your service delivery business model changed?

Have you introduced classes of service based on an understanding of business risks in individual work items? Have you allocated capacity in the system to hedge risks from different sources of demand and different types of work? Are you using qualitative understanding of opportunity cost of delay to facilitate selection decisions and inspire queuing discipline policies for classes of service? Have you aggregated several services together in order to increase system liquidity and enable "haijunka" style balancing of risks and variability? Are you understanding clusters of customer expectations and probing with new classes of service? If not then you are probably leaving a lot of potential value on the table and your Kanban implementation could be a lot deeper and provide a lot more opportunity for your business.

See Kanban Litmus Test Revisited for the updated 4th question

Summary

Perhaps the simplest test we've ever had to determine whether you've truly implemented Kanban - The Kanban Litmus Test: Has the customer interface changed?; Has the customer contract changed?; Has your service delivery business model changed? If you can't answer "yes" to the first and ideally all three questions then you've got a lot more to do. However, the good news is that there is a lot more value to be squeezed from your Kanban implementation if you embrace the power of pull systems, deferred commitment, and real option theory. To deepen your Kanban implementations consider taking training in STATIK - the System Thinking Approach to Implementing Kanban - as part of a Lean Kanban University Foundation Level training, or consider exploring the challenges of limiting WIP and implementing a deferred commitment pull system, through the Advanced Practitioner Level training classes. For details of our training classes visit djaa.com/training or our global training partner classes listed on Lean Kanban University.

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