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HOUSTON, TX, USA | 5 – 8 NOVEMBER 2017
#PMOSym
PMO17BR304
Building Integrated Program Teams: A Key to Agile Success
Dr. Eric Rebentisch, Stephen Townsend
MIT Consortium for Engineering Program Excellence (CEPE), PMI
Agenda
• Learning objectives:
– Understand how to apply the integration framework within the PMO to
drive stronger performance
– Identify the key elements associated with effective integration
– See how the integration framework works in actual application
• Review the integration framework and its relationship to agile
• Discuss case studies that illustrate the core concepts of integration in high-
performing organizations
• Identify the integration elements that PMOs can develop in their own
organizations to improve program performance
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SpaceX: High Performing or Over-Hyped?
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Photo by John Schreiber, http://mynewsla.com/business/2016/04/08
How Does SpaceX Do It?
Among other things…
• Focus on simplicity in the design
• Vertical integration across the entire product
• Colocation of teams and value-adding activities
• “Responsible engineer” aligns expertise with mission assurance
• Test-what-you-fly to rapidly introduce new capabilities
• Culture that promotes teamwork, mutual support, coordination and
communication in the spirit of pushing the boundaries
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SpaceX Has Evolved an Agile and Integrated
Development Process Comprising Multiple Elements
• Tools, processes and methods that bring teams together and bridge
boundaries to develop solutions
• Culture of collaboration, sharing and transparency
• Reliance on capable, motivated and empowered people
• Development approach and mindset that emphasizes rapid solution
generation and validation
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Leaders’ mindset of integration, collaboration and velocity informs the values and principles, and eventually practices, models and frameworks
for how SpaceX operates
A Framework for Integrating Key Disciplines in Development
Source: Rebentisch et al (2017)
A four-year research effort identified how successful organizations integrate their disciplines
Integration Reflects Characteristics and Capabilities
Developed Within the Organization
Integration is a reflection of the organization’s
ability to combine practices, tools and
techniques, experience and knowledge in a
collaborative and systematic approach in the
face of different challenges in order to be more
effective in achieving a common goal/objective
in complex development environments.
Adapted from Rebentisch et al (2017)
Processes, Practices and Tools
Processes, practices and tools help to enable integration by:
• Enabling communication and common understanding
• Defining specific work activities
• Establishing expectations of each person’s contribution
• Documenting approaches for coordinating and tracking
work efforts
• Identifying critical points where individual and group
work efforts must come together
• Facilitating problem identification and resolution
• Applying and updating best practices
• Supporting and improving specific work activities Source: Rebentisch et al (2017)
Integration Processes, Practices and Tools in UTC
Sources: Slideshare.net, UTC.com
• 201,600 Employees
• US$57.4 billion Adjusted net sales
• US$3.7 billion Total R&D investment
Organizational Environment
• Organizational structures, behaviors and norms
shape how team members work and interact with
each other, and determine the nature of relationships
• An integrated environment should:
– Narrow the cultural divide between disciplines, roles or
functions
– Foster team building
– Develop respect for each others’ views and opinions
– Build trust between executive management and teams
Source: Rebentisch et al (2017)
The Integrated Organizational Environment at Pixar
Source: http://trailers.apple.com/trailers/disney/toystory3/
Developing Integration Competencies in People
Organizations develop integration
competencies in people by:
• Defining integration competencies using
standards, role definitions and assessments
• Using education and training to develop
integration competencies and teaming behaviors
• Managing integration competencies in the
workforce at the individual and organizational
levels
Source: Rebentisch et al (2017)
Contextual Factors
Source: Rebentisch et al (2017)
• Program and organizational characteristics influence
management approaches
– Product and program design choices that reduce scope
and complexity
– Organizational relationships that foster and enable
integration behaviors
– Stakeholder alignment requires significant management
engagement
• One view of the program
• Transparency
• Engagement/community
Program Performance
• Integration influences key program
performance elements
– Cost and time show better performance
with higher integration
– Outcomes are more predictive with
higher integration
– Programs with schedule pressure are
more resilient with higher integration
Source: Rebentisch et al (2017)
Integration in Practice: F/A-18E/F Super Hornet Program
• The F/A-18E/F program delivered
ahead of schedule, within cost and
under weight (critical for fighter aircraft)
• Dual-purpose carrier aircraft (air-to-air,
air-to-ground combat)
• Evolutionary design derived from the
F-18C/D model
– Increased range, survivability,
carriage capability, growth
capability and bring backSource: US Navy
F/A-18E/F Program Employed a Variety of Integration
Practices ThroughoutIntegration Practices
Integration Processes, Practices and
Tools
• WBS based on the product architecture
• Common central database with weekly
reporting
• WBS linked to EVMS
• Flow-down budgets to the IPTs
Organizational Environment
• Leadership at all levels modeled
integrated behavior
• IPTs bridged functional groups
• Emphasized effective communication
across functional boundaries
• Culture of shared responsibility for
outcomes
People Competencies
• Develop integration competencies
• Leaders selected on experience and
ability to foster relationships
• Decisions made by capable people
where work is performed
Contextual Factors
• Urgent replacement needed
• Program budget was fixed
• Complexity reduced using derivative
product strategy and existing
relationships
• Mature technologies limited overall
program scope
Source: Rebentisch et al (2017)
Rapid and Effective Decision Making Enabled via
Organizational Structure
Product-based work breakdown structure (WBS) was mirrored by the IPT structure
Rapid and Effective Decision Making Enabled via
Organizational Structure
• Decisions were made at the lowest level consistent with scope of
responsibilities (Level 5 team leaders controlled their own budgets)
• WBS and corresponding organizational structure
– Used to track cost, schedule, technical performance measures
(TPMs) such as weight and power at the lowest level of the
WBS (with roll up)
– Same structure used on government side promoted joint
government-contractor problem solving
“Team leaders have to balance cost, quality and schedule. They have to be good business folks as well as engineers. As a Level 5 team leader, I am running my own business.”
Collaboration Across Disciplines Achieved via Active
Management of IPTs
• Moved away from functional stovepipes to Integrated Product Teams (IPTs)
– Each team was responsible for a part of the overall product
– Teams were multi-disciplinary
“We focused our IPTs on product and then asked, ‘What does it
take to deliver the product?’ These are the disciplines that have
to come into every IPT.”
-- Vice Admiral Joe Dyer, former Navy Program Manager
• IPTs were used on the government and contractor sides
– Corresponding structures facilitated joint problem solving and
communication
Collaboration Required a Cultural Change Led by Program
Leadership
“Leadership matters and personalities matter. The vice president for F/A-18 at McDonnell Douglas and I had an openness with one another that we knew we could build on. We knew that we could flow it down to others and that we would both insist on it. There really is a cultural change required. We’re not taught to be team players.”
-- Vice Admiral Joe Dyer, former Navy Program Manager
Effective Information Sharing Enabled via Several
Mechanisms
• A high value was placed on open communications and
quantitative data
• Common central database used by government and
contractor with weekly reporting
– Cost, schedule and technical measures down to Level
5 of the WBS
– Problems in any of these areas were immediately
apparent with clear accountability for who owned the
problem
• A variety of program-wide tools and databases
Integration in Practice: The Failed Engine Stator
• During flight test, a stationary air foil in one of the two GE
engines fractured, causing significant damage to the engine
• An examination of the remaining test aircraft showed
fracturing in other engines as well
“Under the old way of doing things, GE wouldn’t communicate issues until they had a plan to go forward. Now, if there’s an issue we’re [the Navy] the first to know. This actually works to GE’s advantage because we have talented people here who can help.”
“In just six weeks, we went full cycle from having the problem surface to diagnosing it and to installing new parts. All of us—the Propulsion IPT, the Flight Test Team, McDonnell Douglas, and GE—had a real sense of working as a team. Under the old way of doing things, this would have taken five or six months.”
-- Level 2 Propulsion IPT Leader
Agile Transformation at Nationwide Mutual Insurance
Company
• Information technology (IT) plays a vital role in the company’s strategy and in
delivering its On Your Side customer service and protection
– Nationwide spends more than US$1 billion on IT per year (a significant portion spent
on software projects) and employs thousands of IT employees
– Software projects range from small (<US$50,000) to very large (>US$50 million)
– Traditional “waterfall” development finished the majority of projects, but often late
and with quality issues
– Teams using the agile development approach had tremendous success delivering
on-time solutions with high quality levels
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• More widespread agile implementation across IT was needed for significant impact
• But uneven performance was seen across the teams using the agile approach
The Diagnosis: Traditional Project Management
Approach and Mindset Was in Conflict with Agile
• Successful teams had:
– A very disciplined system of rules
– A high degree of collaboration between program managers and software engineers
– An interested and supporting management system
• Unsuccessful teams had:
– A lack of process discipline and an attitude of exclusion
– Contentious relationships with program and project management, which was relegated to the
periphery of the development life cycle
• Conclusion: To transform the software development system, managers had to change
not only their perspective of the development teams’ work, but also their own way of
working
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Key Elements of Nationwide’s Agile Transformation
• Created a formal change program leveraging existing change agents and infrastructure
• Root cause analysis of inconsistent agile execution: a lack of process discipline and an
attitude of exclusion in some teams
• Aligning the program management orientation with the agile development approach
• Creating the Application Development Center (ADC) with a focus on technical
excellence and process discipline
• Creating standard work for managers, including reporting and priorities
• Developing a new set of performance metrics for program managers to track
development progress
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Outcomes of Nationwide’s Agile Transformation (2009–2015)
• Critical defects released into production decreased by 50% per year, every year,
on average
• Employee engagement increased every year
• Productivity levels increased with >75% of releases above industry benchmarks
• Changed mindsets:
– All members of the teams aligned toward a common purpose in delivering great
solutions for customers
– Program management and technical staff no longer adversarial, instead work together to
solve problems
– Culture of collaboration and integration between program management and software
engineering staff
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Ref: Rebentisch et al., 2017
Strategy to Implementation: The BMW Engineering
Division Challenge
• BMW group strategy: continue to grow and remain a strong and
independent auto manufacturer despite being smaller than
competitors
• Engineering (E-) Division requirement: increase efficiency by 1/3:
– Increase the number of development projects by 1/3
– Reduce the development lead time by 1/3
– Improve product quality by 1/3
– Stay within the same budget and staffing levels
– All within five years
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BMW Leadership Approached Change on Multiple Fronts
• E3 Program was established to
transform the E-Division:
– E3: Exhilarating products; Efficient
processes and structures; Emotions and
team spirit
• System approach to change:
– Senior leaders provided the vision and
resources, were personally involved in
deploying the change
– Project management organization (PMO)
managed the change program, provided
resources, change tools and expert coachesSource: Rebentisch et al (2017)
Top-Down E³ Initiatives Addressed Strategic Objectives
• 25 top-down, strategy-driven change projects (E³ projects) were launched in
May 2007
• E³ project managers enjoyed several important enablers for rapid and effective
action:
– Direct access to the top management level
– Supported by a network of strategy and process development groups associated
with different departments within the Engineering Division
– Access to the necessary funding and the right people
– Removing road blocks in the organization when they arose
– Fast decision times
Bottom-Up Initiatives Engaged the Entire Workforce
• “Value orientation” (WO) E³ project developed as “the implementation of E³ at the local
level” or “E³ for everyone”
• The specification of the project was open—from simple ideas affecting office work with no
measurable savings to hardware improvements with millions in savings
• Initially all level 2 and level 3 managers were required to complete a minimum of one WO
project
– ~150 WO projects completed in 2008
– Expanding to level 4 managers, more than 1200 WO projects completed in 2009
– A few managers personally conducted multiple WO projects per year, and required
the managers under their supervision to do the same
Top-Down and Bottom-Up Initiatives Were Complementary
• Bottom-up (WO) initiatives started
slowly but eventually equaled top-
down projects in savings
• Long-term objective was to change
the entire workforce
• E Change LIFE initiative addressed
culture change and was concurrent
with and complementary to WO
initiative
– By June 2012, all 8,000 people in the
E-Division had participated in the E
Change LIFE workshops
Source: Rebentisch et al (2017)
Impact of the E³ Change Program in the BMW Engineering Division
• Total revenue grew by 40%
• 21% more vehicles were delivered
• Vehicle quality increased by 32%
• The model range expanded by 30%
• The number of car models and derivatives in the pipeline increased by 53%
• The engineering workload increased by 35%
• The engineering cost per derivative and workload decreased by 38% and 31%, respectively
• The overall lead time decreased by 14% (despite greater complexity in the models offered)
• Partway through the changes, the global economic downturn punished the auto industry;
because of the improvements, BMW managed to remain profitable, did not cut its workforce and
emerged from the downturn stronger and more competitive than many rivals
Conclusion
• Organizations with higher levels of integration between their management and
technical disciplines showed higher value delivery, more predictability and more
resilience
• Agile change is an essential component of integrated organizations
• Change examples demonstrate the strong role that a centralized organization like a
PMO plays in:
– Developing tools, processes and methods for integration
– Helping leaders create the right climate for collaboration and integration
– Training and developing integration competencies in people
– Providing support for local improvement initiatives
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Next Steps
Based on the integration framework and examples, these next steps may be helpful to you:
• Next week:
– Review the content of this presentation, view the archived PM/SE integration virtual conference
and/or read the Integrating Program Management and Systems Engineering book
• Does your organization integrate different disciplines effectively? What are the current
challenges? What is going well currently?
• Next 90 days: Discuss with representatives from various disciplines their perspective on your current
state of integration to identify problems, their root causes and possible opportunities for improvement.
Enroll senior leaders in the definition of a path forward to more highly integrated programs.
• Next 12 months: Implement pilot projects aimed at improving various elements from the integration
framework; develop the infrastructure to propagate best practices and concepts throughout your
organization and to assess the desired behaviors and extent to their impact.
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Book(s) Captures the Detailed Insights to Help Improve
Engineering Program Performance Outcomes
• Integrating Program Management and Systems
Engineering (Rebentisch et al., 2017)
– Tighter integration between program managers and
systems engineers leads to high-performing programs
– A system approach to combining methods, tools and
organizational systems provides the key to success
• Related resource: The Guide to Lean Enablers for
Managing Engineering Programs (Oehmen, 2012)
– How to apply lean principles to program management
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Contact Information
Eric Rebentisch, PhD
Research Associate, Lecturer
Massachusetts Institute of Technology
77 Massachusetts Avenue (E17-355)
Cambridge, MA 02139-4307 USA
+1 617 258 7773
email: [email protected]
http://rebentisch.mit.edu/
http://cepe.mit.edu
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Stephen Townsend
Director, Network Programs
Project Management Institute
14 Campus Blvd.
Newtown Square, PA 19073 USA
PMI: +1 610 356 4600, extension 7083
Email: [email protected]