In this article, Kirsi Mikkonen, the change driver at Ericsson R&D Finland, together with researchers at University of Oulu and Technical University of Madrid describes how lean thinking has been introduced in a dynamic software development organisation at Ericsson R&D Finland. The article, which shares practical findings of the study, is based on research conducted to analyse the company’s lean transformation and the difficulties in applying lean to such a dynamic industry.

The interest of applying lean thinking in the software intensive industry has grown significantly in recent years. When compared to manufacturing, where lean originally emerged, software development is more intangible, dynamic and depending of knowledgeable workers whose work primarily involves the use of information. Thus, the nature of software development challenges the applicability of lean ideas.

Our research began with a group of agile coaches in Finland who wanted to create a common set of Ericsson mission statements that were in line with the original lean-thinking systems. The idea was to create a foundation for comparable team-coaching sessions among Ericsson R&D sites. The main motivator for organising these sessions was to help team members to identify strengths and challenges in their respective lean transformations. Defining a concrete set of statements was no easy feat, involving Ericsson R&D agile coaches from Singapore, Italy, Sweden, Germany and Hungary. The final outcome of this process was a unique set of statements that represented the essential aspects of Ericsson R&D’s lean way of working. Some examples of these statements were:

“Lessons learned and practices from inside and outside Ericsson are actively shared, evaluated and further improved within the organisation” and;
“Managers and leaders know the Value Stream Map for the product they are working with.”

What stood out for me personally, was how each team member had a different understanding of these lean statements, which became obvious during the team-coaching sessions. In order to finally share a common understanding, thorough discussion was needed in order to understand the lean concept in a similar way. Summing up these results from several teams gave an overall picture of the transformation status. The following achievements and challenges are based on nearly 20 team sessions in Finland, Sweden and China facilitated by myself. Each team session lasted about 2 hours and had between five and 10 participants.

The decision to go lean

Ericsson is well-known to be one of the most advanced companies in applying lean practices to software development. Furthermore, its R&D unit in Finland is a pioneer within the company in the adoption of lean. Unlike the common belief that a disaster precedes the adoption of lean, Ericsson R&D Finland was not facing a crisis when the unit began its transition. Rather, the unit realised that although its software development processes were satisfactory today, they would be insufficient for the future. People seemed to be complacent with the status quo, and only few challenged current practices. Therefore, management realised it needed to be more critical with its way of working. Four motivators drove the transformation with the purpose of creating a customer-focused, cross-functional and value-thinking organisation, which were to create the most value possible, to improve responsiveness, to build in quality and to empower people.

Kirsi Mikkonen (front right) takes one of her teams through the lean process.

The implementation

The entire software development chain of Ericsson R&D Finland has been impacted by the lean adoption. The lean transition has indoctrinated a profound change of culture and thinking in the unit’s 400 employees, which goes way beyond only processes and tools. Big projects have been substituted with flexible releases. Agile, featureoriented development is used to provide flexibility in managing the product. The development focus is on end-to-end user stories. Continuous integration is also a key element to achieve continuous deployment of small deliveries.

Coding and testing are done in parallel, which has reduced feedback times between traditional test phases from months to weeks. Cross-functional teams have replaced traditional functional silos (system/development/test). The development is conducted in Scrum and Kanban mode. People are the core of the transformation. Personal initiative and self-organisation are encouraged, as opposed to the earlier top-down control. As a result, team members actively decide the practices that work best for them. Moreover, broader competence is valued more than specific narrow competencies.

Ericsson’s five principles to improve

Value and Value Stream: The principle “Everything that we do in the organisation is adding value” guides each activity in Ericsson R&D Finland. Several strategies support this principle in practice. First, the voice of the customer is visible throughout the whole product lifecycle by a network of product owners. Development team members constantly collaborate with product owners in tasks such as grooming the backlog, asking for early feedback, and realising the definition of done.

The lean principle of managing products as a whole is also applied. Release and portfolio management focuses on the big picture, collaborates with other areas and takes responsibility for the product as a whole. Managers use techniques from lean such as value stream mapping for the products they are working with, looking for bottlenecks and acting on the highest priority one. Fostered by a culture of living with uncertainty, the idea of making decisions at the last responsible moment is applied to irreversible decisions, so that options are kept open as late as responsibly possible.

Waste reduction: Contrary to the common understanding that the focus of lean is essentially the elimination of waste, our focus is more on the concept of value and build quality. For example, although managers and leaders encourage the identification of waste, the purpose goes way beyond to just reducing costs. The goal is to challenge the current practice and continuously improve the way of working to enable the highest customer value possible.

Flow and Pull: Three elements are essential at Ericsson R&D Finland for achieving flow. First, the organisational structure has been flattened to remove functional silos. Now information feedback loops between different parts of the organisation are shorter, and unnecessary handovers performed between teams and at organisational levels have decreased.

Second, the Continuous Integration (CI) environment has been optimised. Developers can now integrate code on a second-by-second basis and teams on a minute-by-minute basis. System builds are run daily. The feedback loop between feature/system level testing and coding has significantly improved. Third, work in progress (WIP) has been limited from portfolio management to team level to facilitate flow. At a personal level, people are coached to limit their personal WIP in an attempt to not take on too many tasks at the same time, stay focused, and start and finish meetings on time.

After years of implementing lean, we have realised that transparency is the key factor to making the approach work synergistically. Software development particularities such as challenges in visualising value streams and work items, and development volatility demand continuous collaboration and communication between managers, product owners and development teams. In order to promote transparency, seating and facilities have been completely reformed. Managers and leaders stay close to teams. Managers are seated in the R&D team areas alongside the rest of the development team members. They also apply the principle go-and-see, to make themselves aware of tools, technologies and features the teams are working with.

Perfection: The status quo is challenged in aspects such as organisational needs, assumptions about tools and practices, and personal behaviour. A learning organisation is also a foundation of the company. Team retrospectives, communities of practice gatherings and open spaces are frequently organised in order to challenge current practice, promoting discussions of problems and solutions, and sharing good practices. The purpose is to incorporate as many opinions as possible into discussions. The stop-the-line principle is also promoted. Our experience shows that solving impediments daily with smaller scope and at the right time brings benefits in terms of avoiding making disruptive large improvements.

Respect People: This is a central aspect of the lean company culture. There is trust that all employees are doing their best and can work in an environment where they can do so. Managers and product owners avoid pushing people in a certain direction, but instead empower the team and encourage self-organisation and collaboration. Success depends on teams’ initiative and responsibility. When members have responsibility, they can make decisions faster and speed up the development process. Coaches support and teach staff on how to make decisions effectively while also following up on progress. Groups are also coached to work as a genuine unit and not as individuals.

The challenges

Kirsi Mikkonen

The major challenge was the number of decisions involved in software development, which inhibits the principle of flow. In Ericsson R&D experience, flattening the organisational structure considerably decreases the number of unnecessary handovers performed within teams and between teams. Maintenance work, by default, consists of a constant flow of customer service requests. Through using Kanban, fault handling teams at Ericsson R&D Finland have created flow and significantly sped up their customer request response time. However, it was found that for achieving end-to-end flow in new product development, decision points needed to focus closer to the core of development.

Another point of concern raised was the challenge of dividing up large work items and to limit work in progress, slowing down the smooth flow in development. Regarding the concept of transparency, development teams have a tendency to limit collaboration with other departments and become insular. This lack of collaboration not only represents a risk from the perspective of leading to local optimisations at the expense of the overall system, but also prevents the flow of information and creates discontinuities.

From the team discussion it was also obvious that creating a culture of continuous learning requires time and commitment. A recurring complaint was that it was not easy to find time for change in today’s high pressure markets.

Major achievements

By becoming lean, Ericsson R&D Finland has achieved important improvements in the quality of its product, build times, customer satisfaction, and transparency within the organisation. Teams were found to be highly motivated to work towards becoming lean after realising the benefits the change could have on the unit. The coaching techniques used were effective in providing exceptional results in creating a team culture. Creating a culture of continuous improvement was also found to be easier than creating a culture of continuous learning. Practices which have been used for some time in Ericsson R&D Finland for promoting continuous improvement were valued not only by mature teams that have already interiorised their dynamics, but also by teams starting the transformation. The results of the coaching sessions indicated that new teams using lean and agile quickly embraced a culture of continues improvement as part of their daily routine. However, a tendency was found to focus improvement actions on ‘daily issues’ because it was easier to take actions for improvements in a team scope than to remove mpediments that go beyond team and even organisational borders.

Lessons Learnt

During our journey we learnt some valuable lessons. Kanban and Scrum both proved to be effective methods for guiding lean transformation, creating flow and supporting a lean mind-set. Moreover, experimenting is the real source of learning. Teams need to experience themselves how they cooperate and how lean impacts on them. Only through extensive experience and deep analysis of the specific context is it possible to understand how well the new way of working is tuned into the situation. On the other hand, success depends on teams taking more initiative and responsibility. The more freedom given to the teams, the more responsibility they are prepared to take. When team members have responsibility, they can make decisions faster, speeding up the development process. The experience of Ericsson R&D Finland is that good leadership and coaching is needed to support the Lean mind set transformation. Transforming organisational thinking goes way beyond simply selecting methods and tools and trying to practice them.