to Start With
Choosing a value stream for DevOps transformation deserves careful consid- eration. Not only does the value stream we choose dictate the difficulty of our transformation, but it also dictates who will be involved in the transformation. It will affect how we need to organize into teams and how we can best enable the teams and individuals in them.
Another challenge was noted by Michael Rembetsy, who helped lead the DevOps transformation as the Director of Operations at Etsy in 2009. He observed, “We must pick our transformation projects carefully—when we’re in trouble, we don’t get very many shots. Therefore, we must carefully pick and then protect those improvement projects that will most improve the state of our organization.”
Let us examine how the Nordstrom team started their DevOps transformation initiative in 2013, which Courtney Kissler, their VP of E-Commerce and Store Technologies, described at the DevOps Enterprise Summit in 2014 and 2015. Founded in 1901, Nordstrom is a leading fashion retailer that is focused on delivering the best possible shopping experience to their customers. In 2015, Nordstrom had annual revenue of $13.5 billion.
The stage for Nordstrom’s DevOps journey was likely set in 2011 during one of their annual board of directors meetings. That year, one of the strategic topics discussed was the need for online revenue growth. They studied the plight of Blockbusters, Borders, and Barnes & Nobles, which demonstrated the dire consequences when traditional retailers were late creating competitive e-commerce capabilities—these organizations were clearly at risk of losing their position in the marketplace or even going out of business entirely.†
† These organizations were sometimes known as the “Killer B’s that are Dying.”
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At that time, Courtney Kissler was the senior director of Systems Delivery and Selling Technology, responsible for a significant portion of the technology organization, including their in-store systems and online e-commerce site. As Kissler described, “In 2011, the Nordstrom technology organization was very much optimized for cost—we had outsourced many of our technology functions, we had an annual planning cycle with large batch, ‘waterfall’ software releases. Even though we had a 97% success rate of hitting our schedule, budget, and scope goals, we were ill-equipped to achieve what the five-year business strategy required from us, as Nordstrom started optimizing for speed instead of merely optimizing for cost.”
Kissler and the Nordstrom technology management team had to decide where to start their initial transformation efforts. They didn’t want to cause upheaval in the whole system. Instead, they wanted to focus on very specific areas of the business so that they could experiment and learn. Their goal was to demonstrate early wins, which would give everyone confidence that these improvements could be replicated in other areas of the organization. How exactly that would be achieved was still unknown.
They focused on three areas: the customer mobile application, their in-store restaurant systems, and their digital properties. Each of these areas had business goals that weren’t being met; thus, they were more receptive to considering a different way of working. The stories of the first two are described below. The Nordstrom mobile application had experienced an inauspicious start. As Kissler said, “Our customers were extremely frustrated with the product, and we had uniformly negative reviews when we launched it in the App Store. Worse, the existing structure and processes (aka “the system”) had designed their processes so that they could only release updates twice per year.” In other words, any fixes to the application would have to wait months to reach the customer.
Their first goal was to enable faster or on-demand releases, providing faster iteration and the ability to respond to customer feedback. They created a dedicated product team that was solely dedicated to supporting the mobile application, with the goal of enabling that team to be able to independently implement, test, and deliver value to the customer. By doing this, they would no longer have to depend on and coordinate with scores of other teams inside Nordstrom. Furthermore, they moved from planning once per year to a con- tinuous planning process. The result was a single prioritized backlog of work for the mobile app based on customer need—gone were all the conflicting priorities when the team had to support multiple products.
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Chapter 5 • 53 Over the following year, they eliminated testing as a separate phase of work, instead integrating it into everyone’s daily work.† They doubled the features being delivered per month and halved the number of defects—creating a successful outcome.
Their second area of focus was the systems supporting their in-store Café Bistro restaurants. Unlike the mobile app value stream where the business need was to reduce time to market and increase feature throughput, the business need here was to decrease cost and increase quality. In 2013, Nord- strom had completed eleven “restaurant re-concepts” which required changes to the in-store applications, causing a number of customer-impacting incidents. Disturbingly, they had planned forty-four more of these re-concepts for 2014—four times as many as in the previous year.
As Kissler stated, “One of our business leaders suggested that we triple our team size to handle these new demands, but I proposed that we had to stop throwing more bodies at the problem and instead improve the way we worked.” They were able to identify problematic areas, such as in their work intake and deployment processes, which is where they focused their improvement efforts. They were able to reduce code deployment lead times by 60% and reduce the number of production incidents 60% to 90%.
These successes gave the teams confidence that DevOps principles and practices were applicable to a wide variety of value streams. Kissler was promoted to VP of E-Commerce and Store Technologies in 2014.
In 2015, Kissler said that in order for the selling or customer-facing technology organization to enable the business to meet their goals, “…we needed to in- crease productivity in all our technology value streams, not just in a few. At the management level, we created an across-the-board mandate to reduce cycle times by 20% for all customer-facing services.”
She continued, “This is an audacious challenge. We have many problems in our current state—process and cycle times are not consistently measured across teams, nor are they visible. Our first target condition requires us to help all our teams measure, make it visible, and perform experiments to start reducing their process times, iteration by iteration.”
† The practice of relying on a stabilization phase or hardening phase at the end of a project often has very poor outcomes, because it means problems are not being found and fixed as part of daily work and are left unaddressed, potentially snowballing into larger issues.
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Kissler concluded, “From a high level perspective, we believe that techniques such as value stream mapping, reducing our batch sizes toward single-piece flow, as well as using continuous delivery and microservices will get us to our desired state. However, while we are still learning, we are confident that we are heading in the right direction, and everyone knows that this effort has support from the highest levels of management.”
In this chapter, various models are presented that will enable us to replicate the thought processes that the Nordstrom team used to decide which value streams to start with. We will evaluate our candidate value streams in many ways, including whether they are a greenfield or brownfield service, a system of engagement or a system of record. We will also estimate the risk/reward balance of transforming and assess the likely level of resistance we may get from the teams we would work with.