The Tangible Value of The “Intangibles”

One of the important aspects of The Kanban Method is Class of Service (CoS). CoS is a risk categorization mechanism for any work item. We identify 4 Classes of Service – Standard, Fixed Date, Expedite, and Intangibles – depending on customer expectation, value and loss of business value identified as cost of delay. For this blog, cards that are classified as Intangible CoS will be referred to as “Intangibles”.

Tangible Value Of Intangibles

Intangibles are those that do not deliver immediate business value but need to done, sometime. A commonly used example of Intangible is code documentation. Most cards that reduce Technical Debt but do not have immediate business value fall in this bucket.

Over the years, I have realized the Intangibles have a significant role to play in a stable Kanban system. Many Kanban practitioners have played the getKanban game. In the early versions of the game, Intangible cards used to be quite inconsequential. Most teams would not pick up those cards for execution because there was no $ value associated with them.

In one of the recent versions of the game, I noticed a new Intangible. In essence, it was about your finishing automation of manual test cases so that subsequent cards could then simply go past the Testing value stream column. Since the test cases were automated, there was no incremental manual testing effort. Such a benefit immediately made teams value these Intangibles and started they got prioritized quickly (almost treated like an Expedite!).

So, while this card by itself did not have a business value, execution of this card would significantly reduce cycle time for other business value cards… and that is value! Suddenly, the Intangible classification of this card did not do justice to the benefit from this card. Such “intangibles” have a “tangible” quantifiable (no of manual testing house saved) value.

Hence, my submission to Kanban teams – spend a thought on your intangibles before ignoring them. They could turn out to be quite valuable if delivered early.

Intangibles can also help manage business expectations better. Let me explain how.

Lean thinking recommends that systems should not be packed to 100% team utilization. The question is – how much utilization should we plan for? The answer is that there isn’t a single number. However, one key factor is requirement volatility. Higher the volatility of work coming into the Kanban system (in terms of size and/or count), the lesser should be its planned utilization to accommodate that volatility.

Most managements struggle to accept this core Lean principle. Management want high utilization. This is where Intangibles help. By having a few Intangibles in a buffer column prior to an “In-Progress” column, you will give the team the flexibility to handle volatility. If you have a sudden spike of value cards, then can hold-off working on Intangibles. On the contrary, if the team has some idle time, they can finish off some of the Intangibles. Have an explicit policy to suspend Intangible cards IF other business value cards are waiting in the pipeline. It’s acceptable to reduce the Flow Efficiency of an Intangible but it will help achieve a higher Flow Efficiency for business value cards. It will improve Cycle Time predictability of business value cards keeping high team utilization.

This approach can be easily extended to strive for uniform cadence across the value stream. If one team is going too fast (and they cannot do much to collaborate with the slowing team – technical/skillset reasons, different vendor team, etc), then they can work on intangibles for some time while the downstream catches up. This is the second best option! The first option is always to help the team with the lower throughout to collaborate with them and help them get fast. However, this is often not easily doable. In these situations, instead of continuing to finish off more business value cards and putting more pressure on downstream teams (generally, that reduces throughput even further), divert part of the upstream team to work on the Intangibles. So, while the overall throughput difference will remain between the value stream stages, at least for all the business value cards, you will reduce the variation in throughput between the stages and get higher overall throughput.

So, plan your Intangibles and give the system flexibility to deliver multiple benefits.

Sudipta Lahiri
SVP- Head of Products, Digité


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