How can we be more efficient? What’s holding us back from delivering great customer value, sooner?

These are pivotal questions shared by all success-driven product managers.

Productivity rises with the improvement of team engagement and working practices.

The greatest leverage in increasing productivity though is focusing on avoiding delays. Eliminating the causes that block our work and accumulate waiting time is the best way of getting more done, with less effort.

As Daniel Vacanti says in Actionable Agile Metrics for Predictability: ”Any reduction of inactive time will by definition improve overall Cycle Time. Looking at wait time is usually the best, easiest, cheapest area to investigate first for process improvement.”

When trying to trim down on your waiting times, one of the key metrics in Kanban can be of great help – flow efficiency.

The higher your flow efficiency is, the faster and smoother tasks flow through your process.

What is Flow Efficiency?

Essentially, flow efficiency is the ratio between your active time and total time.

It tells us how much work in progress is actually in progress.

To calculate your flow efficiency percentage, simply divide the time you actively spend working with your total cycle time and multiply the result with a hundred.

Kanban board with flow efficiency

Let’s suppose your team needed 10 days to deliver a feature, but has only spent two days working on it. The flow efficiency of that feature would be 20%.

2/10 x 100% = 20%

Not an ideal percentage, but far from bad. Keep in mind it’s not uncommon for teams that are new to workflow management to start with an efficiency in the 15% range. (1)

But in a highly-saturated market where quick turnaround is imperative, mature teams are able to reach 40% efficiency of their flow.

This is considered an optimal target due to the unpredictable nature of knowledge work. (2)

Teams with a flow efficiency in this range have the competitive edge to deliver quickly and consistently.

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Analyzing the Efficiency of Your Flow

Avoiding the causes behind delayed tasks is the key to a higher flow efficiency.

But before you start searching for those bottlenecks, you need to be able to measure your flow efficiency at first place.

Let’s explore how you can design your Kanban board to do this.

Seeing the Clear Picture of Your Process

Whichever project management tool you’re using, make sure you divide the states in your workflow where tasks are being worked on and held up waiting.

This will give you a more realistic overview of your process as you’ll be able to:

  • Uncover bottlenecks more easily. By defining queue (waiting) states, you’ll see where tasks spend time waiting.
  • Put a finger on your efficiency. With queue states clearly visible, you can track how much time you actually spend working.
  • See things as they are. A task shouldn’t stay in a work-in-progress column unless it’s being actively worked on.

The image below gives you an example of a Kanban pull system where the workflow is split into active and queue states. Columns where tasks are being worked on (Development and Testing) are active states while columns where work waits to be pulled are labeled queue states (Done).

Kanban board with Done states

Once you have your queue states designed, and your work starts flowing through, you can analyze the efficiency of your flow. Several tools can help you measure the impact of waiting time.

One of them is the Cumulative Flow Diagram, which can be very helpful in revealing bottlenecks. An expanding band that represents a queue state signals there are too many tasks held up waiting, meaning your team is likely struggling with the demand.

To resolve this bottleneck, you could try allocating more people to work on the tasks in it or reduce the amount of work entering it.

Cumulative flow diagram with queue states

Similarly, you can analyze at a glance how much time a specific task has spent in each one of your queue states with the Cycle Time Scatterplot. Watch out for tasks with longer cycle times, high up the plot. These are usually the best candidates for a closer examination.

Cycle time scatterplot with a bottleneck

By looking beyond the time your work spends waiting, you would be able to expose the factors dragging your productivity down right away.

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How to Amplify Your Flow Efficiency?

While trying to improve their flow efficiency, many companies simply start working on more commitments, hoping it will bolster their production rate.

This, however, is a misconception as more work in progress (WIP) inevitably means more multi-tasking and queuing. Along with an imbalance between demand and throughput, this is in fact one of the most common causes behind high waiting times.

Improving flow efficiency starts with visualizing your wait. Once you’ve identified the tasks with the longest waiting times, think about the reasons behind their delays. Often, you’ll stumble upon a bottleneck along the way.

When you’ve discovered the areas where waiting times could be reduced, you can start designing experiments to cut them down and improve flow efficiency.

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