As a new associate at a Big 4 Accounting firm, I was shuffled between projects and subjected to whatever ad-hoc project management strategy each team used. Although it was often frustrating, it was also instructive to observe different approaches to audit work. Differences in productivity and effectiveness between teams were stark.
Productivity is the foundation of an audit business. It is the only way to get ahead that doesn’t involve playing zero-sum games with your clients, co-workers, and the firm. Teams that fall behind are faced with the decision to “limit their careers” within their firm or take their chances with random PCAOB audits.
When I started building software for a living, I found that productivity and effectiveness varied even more than in the audit world. Forget “The 10x Programmer”—I saw variances that couldn’t be captured with positive integers. Some programmers could accomplish things that others never could and, in some cases cases, removing a programmer from a team could improve output.
I’m fascinated by the concept of productivity. Reading Getting Things Done marked a life-changing shift in my career and learning about Kanban was another leap. There are many facets of productivity but this article will, appropriately, focus on one thing: minimizing work in progress.
The idea of finishing one valuable thing before moving on to another may seem too simple to warrant discussion. However, I find the concept to be deeply technical, challenging, and counter-intuitive.
This is the most common approach to executing audit work:
This is a valid plan that highlights the dependencies between steps. After all, you must gather evidence before you perform testing. The trouble begins when teams naively attempt to finish step 1 for the entire audit before proceeding to step 2.
The same trap exists in software projects. The most obvious way to think about work is in a series of procedural steps, each one depending on the step before.
By now most development shops recognize “waterfall” flows like these and know of an alternative approach called “agile”. And of course they do “agile”. But still the idea of completing each step across a project before proceeding to the next creeps into most environments.
Developers might insist that product owners document every edge case before they begin working. Product owners may expect the final product to look exactly like the Photoshop mock. Product owners, developers, and designers may all negotiate on deadlines for completing slices of work (e.g. Design sign-off, Feature Freeze). Often stake-holders don’t want to see a feature until it’s “completely done”.
On a smaller scale, the same mental trap grabs hold during software construction. Programmers often tackle large features by breaking them down into steps based on dependencies, building with a bottom-up approach.
More successful approaches begin with the end in mind and derive increasingly granular milestones.
For our audit deadline on February 1st we want an opinion letter saying:
In our opinion the financial statements present fairly, in all material respects, the financial position of Some Company as of December 31, 2016.
How can we get there?
This planning process proceeds top-down until we’ve reached the end of a team’s expertise. Eventually we reach the 60-hour-a-week interns and associates that type and click our tree of audit stories into existence.
Let’s look at a more generic tree of milestones:
When visualizing our work this way we can start to see the fallacies of the batching approach. If we start working in a breath-first manner (first gather all the evidence) we would progress like this:
As we look at this snapshot of progress:
- We have nothing valuable done. If we stop the audit today we have no comfort for our opinion—the same as if we had never started.
- We don’t know if there is any rework ahead. Perhaps we’ve made a mistake that impacts each of these tasks, but we won’t know until we get higher in the tree.
- We’ve only performed one type of work so we can’t predict how long it takes to complete milestones.
- We have 3 in-progress items to keep track of.
Instead we should prefer a depth-first approach.
Now when we look at our progress:
- We have one substantial part of our audit done. If we have enough top level items done at the deadline, we might be able to finish the audit with confidence.
- The knowledge we gained from finishing this branch informs the work we do on other branches. We might do less substantive audit work because can rely on General Controls.
- We’ve learned a lot by exercising one loop of our procedural machine. Any feedback that we got during review can be incorporated into future work. We’re in a better place to estimate how long things take.
drepresent work that we no longer need to think about, track, and organize.
The same risks and trade-offs apply in our software project. If we’ve designed the data-model for all of our features but have nothing that users can interact with then we’re in a bad spot. We carry risk that our data-model is wrong, we miss out on feedback on our process, and we incur the cost of maintaining in-progress work.
Looking at our tree of milestones we can say that:
- The higher a node is in the tree, the more valuable it is.
- Each in-progress node we can reach from the root has a high cost.
This is Hard
The first principle from the Agile Manifesto says:
Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
Lean manufacturing teaches us to be sensitive to different types of waste in our systems, many of which arise from work-in-progress.
Perhaps these ideas seems obvious in retrospect but they are clearly not the way people naturally approach work.
I frequently catch myself slipping into bottom-up workflows. Maybe this has something to do with human optimism and hubris; many of us don’t count on mistakes and we think we know more than we do. Recognizing that effective work patterns are hard to execute and can be non-intuitive is important if we care about productivity. So I challenge myself and others to ask “how can we minimize work in progress”?