How Does Kanban Work?

Reviewed by: Raúl Herranz, CST

If you've heard of kanban but are still unclear on how it works, you've come to the right place. We'll dive into how this flow-based approach is applied in practice and how it can complement your company's existing scrum application.

To level-set, it's key to understand that kanban is a principle-based framework that helps teams improve their workflow. Kanban focuses on visualizing work and optimizing flow, allowing teams to identify what hinders work from getting done and develop innovative solutions to make improvements.

Kanban isn't a new way of working—it pre-dates scrum and agile by several decades. Kanban was first created in Japan at Toyota in the 1940s. It was developed by Taiichi Ohno, an industrial engineer at Toyota, as part of the Toyota Production System (TPS) to improve manufacturing efficiency. 

Today kanban has evolved as a desirable method for organizations to use for knowledge work across departments such as IT, Marketing, Human Resources, Finance, and more. 

Key elements of a kanban system

Visualize work with a kanban board

One of the key practices in kanban is the visualization of the team's work. It allows teams and stakeholders to understand how work flows through the steps of their process and identify bottlenecks as they appear. There is no right or wrong way to visualize work, but using columns to represent each stage of the work process, from start to finish, is a common practice.

The team can determine whether this basic layout is sufficient, or they may add additional columns that apply to their workflow. Some common additions are "Testing," "In Review," and "Waiting for Approval."

Limit work in progress (WIP)

Work in Progress (WIP) limits are a fundamental function of kanban. The idea is to prevent too many work items from being started, but not actually getting completed. It's natural for team members to be busy working on several items, but activity doesn't always lead to productive results. 

Kanban is all about team empowerment rather than a set of strict rules, so the WIP limits are determined by team members through experimentation. For example, one team may test out a WIP limit of five. This means that only five work items can be worked on by the team at any given time. 

Through experimentation, the team will learn that the WIP limit is too high, too low, or just right. When a team's WIP limit is too high, they'll notice that a lot of work is getting started, but not done. A low WIP limit occurs when team members are sitting idle because they've hit the limit and can't start additional work. The sweet spot occurs when they find the right number that maximizes productivity and work being completed.

To get started using WIP limits, teams will track the work items within the kanban board. If your team has a simplistic board setup, WIP limits may be tracked in an “in progress” column, particularly if that’s where your team experiences bottlenecks. However, WIP limits may be applied to other parts of the workflow that may be problematic, such as quality assurance for a software development team, or approvals for a marketing or human resources team.

Manage flow across the system

Kanban is all about managing workflow as it travels from start to finish. When flow is optimal, work travels seamlessly from one task to the next without delays. You can think about it like cruising down the freeway without any red lights, traffic jams, or accidents.

On a kanban team, work doesn't naturally occur that seamlessly. Most teams experience bottlenecks, blockers, and delays, but rarely take any action to rectify them. With kanban, the team is empowered not only to identify these obstacles but to find innovative ways to adapt the workflow. 

Add meaningful metrics

Understanding metrics such as lead time, cycle time, and throughput is important in maximizing the effectiveness of kanban.

Lead time measures the total time it takes the team for a work item to go from request to completion. Lead time is an important metric for estimating future work and answers the question that stakeholders have, “When will I get my work?” 

Example: The VP of Sales requests that a meeting button be added to the company’s website to generate additional leads. 

• The request is added to the team’s board on October 1.
• The work is performed, tested, and reviewed.
• The new button goes live on October 31.
• The lead time for a new website button is calculated at 30 days. 

If 30 days is an acceptable lead time, the team doesn’t need to make any process improvements. However, if they find the lead time is too long, the team will discover bottlenecks and make process improvements.

Cycle time is a similar metric, but it measures the time it takes from when work begins (rather than from when it's requested) to completion. Measuring cycle time can help teams identify workflow challenges internal to the team.

A team might have a long lead time, but a short cycle time. This occurs when too much work is requested, but the completion time is fast. This information is important in adjusting expectations with stakeholders.

Another metric in kanban is throughput, which helps forecast capacity and spot trends in productivity. One way to do this is to have the team track how many work items they complete each week. If 10 items get done on average per week, the team has a throughput of 10. This works well for a team that has similar-sized stories that are repeatable and predictable, such as completing a follow-up call or building a widget.

Make policies explicit

Another principle of kanban is to make policies explicit. Everyone in the organization should clearly understand how the team operates and how work goes from initiation to completion. By clearly communicating policies with a common language and understanding, the team is able to effectively make improvements to its workflow.

Common policies include:

• Entry criteria: Conditions that must be met before a work item can move into a specific column or stage.
• Definition of done: A shared agreement on what it means for work to be considered done.
• Definition of ready: A shared agreement on what the team needs for work to get started.
• Pull rules: When and how to pull work items into the next stage of the workflow.
• Working agreements: The team agrees on how they will work together.
  

Provide feedback loops

In kanban, feedback loops are important for continuous improvement and maintaining flow. A kanban team should feel empowered to inspect and adapt how they work and make adjustments. While there are no required meetings with kanban, many teams find it helpful to create space for incorporating feedback. A few examples of this are:

• Daily meeting: Kanban teams can benefit from reviewing their workflow daily and discussing where there may be blockers. Having a daily inspection can help identify patterns and allow teams to find new ways of working.

• Replenishment meeting: This meeting is when teams determine when to "replenish" work items to pull into the system. It helps teams balance demand for work requests with the capacity of the team, ensuring the work continues to flow. Teams use this time to see if their current method is working or if they need to make adjustments.

• Retrospective: A retrospective looks back at how the team worked recently and what went well and what didn't go well. By reflecting on the past, the team makes adjustments to their process for the future.

How kanban complements scrum

Companies have battled for decades about which agile framework they should use—scrum or kanban. The good news is that you don't have to choose! Scrum and kanban are like peanut butter and jelly; they're totally different, but they work well together.

The two frameworks can be used together, for example, when a scrum team wants to adapt kanban practices to improve workflow, or when a kanban team may want to benefit from more structured collaboration.

Getting started with kanban in your context

Kanban is easy to get started with because one of the guiding principles is "begin with what you do now," so there's no need to overhaul what your team is doing today. Simply build in feedback loops early to inspect and adapt how the process is working for your team. Keep it simple: take small steps to get started, show visible progress, and before you know it, you'll make valuable improvements.

Scrum Better with Kanban

If you're working on a scrum team that wants to be better, sign up for the microcredential course Scrum Better with Kanban. You'll earn two in-demand credentials and learn how to enhance your scrum practice with the flow-based principles of kanban.