Episode transcript The transcript is generated automatically by Podscribe, Sonix, Otter and other electronic transcription services.
Ricardo (4s): Hello, everyone. Welcome to the five Minutes podcast. Today I'd like to talk to you about a real nightmare Work in Progress or WIP. So let's first start understanding what is a Work in Progress. A Work in Progress is everything you do in your company, in your project, in your initiative, that requires effort, time, manpower, machinery, and the product is not ready yet to be sold or to be delivered to a customer. So it's every single unfinished product. So let me give you an example, a couple of examples. So you'll have an automotive industry a car without wheels is a working progress.
Ricardo (49s): Why you spend a lot of money putting the car almost ready. So we spent energy, people, men power, machinery, but you can not sell a car without wheels. So this is the worst nightmare because Work in Progress requires money, requires energy, and does not deliver results until it's not in progress anymore until the work is done. So what should be your paranoia Today in this critical moment is how you can reduce, simply reduce every single Work in Progress. How will you can reduce the life cycle of your product? Deliver intermediate products I am not saying unfinished product, but less sophisticated projects.
Ricardo (1m 33s): And then you can create improvements. And technology uses this very well. And what I'm telling is not rocket science for those working in agile because this is the concept of the minimum viable product and what I want now is just to explain to you that you need to shift your mindset from that industrial revolution mindset to the current agility and adaptive mindset. So let me give you a couple of examples. First one let's suppose you need to build three houses. In an industrial revolution mindset, What would you do to save money and to optimize? You will be up the tree at the same time, trying to keep some synchrony between the three of them.
Ricardo (2m 16s): So you will build walls in all the three at the same time. Why? Because you have the same team that you can save on the brakes and this is all very reasonable, but there is only one problem. People will only benefit from those three houses when the three houses are ready. So let's suppose that you will sell for $100 each house. So you will have zero cash flow, zero cash flow until you have 300 for the three of them. So what we need, we need to shift and see how I can do one house and release it fast and get the money so I can build other houses. So you need to reduce the complexity as we speed up the product.
Ricardo (2m 57s): So instead of having the most sophisticated product, for example, I want to build a five-bedroom home. So then you start building a five-bed in the room home, and then there is no money. And then you have an unfinished five-bedroom home. So what is my, the suggestion is that you plan. Imagine that in the future it will have five bedrooms, but you built just one because it's just you and your wife or your partner, and that's it. And then later you can expand that as needed. This is exactly the mindset that we need to have today. Why because we are in a very big crisis and, we need to be agile, nimble, and fast and we need to reduce to close to zero.
Ricardo (3m 38s): Every single item that is between zero and a hundred percent because unfinished food does not feed people. So let me give you another example. Let's suppose that your government, I'm just using a fictitious example, bought a million vaccines for COVID-19, but they are at the port. So what is the status of the vaccine in the port is a work in progress means the government already paid in everything that there is no benefit yet because no single person has one sharp of that vaccine. The work is done when people get the shot and get protected against COVID So you need to do everything you can.
Ricardo (4m 20s): So instead of importing 10 million vaccines, you can import 10,000, but go too quickly too, those in need. So you speed up and I can tell you from my own personal experience at the time at the UN, because most of the time we work in volatile environments, So war-torn countries, poverty. So many times we had to build, for example, housing. So instead of building a hundred houses at the same time in parallel and having during one year a hundred unfinished at homes, what do we say? We reduced the size of that batch to the minimum possible. And we speed up because if, but it happens, at least 10 houses could deliver benefit to 10 families instead of a hundred houses that are all unfinished, that will not deliver benefits to anyone.
Ricardo (5m 9s): So you need to understand the worst enemy of your project. Your initiative and your work is this amount of work in progress. Is an unfinished book, unfinished video, these ideas that are floating between their existence and the results. And this is exactly what we need to fulfill. And cover this gap quickly deliver the maximum possible set of products that will release cash that will release the benefits and that will do what is intended to be done. So think about that this week and see you next week with another five minutes Podcast.