Two Nordstrom Case Studies from The DevOps Handbook through the Lens of Slowification, Simplification, Amplification

The goal of science is to explain the most amount of observable phenomena with the fewest number of principles, confirm deeply held intuitions, and reveal surprising insights. This is known as the principle of parsimony.

With Wiring the Winning Organization, we present a very simple and parsimonious theory of performance based on the three mechanisms of slowification, simplification, and amplification. I’ve been continually amazed at how every transformation can be described using these three mechanism:

• Slowify (i.e., “slow down to speed up”) to make it easier and more forgiving to solve problems.
• Simplify (i.e., partition problems in time and space) to split apart large problems to make them easier to solve, most likely in parallel.
• Amplify (among other things, weak signals of failure) to make it obvious that problems need to be solved and that they were successfully resolved.

Over the next several months, I’ll be showing examples of these mechanisms at work. I’ll be picking some of my favorite case studies from The DevOps Handbook and describing them through the lens of slowification, simplification, and amplification.

In this post, I’ll present two case studies from Nordstrom that appeared in The DevOps Handbook, 2nd Edition, followed by specific examples of the three mechanisms from Wiring the Winning Organization.

(NOTE: We used GPT-4 to halve the word count down from the original 1,000+-word case study. Astonishingly, the examples of the three mechanisms were also generated by GPT-4. To me, the fact that GPT-4 can do this so well is strong evidence of the correctness and expressiveness of our model. In other words, we can explain many observable phenomena using fewer words!)

Abridged Nordstrom Case Study 1: Digital Transformation 

Let us examine how the Nordstrom team started their DevOps transformation initiative in 2013, which Courtney Kissler, their VP of E-Commerce and Store Technologies, described at the DevOps Enterprise Summit in 2014 and 2015.

Founded in 1901, Nordstrom is a leading fashion retailer focused on delivering the best possible shopping experience to its customers. In 2015, Nordstrom had annual revenue of $13.5 billion.

The stage for Nordstrom’s DevOps journey was likely set in 2011 during one of their annual board of directors meetings… The strategic topics discussed were the need for online revenue growth. They studied the plight of Blockbuster, Borders, and Barnes & Noble… These organizations were clearly at risk of losing their position in the marketplace or even going out of business entirely…

In 2011, the Nordstrom technology organization was very much optimized for cost—It had outsourced many of their technology functions, and had an annual planning cycle with large batch, “waterfall” software releases…

Kissler and the Nordstrom technology management team had to decide where to start their initial transformation efforts… They focused on three areas: the customer mobile application, their in-store restaurant systems, and their digital properties…

The Nordstrom mobile application had experienced an inauspicious start…any fixes to the application would have to wait months to reach the customer.

Their first goal was to enable faster or on-demand releases… They created a product team that was solely dedicated to supporting the mobile application… They had the goal of enabling the mobile application team to be able to independently implement, test, and deliver value to customers…

Furthermore, the mobile application team moved from planning once per year to a continuous planning process… Over the following year, they eliminated testing as a separate phase of work; instead, they integrated it into everyone’s daily work… They doubled the features being delivered per month and halved the number of defects…

Their second area of focus was the systems supporting their in-store Café Bistro restaurants… In 2013, Nordstrom had completed eleven “restaurant re-concepts”…

As Kissler stated, “One of our business leaders suggested that we triple our team size to handle these new demands, but I proposed that we had to stop throwing more bodies at the problem and instead improve the way we worked.”… They were able to reduce code deployment lead times by 60% and reduce the number of production incidents 60-90%.

These successes gave the teams confidence that DevOps principles and practices were applicable to a wide variety of value streams. 

In 2015, Kissler said that in order for the selling or customer-facing technology organization to enable the business to meet their goals, “we needed to increase productivity in all our technology value streams, not just in a few…”

She continued, “This is an audacious challenge… Our first target condition requires us to help all our teams measure, make [the work] visible, and perform experiments to start reducing their process times, iteration by iteration.”… From a high-level perspective, we believe that techniques such as value stream mapping, reducing our batch sizes toward single-piece flow, as well as using continuous delivery and microservices will get us to our desired state…

Nordstrom’s Transformation Viewed through the Three Mechanisms of Wiring the Winning Organization

Now that we have reviewed this case study, let’s see how Nordstrom moved from the danger zone to the winning zone using the three mechanisms of slowification, simplification, and amplification introduced in Wiring the Winning Organization. 

Slowification

Nordstrom shifted from a fast-paced, cost-optimized approach to a more deliberate focus on speed and agility. This shift was triggered by the need for online revenue growth and the realization that traditional retail models were at risk.

They decided to focus on specific areas of the business to experiment and learn rather than causing upheaval in the whole system. This allowed for more deliberate planning and practice. (In other words, they created a model line—a small but coherent unit in which they could more safely experiment and change.)

They targeted the customer mobile application, in-store restaurant systems, and digital properties for initial transformation efforts.

Simplification

Nordstrom simplified their approach by focusing on specific areas of the business for their initial transformation efforts. This made the complex task of transformation more manageable.

They created a dedicated product team for the mobile application, enabling the team to independently implement, test, and deliver value to the customer. This reduced the need for coordination with other teams.

They moved from an annual planning cycle to a continuous planning process, simplifying the prioritization of work based on customer needs.

Amplification

Nordstrom amplified the issues with their mobile application by acknowledging the negative reviews and the inflexible structure that allowed only biannual updates.

They identified the need for faster releases and quicker responses to customer feedback, which highlighted the issues with their existing processes.

Their focus on reducing code deployment lead times and reducing the number of production incidents in their in-store Café Bistro restaurants also amplified the issues in these areas and led to significant improvements.

Abridged Nordstrom Case Study 2: Experience with Value Stream Mapping

In the previous case study, we learned about the DevOps transformation led by Courtney Kissler and the team at Nordstrom. Over the years, they have learned that one of the most efficient ways to start improving any value stream is to conduct a workshop with all the major stakeholders and perform a value stream mapping exercise—a process designed to help capture all the steps required to create value.

Kissler’s favorite example of the valuable and unexpected insights that can come from value stream mapping is when her team tried to improve the long lead times associated with requests going through the Cosmetics Business Office application, a COBOL mainframe application that supported all the floor and department managers of their in-store beauty and cosmetic departments. This application allowed department managers to register new salespeople for various product lines carried in their stores so they could track sales commissions, enable vendor rebates, and so forth.

As Kissler explained, “I knew this particular mainframe application well—earlier in my career I supported this technology team, so I know firsthand that for nearly a decade, during each annual planning cycle, we would debate about how we needed to get this application off the mainframe. Of course, like in most organizations, even when there was full management support, we never seemed to get around to migrating it.

“My team wanted to conduct a value stream mapping exercise to determine whether the COBOL application really was the problem, or maybe there was a larger problem that we needed to address. They conducted a workshop that assembled everyone with any accountability for delivering value to our internal customers, including our business partners, the mainframe team, the shared service teams, and so forth.

“What they discovered was that when department managers were submitting the ‘product line assignment’ request form, we were asking them for an employee number, which they didn’t have—so they would either leave it blank or put in something like ‘I don’t know.’ Worse, in order to fill out the form, department managers would have to inconveniently leave the store floor in order to use a PC in the back office. The end result was all this wasted time, with work bouncing back and forth in the process.”

During the mapping workshop, the participants conducted several experiments, including deleting the employee number field in the form and letting another department get that information in a downstream step. These experiments, conducted with the help of department managers, showed a four-day reduction in processing time. The team later replaced the PC application with an iPad application that allowed managers to submit the necessary information without leaving the store floor, and the processing time was further reduced to seconds.

Kissler said proudly, “With those amazing improvements, all the demands to get this application off the mainframe disappeared. Furthermore, other business leaders took notice and started coming to us with a whole list of further experiments they wanted to conduct with us in their own organizations. Everyone in the business and technology teams was excited by the outcome because [it] solved a real business problem, and, most importantly, they learned something in the process.”

Case Study Viewed through the Three Mechanisms of Wiring the Winning Organization

Slowification

Nordstrom decided to slow down and conduct a value stream mapping exercise to determine whether the COBOL application was the problem or if there was a larger issue that needed to be addressed. This involved assembling everyone with any accountability for delivering value to their internal customers, including business partners, the mainframe team, and the shared service teams. The process allowed them to identify inefficiencies in the process, such as department managers having to leave the store floor to fill out a form in the back office.

Simplification

The value stream mapping exercise simplified the problem by breaking it down and identifying the root cause. This allowed them to isolate, diagnose, and address each issue in the order it occurred in the process, simplifying the problem-solving process.

They discovered that the problem was not the COBOL application itself but the process of submitting the “product line assignment” request form. By identifying this, they were able to focus on simplifying and improving this process rather than attempting to migrate the entire application off the mainframe.

The linearization of the process helped the team to break down the complex problem into simpler, more manageable components. This made it easier to identify and address the root cause of the problem, leading to more effective solutions.

Amplification

The issue with the “product line assignment” request form was amplified when they realized that department managers were being asked for an employee number they didn’t have, leading to incomplete forms and wasted time.

The need to leave the store floor to fill out the form was also identified as a significant inconvenience and inefficiency in the process.

By amplifying these issues, they were able to address them directly and improve the overall process.

Stay tuned for more case studies viewed through the lens of slowification, simplification, and amplification.

Wiring the Winning Organization comes out on November 21, 2023. Pre-order your copy at your favorite book retailer.

- About The Authors

Gene Kim

Gene Kim is a best-selling author whose books have sold over 1 million copies. He authored the widely acclaimed book "The Unicorn Project," which became a Wall Street Journal bestseller. Additionally, he co-authored several other influential works, including "The Phoenix Project," "The DevOps Handbook," and the award-winning "Accelerate," which received the prestigious Shingo Publication Award. His latest book, “Wiring the Winning Organization,” co-authored with Dr. Steven Spear, was released in November 2023.

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