It's the perfect time to learn more about Value Streams and how working with Flow can revolutionize your work.
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It seems everyone in the Agile, DevOps and Tech scene are talking about Value Streams in 2021, and for good reason! Business and manufacturing folks have been focused on value streams for decades, but as maturity and capability evolve in tech, these areas are now combining and the best of each world is being applied everywhere.
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Who am I?
I'm a tech veteran who's been through support, development, delivery, infrastructure, management, leadership, and now consulting for over 20 years. I live in Toronto, Canada, love running, biking, and frisbee, sci-fi, philosophy, history, and anything I can hear about in a podcast (lets share recommendations!).
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I've focused on value streams and flow after seeing the common threads and patterns that have worked best across industries, and organizations of all sizes. I'm sharing Flow Engineering as the culmination of everything I've learned and used to get incredible results for teams.
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Course Overview
This course will give you everything you need to start dramatically improving the flow of value across your organization. It's structured as 7 consecutive days (starting tomorrow!) like this:
Day 1: How to Begin with the End in Mind - Outcome mapping
Day 2: How to Map your Value Stream - Value Stream mapping
Day 3: How to See what's Affecting Flow from Outside - Dependency mapping
Day 4: How to See what's Affecting Flow from Inside - Capability mapping
Day 5: How to Run the whole Process - An example case study
Day 6: How to Get Results - Creating a Flow Roadmap
Day 7: How to Get Help - More Resources and a Special Offer
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Flow Engineering
Imagine the path of your workflow from idea to customer as a stream that currently winds throughout the landscape, off into the distance around you, from upstream to downstream. From where you stand, you can see part of the stream as it approaches you from upstream, and you can see a part downstream as it continues into the distance. If you wanted to improve the flow, you could widen the portion around you, or perhaps carve a more direct path from one curve to the next. You wouldn’t truly be able to see what effect your change had on the stream without a view of the entire flow, and the downstream outcome. The stream could be restricted far upstream beyond your view, or downstream. If you had a map of the stream’s path, and measurement of the flow within the stream, you could ensure it followed the most direct path to your destination, and improve the flow precisely where it would have the most positive effect.
This is the power of a mapping approach to improvement. By creating and leveraging maps of the flow of value in your organizations, you can create the optimal flow of value, by changing precisely what will have the greatest impact.Â
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4 Key Maps to Improve Flow
The 4 Key Maps provide a comprehensive view of the landscape that your value stream traverses. Using the maps to guide your focus, decisions, and efforts, you can scientifically approach your improvement efforts using a visual and easily understood medium.
4 Key Maps
Outcome Map:
Value Stream Maps:Â
Dependency Map:Â
Capability Map:
Visualization
Factors contributing to your desired state
Measured workflow performance and constraints
External influences on the stream
Internal influences on the stream
Focus
Clarity, Direction
Performance, Quality
External Effects
Internal Effects
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Homework
Write down a list of all the value streams that you are connected to in your job (hint: if there's a customer - internal or external - there's a value stream)
It’s important to involve representation from at least the responsible and accountable parties within a given value stream. That means if design is a part of the stream, there should be someone from design present during mapping. That also means that leadership and those who are able to change the system, workflow, and team must be present and involved. Once you identify your key bottlenecks, you can narrow the involved parties to those who are critical to those areas, but until the number of people exceeds a manageable 12 (for a professional facilitator), it’s better to include as many voices and perspectives as possible.
In order to get the highest quality information about the stream, it helps to have 2 voices from each role in order to get a second opinion. If one engineer states it takes 20 minutes to code review, it could be because they're thinking of a section of the code they know very well, or simply being optimistic. Having a senior and junior perspective can be very valuable to paint a more accurate picture of the value stream.
In the case of a large, complex stream like a large, monolithic product, you may have legal reviews, marketing consultations, graphic design, etc. If they're in the stream, they should be on the map, but if including them brings you to an uncomfortable headcount it may be wise to request their data directly prior to the mapping session and then plugging it in. You can use the following format for a survey:
[Product X release process]
Which activities do you perform in the [Product X release process]?
For each activity, thinking of what has happened the last few occurrences, on average:
What triggers the start of the activity? [e.g. Jira Ticket from Role Y, a meeting, a direct verbal request, etc]
How long does the work sit before you can act on it? [e.g. in a queue, or inbox, etc]
How long does the activity take from start to finish? [e.g. from the time you start looking at it to when you hand it off to the next activity or transition to another activity]
How much of that time is time spent working on the task? [e.g. not waiting for things to load, looking up context, trial and error, etc]
How often do you have to send the work back to a previous step because of an issue? [e.g. missing information, unclear instructions, etc]
How long does the work sit completed before the next role picks it up? [If you know]
What do you feel is the biggest bottleneck in the process at the moment?
What do you feel is the largest contributor to that bottleneck?
As you can see, it can be a lot of information to collect and synthesize, but the biggest issue is not knowing it. If a survey seems like too much work or a hard sell, you can also complete the value stream mapping in phases with different stakeholders.
This scoping and participation challenge exists only when the value stream itself is too large and cumbersome, which is something we can address through mapping! By moving to smaller, more autonomous, stream-aligned teams, you can map faster, easier, and at higher quality.
Who guides this process?
It pays to have skilled, outside facilitation for this process for a few reasons: A perspective from outside the organization is far less likely to bring an agenda, bias, or political influence to the process, which will drive superior results. A skilled facilitator knows where to dig, and when to move on. They will know what questions to ask, and what seems like a strange measurement based on experience with other teams. All of that saves valuable time and maximizes value. Gathering a team can be expensive if you’re not getting value from the session, and it can impact morale and trust to waste time. A skilled facilitator can likely complete a session in half the time, while keeping the team engaged. You may find you have skilled facilitators right now as agile coaches, scrum facilitators, dojo trainers, community of practice leads, or teachers. It’s ok to pilot the process with a facilitator and team willing to try and learn!
The highest performing companies build alignment around three questions: Why are we doing this? What should we do? How do we implement the transformation?
Boston Consulting Group, 2020
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Similar to: Impact maps, fishbone diagrams, V2MOM, North Star
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The Outcome Map
Clarify the goal and contributing factors to explore your challenge/opportunity and align those involved. “We want to deliver changes every week” is a fine outcome to aim for, but your odds of success and ability to make key decisions depend on why that’s valuable, as well as what could get in the way.
Why?Â
Begin with the end in mind. See and share factors between you and your goal. The Outcome Map allows team members to dig into a desired outcome and begin charting the path to achieving it with open eyes. Doing so will help the team define a clear roadmap towards better.
How do you build it?Â
The team comes together to define their desired outcome, and then consider what could impact their ability to deliver it. Defining the Why(s) sets the foundation supporting the effort. Obstacles are the key challenges standing in the teams’ way. Investigation lists your immediate actions to address obstacles. Measures are TBD when you define the map at first, because until you create the following 3 maps, defining effective measures is impossible. You’ll loop back and fill them in. Optionally, you can dig even deeper to add Indicators, Impacts, Roles, and Methods. Indicators list how you will know you’re progressing. Impacts list factors that will affect your progress. Roles list the contributors to the process. Methods, like Measures, wait until you know more. Deciding what to do and how to measure it can’t be done effectively until you truly know where your risks and opportunities are.
How do you use it?Â
The Outcome Map is an excellent way to create energetic communication, clarity, and alignment from the start. It also reminds you to stay on track as you progress, and how to know when we’re drifting from the path. By adding measurements and methods, you can describe where you want to go and how you plan to get there.
How do you get from a desired outcome to a target value stream?
If we take a desired outcome like: "Release twice as often", it's easy to target the release value stream for the product in question.Â
Release what? We want to release our mobile app twice as often.
Why do we want to release twice as often? This may be obvious to you but it's safe to assume it's not obvious to everyone you need involved. Do you want faster feedback from customers? Why else?
What obstacles are in the way? Testing takes a long time, we need approvals from 3 different departments.
What investigations can we do? We could send out a survey (which may raise alarm bells). We could approach our director to ask for support.
The real secret to identifying value streams is here. Each value stream has a customer. If you find the customer, you find the stream. Some times the easiest way to map a mysterious value stream is to start from the customer and work backwards. Customer -> Customer Value (or need) -> What is delivering the value?
How will we measure progress? The first stream will be a big milestone. Having all the streams in a single portfolio is another (maybe aim for 10 a week). Assigning owners for each stream is huge. Having each team assigned to a stream is another big one. Creating a living visual reference would be great as well.
What methods will we use to make progress? Should we collect survey data and document it in a wiki? Create a visual representation? Will it be maintained by the owners?
Having a well understood outcome helps us focus on a specific value stream, because there's a value stream involved in the delivery of that outcome. There's a value stream behind every outcome. Once we know the outcome, we can identify the customer involved, and work backwards to the start of the stream.
Conclusion
By starting with the clarity of the Outcome Map, the team is heading in one direction together. Having a map makes it easy to communicate within and beyond the team.
"We're all on the same page and aware of what may lie ahead. We revealed that our regulatory requirements will demand a careful mitigation strategy, and our lack of test automation is a sore spot."
Below you can see how each map addresses valuable questions, and flows from one to the next. As you progress through them, you add clarity, confidence, and context to support powerful decisions with maximum alignment.
In other words:
Outcome: Define and clarify outcomes
Value Stream: Identify and address constraints and waste
Dependency: Visualize and address external needs and complexity
Capability: Measure and address internal needs and opportunities
Excerpt of Value Networks, Chains, and Streams (PDF attached)
I've been digging into and expanding my understanding of value flow in different contexts, and (as I do) visualizing it has been helpful to put it all into context. Have a look and if you're interested in further reading, check out the following for more detail:
Value networks are focused on describing the social and technical resources that exist within and between organizations. The nodes in a value network represent roles or functions in an enterprise. The nodes are connected by interactions, which represent deliverables that might be tangible (product or money) or intangible (regulatory compliance or risk reduction). The primary purpose for creating a value network is to understand the complex web of relationships and areas of value exchange that exist within and between organizations.
A value network is not just a map of the business enterprise, but it is also the process for capturing the relationships between companies, individuals, roles and processes.
Value network mapping shows that all companies are much more alike than different. When leveraging a value network as a map of an enterprise, it becomes apparent how different organizational units can contribute to common needs within the organization, as well as to common requirements.
Many value networks are not attached to a specific organization; instead they are part of a larger consortium of organizations or 'ecosystem'.
To understand what is meant by value networks and how they differ from one other, we should first discuss value networks as research tools. Mapping a value network allows us to visualize, discuss, analyze, and define a value network in a clear and productive way.
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How are value networks created?
Value networks can be derived from many different sources, including buyer and seller surveys, third party customer satisfaction research, competitor benchmarking, and historical unit cost data. You can also gather various stakeholders together to map a value network in real time. Value networks can be created for any number of purposes, including product teams to track costs and deadlines, marketing teams to track customer acquisition costs, and sales and operations teams to track performance metrics. Value networks can also be developed to identify potential alignment between companies that would result in greater value, i.e., enhancing efficiency, agility, product quality, marketing efforts, or executive talent.
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The value network as a map of the enterprise
You don’t need to create a complete value network to understand how interdependent organizations are. You can map the organizational nodes into a basic diagram to understand how and where business can be performed effectively. Mapping the value network into a basic diagram gives you a clear, visual artifact that can help drive productive conversations and planning and avoid confusion involved in written documents, presentations, or meetings without a simplified representation to refer to.
While a value network provides a framework for identifying critical relationships and business value that exist within the organization, it does not define the value (the end-to-end value) that an organization should deliver. As such, organizations use the value network as a starting point to develop their own value chain and value stream mapping. Value chain mapping can look similar to a value network, but it should not be defined by its map shape.
In the context of enterprise value networks, the network has 3 pillars:
Capability - The nodes in a value network describe capabilities, often attached to roles, functions or divisions, depending on the zoom level of the illustration.
Interaction - You can describe the complex relationship between nodes and describe the logic and terms that lead to value exchange between them as an interaction model. Examples of interactions can be communication, information flow, or value exchange.
Relationship - Your model describes the relationships that exist between nodes. The relationships are based on role (i.e., people, dollars) or function (i.e., design, security, process). Relationship is defined by an established and continued exchange of value and mutual benefit.Â
In short, capabilities interact with each other based on their relation to one another.Â
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The value network as a network of value streams
The most decentralized, autonomous, and productive structure for a value network is a collection of value streams interacting as suppliers and customers. A platform team providing services to product teams, who consume a design system from a design team, and get approvals via a accessible self-service legal system provides an agile, high velocity network without hard dependencies. Each value stream has at least one defined customer (internal or external) and consumes the products and services of others as their customer. This is how a company like Amazon builds loosely-coupled services that can be used individually and interchangeably while providing services to other services and products like Amazon.com or customer applications atop that.
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The value network as a map of your company
You can think of a value network as a map of your company, and it is comprised of a set of relationships between people and resources. Many of the relationships shown in the graph above can be understood as contracts between different organizations. For example, in a supply chain, the firm that provides the machines that fabricate the product, hires a firm that provides the design, processes the machines, and maintains the machines. The relationship between these two organizations are contractually clear and the value created by this relationship can be measured in dollars and cents. Similarly, the relationship between an enterprise that builds systems and an enterprise that uses the systems can also be characterized as a contract.
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The value network as a map of your industry
If you zoom out, a value network can be created as a map of your industry. That map will evolve over time as industries change and industries are disrupted. You can apply the map to create new value by arranging your nodes into a novel structure, and if you do so well, the value network will evolve in a way that creates shareholder value. For example, if you’re in the AI data processing industry and you’re considering a merger with another company, you might create a map of the data processing industry that shows where both your companies have strengths and weaknesses. If you have a successful distribution system and you’re looking for scale, a merger might look like adding the distribution capability of another company to your existing network, while its products become a part of your network.
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Conclusion
In a rapidly changing digital world, information technology is the new treasure chest. The ability to search across information sources and analyze and display them in real-time provides critical insight into the current and future state of your enterprise. This skill is becoming more important than traditional data analysis. With the access to this new, easily accessible information, employees can make better decisions. Data-driven decisions improve the quality of products and services and increase business efficiency.
Without off-the-shelf tooling to provide these insights in the short term, creating a value network map in an online whiteboarding application provides all the benefits of a systematic view of your organizations ecosystem that can help you make powerful, valuable decisions with little investment of time, and no investment in infrastructure. As is the case with all maps, the act of mapping will bring your team together and help generate collective insight, understanding, and innovation.
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What are you waiting for?
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If you're interested in getting started, shoot me an email at [email protected] and let's talk about your challenges and possibilities.
The concept of Value Chains were introduced by Michael Porter in his book Competitive Advantage in 1985:
“The value chain disaggregates a firm into its strategically-relevant activities in order to understand the behavior of costs and the existing potential sources of (competitive) differentiation.”
In other words, the value chain is the connected activities (or capabilities) that are executed by an organization to create and deliver value.
Introduction
Economic value creation is the process of adding economic value to a business incrementally. Economic value creation is the sum of the value created by each business unit within a given economic system or value chain. Value-addition happens in two phases:Â
creating a new value; andÂ
maximizing the economic value created.Â
For instance, an organization creates a new value by providing a new product or service according to an unmet demand. The organization then maximizes the value creation by matching the end customer’s needs with the product or service which produces the highest economic profit. Value-addition at a company level is captured through the concept of value chain efficiency. In other words, getting the most bang for the buck.
Value Chains
In order to build a proper model of a business and create a more accurate value chain, we need to take a step back and think of the business as a closed system. We need to ask ourselves three questions:Â
What is the state of the business? The activities which make up the business and the costs that are associated with each one are interconnected.Â
What are the inputs that make up each activity? Input costs determine the price of the product. The relationship between inputs and prices affect demand and therefore sales, which in turn, influence costs and profits.Â
What are the outputs? What are the products that are produced? Depending on the end-consumer, demand may also be influenced by competitive forces and government regulation.
The value chain provides a structure to model and frame that thinking, and informs how we can visualize and map it.
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More on that in a following deep dive into Wardley (Value Chain) Mapping, coming up!
In his post, Olivier outlines 6 common strategies for tackling technical debt, but not how to make space beyond taking on more work or sacrificing work. They all require a team to do more, or do less, which is a real challenge when you're already working as hard as you can.
Of course, the answer is to work smarter.
So I jumped in with my approach:
The tough pill to swallow is that all of these approaches require some kind of sacrifice of 25%, which can be hard to get buy-in for or ask a team to shoulder (especially since they're already drowning).
My first step is to have a team create a value stream map for the workflow they're in right now, and transform waste into improvement time.
In struggling teams, I always find simple fixes that can be implemented with near-zero work that can free up 20-30% of their week. The cost is 2-3 hours (which can be subsidized through strict meeting hygiene for a week or two) and the payoff is sustained every sprint.
Once a team can demonstrate the benefits of the practice it's much easier to get leadership support for an enabling team or other support to grow the impact.
It's not new, but over the last few years there's been a ton of growth in the ecosystem not just across every industry, and across every company activity as well.
When you see your company as a collection of interconnected value streams, the potential here is just showing the start of a complete evolution into an operating model that not only delivers on agility, value, and innovation, but every positive outcome available.
2021 is about 3 themes for me: Clarity, Value, and Flow
Clarity of clear outcomes and end-to-end visibility Value of a customer focus, and value stream thinking Flow of work, info, communications, and value - forgetting the org chart and living in the value streams
In a nutshell, understanding that your org is not your org chart, it's a collection of value streams first and foremost, and once you start thinking that way everything starts to flow together in the right direction.
The hard part of mapping shouldn't be laying out the map! Focus on facilitating the most productive workshop. As in everything, the human aspect is the most challenging.
You can (and should!) go much deeper than this by adding tooling, artifacts, dependencies, quality, and value data, but start small and focus on getting the right information from stakeholders.
Using a simple approach to mapping not only makes it easier to produce, it's easier to understand. I've heard too many cases of teams stuck in a room for 4 days, producing maps with hundreds of steps, only to finish with something nobody could understand. Never mind that nobody wanted to ever do it again. Lower the bar for everyone, start small and build on the wins you gain from a simple approach.
Just start mapping!
Of course, if you want to get the best results, I'm just a message away :]
