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Value Streams Work Like a Dream
How connecting your work to the value it creates gives meaning and reduces waste
Cliff Oguzie
November 18, 2024
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Planning and prioritising to deliver the right products that move the needle with users and customers can sometimes feel like throwing darts blindfolded.
Sure, there is research, user feedback and other methods for working this out, but how do we get started in the first place, particularly when established teams and departments already exists, each with their own priorities?
I previously covered how portfolio visions are essential to start a change journey in an organisation or team that is serious about succeeding against competition and growing their business or service. Once that’s in place, there has to be a way to actually organise the work ahead in a way that helps all teams to work in harmony.
In smaller groups, it could be that a continuous stream of work can be set up in the form of projects or releases, with minimal central oversight.
In larger or more mature settings with departments that have their own ways of working and priorities, portfolio visions should be followed-up by organising how all necessary teams deliver the right changes regardless of their department.
From experience, the most efficient way to do this is to first organise teams based on value streams.
Value Stream Management (VSM) can be described as the organisation of teams and delivery of solutions to enable maximum business value to be realised.
So how can value streams help you deliver more for your customers or users?
How VSM Works
Firstly, it’s worth being aware that there are multiple ideas for what represents a value stream. Some models, separate development value streams from operational value streams.
Operational value streams are the operational processes to provide the goods and services to a customer or user, whilst development value streams relate to the approach to deliver the solutions used by the operation.
Other models have slightly differing variations. In this instance, I refer to delivering solutions that can be either used by operational teams, or directly by customers.
Now we have that out of the way, how would I set up a value stream?
IDENTIFY
Understand first what the value streams are in the first place. This involves mapping out the process from start to finish, identifying how value is currently applied to a user, such as ordering an item of clothing on line, or applying for a loan.
In each case this should take a product-first approach, rather than a project approach, so that the focus is on value to the customer or user, and of course, the organisation who is servicing them.
MAP
Show the current situation of the value stream, including failures, problem areas and anything that needs to change to improve the product or service. The above example from BMC shows one of many methods of mapping a value stream.
METRICS
Define what success looks like. How will you know what an improved value stream looks like, and the changes required to improve them? Defining metrics early supports prioritisation of initiatives, projects or features.
Make sure there is a good mechanism to track changes to metrics based on operational activities, external factors and the changes implemented.
TEAMS
Identify and organise the right teams to deliver the solutions. This could include teams from multiple departments with the necessary skills to release the changes needed to improve the value stream.
The teams must be motivated and aligned to their team goals, and have an understanding of what their goals mean to the overall metrics and vision.
MANAGE
Depending on the size, VSM may be required to ensure each team is focussed on their work whilst being mindful of dependencies. Value stream oversight helps to keep progress towards the vision.
IMPLEMENT
Release often across each team, ensuring the value is based on what customers and users want, not what we think they want. Doing so involves continuous feedback loops, smaller releases wherever possible, and analysing the impact of the release, to inform prioritisation and new approaches for future releases.
OPTIMISE
Keep iterating, look for opportunities to maximise what was delivered and make improvements to the flow of work, taking out wasteful activities and processes along the way.
There should be an ongoing journey of increasing knowledge and expertise within each team, whilst sharing lessons to improve efficiency.
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How VSM Benefits
What sets working in value steams apart from a more siloed view of delivering change?
Strategic Alignment:
A value stream approach gives organisations a chance to prioritise activities that actually have a higher likelihood of achieving the vision.
Speed to market:
Whilst smaller teams can deliver at greater pace due to being inherently more nimble, larger organisations can benefit from value stream management as they are able to make decisions faster, including stopping work if the value is not being seen, or if the work is turning out to be more than originally expected, providing a less attractive return on investment.
Value stream-led teams are also more able to respond quickly to new priorities or changing landscapes.
More efficient resource utilisation:
Value stream management makes priority work more visible, and enables allocation of people and funding in the right areas. This is especially more effective when priority calls are required. In this case, decisions on where to spend time are easier to make.
Team alignment:
Regardless of which original departments that teams belong to, when working as part of a value stream, they are often more aligned on common goals and more likely to work effectively together.
Risk Management:
Put simply, risks are clearer when a full view of a value stream is visible. Assuming there is active oversight at that level, dependencies and risks can be seen and action taken more proactively.
Improved Data Quality:
A value stream set up gives higher quality data to help decisions to be made around which features should stop, start or continue and everything in between. Weaknesses in operational or delivery team processes can become more visible, and can therefore be resolved sooner.
Time Efficiencies:
Taking a value stream approach makes unproductive time, such as waiting time more visible. This gives opportunities to optimise development or operational processes, allowing more time to be spent keeping teams active and productive.
Where VSM Worked
Verizon
Telecommunications enterprise Verizon is a good example of a business that applied value stream management and used it to their advantage.
One of the advantages they cited was the ability to break down structural silos. I’ve worked in multiple large scale organisations over the years leading change initiatives and I definitely agree that reducing departmental barriers has helped teams to ship products and features at a much faster pace.
Jason Newman, senior manager of systems engineering at Verizon explained…
“We had some siloed organisations, and everything worked great within the silo, but as the company introduced products that crossed boundaries - the method of everyone focused on their own space wasn’t cutting it.”
A value stream approach helped Verizon teams work together more collaboratively allowing information to flow more efficiently. As the business was growing, sticking with their old methods of delivering change would not have helped them to do so at the pace they needed.
Some key changes Verizon made include:
Improved visibility of processes including their weaknesses.
Improved data-driven decision making through enhanced business intelligence. This gave an enhanced view of how the business worked and therefore what changes could be prioritised.
The changes to approach not only improved team morale but also provided significant cost saves into the millions of dollars.
Boeing:
Aviation enterprise Boeing was also known to implement value stream management with the following benefits reported:
Boeing had “no idea what work was being done in each of our organisations” according to the portfolio management systems product manager, until they implemented value stream management, which provided them with visibility of work across different internal organisations, helping them to manage dependencies more effectively.
By using value streams and lean practices together, production time improved by 60% and resource productivity improved from 30% to 70%.
Boeing saved hundreds of millions of dollars in the first two years of implementing value stream management. This was due to the new ways of working speeding up their ability to innovate.
Value stream approaches allowed Boeing to prioritise work based on actual value. For example, when faced with challenges with the 737 Max, the value stream leadership were able to prioritise specific work to quickly respond to these issues.
Establishing visibility across multiple teams also enabled Boeing to see where additional capacity existed and where best to apply their skills. This increased overall productivity and the ability to achieve goals that directly contributed to delivering value.
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