Five Lessons Learned on My Value Stream Management Journey (Part 1)

As market trends change and disruption occurs at increasingly faster rates, is your company ready to be as resilient and nimble as a start-up? Value Stream Management (VSM) is fast becoming the way enterprises tackle this challenge. I want to share my experience of how organizations have succeeded and overcome potential problems as they implement.

First, let’s explain effective Value Stream Management. According to Sally Elatta, CEO and Founder of AgilityHealth, “To support the system that is designed to flow outcomes at the very top, we need leadership agility.”

Value Stream Management

Effective Value Stream Management (VSM) tunes the flow of an organization to achieve more value sooner and with less risk. It requires a product-centric, customer-focused learning mindset, applied with the end-to-end alignment of products and/or services flowing from the idea's inception to use by a customer. Its systematic approach to measuring and improving flow helps organizations shorten time-to-market, increase throughput, improve product quality and optimize for business outcomes.

VSM is much more than smooth solution delivery processes (SDP) or even business process design (BPD) or business process management (BPM). VSM illuminates the currents of outputs that lead to (or away from) desired business value outcomes. These currents of work flowing through an organization’s solution delivery processes are called “value streams.” VSM is implemented on these identified value streams as a combined effort of people, processes, technology, and culture to improve flow, quality, and value where improvement is needed most.

Preparing for VSM

We can likely name organizations that have tried an “Agile Transformation” that did not lead to the desired customer and business outcomes. Some patterns helped, but some hindered the organizational system from becoming more resilient, agile and lean, competitive, and rewarding.

These are the five lessons I’ve learned on my journey to help customers deliver better value sooner:

1. The Why: Understand what customers need and value and how they validate that value.
2. The What: Align each product and service to an end-to-end customer value stream.
3. The How/How Much: Identify, prioritize, and manage inhibitors to flow, often referred to as bottlenecks.
4. The Who: Ideate, invite, and incent people into continuous learning and improving.
5. The Where & When: Progress and learning are better than perfection and losing.

The why

A product not driven by customer challenges or requirements is a wasted effort. Your products should match your customers' needs and be delivered on time, with high quality. The market never runs short of options. If you fail to quickly learn and stay focused on customers’ needs and market trends, your customers will look for better options.

The what

Mapping products and services that deliver the highest customer value into common “streams” is foundational to managing the flow of this value. This process helps map your next steps to improving flow. Focusing on speed to value (better, sooner, safer, happier) drives the discovery and elimination of unnecessary activities (non-value-add time). Large queues might even indicate a need to “throttle the pipeline” and perhaps even ‘slow down’ to speed up.

One example is an intentional bottleneck BMW established in the paint shop for its I3 and I8 lines. Cars are sorted for efficiency in the paint shop, then sorted back into the sequence of customer orders. This improves the quality (better value) for the customer.

Identifying roadblocks, detours, and alternate routes require constant monitoring, testing, and improvement. Without this disciplined approach of VSM, the currents of work will hinder the flow of value to the customer and valuable feedback from the customer.

The how and how much

With the ever-increasing market volatility, organizations must become more resilient by quickly adapting and meeting customer needs. They must become the best at getting better.

The who

Teams and the individuals in them matter. In complex adaptive systems of problems being solved by people, individuals and interactions are the heartbeats of any organization. The flow of emergent solutions in a complex, adaptive domain requires extreme collaboration, transparency, and trust. Teams make dreams come true, and continuous learning is a necessary mindset. Value streams and the management of those streams can quickly become stagnant and fall behind the competition.

The where and when

There is learning in the doing. I’ve never seen perfection — it’s only a pursuit, at best. Have you heard the expression you can’t steer a parked car? To get somewhere, you must get going. To do this, incentivize learning. You lose only when you learn nothing. When improving flow in a value stream, designing a new idea, or selling a new concept, know the direction of your “North Star” and get moving. Then, inspect and adapt frequently.

Failure factors in real-life VSM

I have seen some shining outcomes but have observed many more outputs that fail to realize the desired business value outcomes. While attributed to many factors, these three hindrances often recur together:

• Localized Optimization — neglecting end-to-end flow across silos of people, process, and technology.
• Proxy Metrics — measuring what’s easiest to measure rather than measuring what matters for achieving the desired outcomes.
• Unchecked Assumptions — inferring unspoken expectations or understanding in interactions.

In part two, I’ll explore how each of these affects the five planning areas.

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