A “value stream” is defined as the process that creates a product or service for which our customers would be willing to pay. Although this definition is correct, it is too vague. Once we put it into practice, we must be much more precise, as making mistakes can cause far-reaching damage to our organization, just as doing it well will make us more competitive. How do we create a successful value stream?
The most successful value streams follow lean principles and place customer value at the center of our work, ensuring that this value continuously increases. This type of thinking or methodology changes the focus of our management, shifting from optimizing tools, teams, and separate departments to optimizing the flow of products and services through complete value streams. Such streams flow horizontally, across tools, teams, and departments.
Optimizing the entire flow eliminates waste of time and minimizes bottlenecks, allowing us to respond more quickly to changing customer priorities while increasing our ability to deliver innovative, high-quality, and low-cost solutions.
1. Start from the beginning
Who understands best what our customers value? It’s generally not someone from IT. Paradoxically, many value streams only include teams associated with DevOps. Good value streams start with teams that understand what customers value and can quantify that value based on customer feedback and market research. Without understanding our customers’ needs and expectations, we cannot know if the work we are doing is truly valuable.
Value streams are not effective if they are incomplete. Each step must be defined so that wait times can be eliminated from the entire flow. Optimizing the flow is much easier if we include all the steps.
2. Include all players
Do we need to undergo external audits? Do new features impact contracts? Do we need to update marketing or train support staff? Value streams must encompass more than just the development and delivery of a product. All individuals involved in creating and approving the product must be considered when defining value streams. Leaving them out can cause delays in delivering value.
3. It’s Not Just About Speed
Many companies try to speed up the development of a product or service, yet they create no value. It doesn’t matter how fast we go if we create something that no one wants to use. Leaders of many organizations acknowledge making funding decisions without objective criteria. Objectively, we should fund what brings value to our customers or things that will allow more members of our organization to focus more effectively on customer value.
Let’s make sure our value streams include a way to detect and stop orphan projects, where the requester has left the company or changed roles and no longer cares about project delivery, or zombie projects, which are projects that IT has completed but the requesters no longer care about. Both orphan and zombie projects represent up to 10% of IT spending. Sometimes, stopping work can be more valuable than starting it.
4. Find the Gaps
Almost every company has a data gap. Either because teams can’t track how strategies break down, or because they haven’t placed dashboards at all levels to monitor work. Having data as a natural result of the process we use is important and cost-effective. Additionally, data must be accessible to all levels of the organization. Individuals, teams, managers, directors, vice presidents, and C-levels should have dashboards and an appropriate level of metrics.
It is crucial to break down work coherently; one-year strategies cannot be easily broken down into stories that fit into two-week sprints. Too much is lost in interpretation when incremental steps are not defined. Work breakdowns should look like this:
5. Know Our Work in Progress
Imagine we reach the point where our value streams are established and work is flowing, but there’s just one problem: it seems like we’re not doing anything. “Work in progress” is not only for front-line teams but must be tracked throughout the value stream.
When we map the entire value stream, we can see not only how much work teams complete but how much demand there is in the backlog. Too much demand can also indicate a lack of criteria at the strategy levels, where it should occur. Even when development and delivery teams speed up, demand keeps increasing. Very often, demand is double what teams can actually complete.