To compete in the digital economy, teams must optimize both efficiency and effectiveness–it’s a tough ask. The traditional dominator hierarchy is a problem because organizations that use command and control create silos and handoffs that stifle innovation at the team level. Coordinated autonomy releases the creative spirit of individuals–but how can leaders assure alignment with their vision?
One way to eliminate the delays and waste associated with silos and foster autonomy is to arrange around value streams. A value stream is anything that has a customer or anything that delivers a product or a service. All value streams begin with ideas and end when a change is delivered. Or, even better, when our cherished customers realize the intended value outcome. The original intent of Agile was to provide “value” to our customers faster … but we hardly ever talk about what this value is or measure its existence.
Traditional organizational charts arrange resources according to expertise. This means that work is handed off to different teams as it progresses through the value stream. Value streams exist whether or not people call them that and whether or not they actively manage them. Every time a hand-off occurs, it creates an opportunity for delays or errors. It also means it’s hard for people to understand the end-to-end system. Instead, they do as they are told to optimize their piece of the puzzle without really understanding how their actions impact work that’s upstream or downstream.
More progressive ways of working, like Agile and DevOps, do promote cross-functional, autonomous teams, but they typically leave a big gap between planning and delivery and are not always smart at connecting feedback from customer experience back into planning. Value stream orientation promotes team diversity by recognizing the individual background (cross-functionally) into the value delivered to the customer.
Organizing around value streams is the foundation for nurturing the value stream-centric ways of thinking and working that drive both efficiency and effectiveness. Then, customer experience is improved and higher levels of organizational performance are achieved. This is because:
- Putting customer experience front and center brings higher retention and referral rates
- Elevating the concept of flow (see below) gives teams permission to prioritize removing waste
- Balancing innovation with improvements reduces technical debt, toil and unplanned work so employee experience is better, too
- Connecting planning to delivery to feedback in a continuous loop aligns teams and helps with decision-making
Flow is about how fast ideas can move through a value stream and be made available to the people they’re designed for. It’s about outputs and efficiency. Customer experience tells teams about the outcomes of their work and their effectiveness. Used together, these measures ensure the teams are doing the right things right and moving in the right direction.
In this model, leaders share their authority and empower their teams. They support teams’ self-discovery of improvements and make sure those local learnings go global. They help their teams understand how much time they spend innovating compared to reacting or improving. Then the leaders can help their teams reduce distracting and stressful unplanned work and instead invest in increasing capacity for innovation in the future.
Follow these steps to become a value stream-centric organization:
- Identify your value streams
- Identify who is involved in each step of your value stream
- Make your value stream visible by visually collaborating with your value stream team
- Use tooling to gather value stream data and generate insights for your team
- Meet regularly to inspect and adapt your value stream
All organizations are composed of value streams, regardless of whether they have been made visible, and most large organizations have complex networks of interconnecting value streams. These dependencies are not easily decoupled. They’re not easily visible, either. But once you’ve mapped them, you can start seeing where they connect and manage the dependencies. Ultimately the goal is to break these dependencies since they cause delays and risk, but it’s hard to do that when they can’t be seen.
Connecting the organizational vision with the value streams becomes much easier with this model. Organizational structures are flattened. Leaders understand which value streams they are accountable for and how they work. The time between having an idea and getting feedback on how it’s received is shorter and amplified. They can see the work being done, measure what impact it’s having and make better decisions about what to innovate or invest in next.