How value streams increase agility for hybrid organizations
Jeff Rosenbaugh, Sr. Director of Professional Services, Lucid
Reading time: about 9 min
Staying competitive in today's experience-driven, increasingly digital, and hybrid world requires agile practices that have been shaping the rise of the software industry and are finding more of a foothold in other industries. The strategies we need today support responsiveness, adaptability, and continuous learning—keeping the focus on the customer.
While many development teams have adopted practices like Scrum and DevOps, this can only get organizations so far on their agile journey. After all, an organization is only as agile as its least agile team. Research shows that organizations with a successful enterprise-wide agile transformation (across all teams) have a 30% increase in customer satisfaction by creating teams with end-to-end customer visions. Organizations with less successful agile transformations only experience a 5–10% increase in customer satisfaction.
What makes those agile transformations successful? A focus on delivering customer value—and the courage to align the organization in support of that focus.
This is where value streams can make a big impact.
But first, what is a value stream?
A value stream is a series of activities that an organization takes to deliver value to an end user or customer. Value streams encompass the entire flow of value—from initial concept to every step in the process of bringing something to market and putting it into the customer's hands.
As you break down the steps or activities of delivering any product or service, there will be parts that add value to your customer (features that your customer is willing to pay for) and parts that don’t add any value to your customer. By focusing on the customer, value streams allow you to clearly see which areas of the business support the final output and which areas take too much time, misuse resources, or create unnecessary steps.
Here's the real takeaway: Organizations that align around value streams and achieve effective agile transformation aren't just improving customer satisfaction. They're also improving productivity. These organizations experience a 30% increase in efficiency gains through fewer handoffs, reduced overhead, and strict focus. In addition, these teams accelerate their learning and deliver value to customers faster.
Unfortunately, many organizations fail to achieve the success they want from agile transformations. This is often due to fear or unwillingness to challenge their existing siloed organizational designs and communication channels.
Silos make it exceptionally difficult to identify blockers in delivering customer value. While they may optimize work locally, they put value at risk by increasing handoffs and the burden of communication on teams. Value stream mapping can help leaders bridge these silos and align the organization in a way that supports agile efforts.
How value streams increase an organization’s agility
For enterprises that want to accelerate their agile transformation, here are four ways value streams help:
1. Value streams make unknown impediments visible.
With a top-down view of how a service or product is delivered to a customer, barriers to delivery become impossible to ignore. This visibility is key for continuous improvement—remove impediments, measure the impact of removing impediments, and repeat. The result? Your customers will experience quicker time to value.
2. Value stream mapping includes cross-functional teams in the process.
Delivering customer value involves cross-functional teams such as marketing, sales, customer success, legal, and others—everyone involved in the entire customer journey. By including every team that engages with the process you're mapping, you're building a truly complete view of what the organization is doing to deliver that product or service for your customers.
This helps individuals and teams align towards a common goal—often for the first time—so they can adapt quickly as customer needs change.
3. Value streams can help eliminate waste and help the organization become more efficient.
With cross-functional input, overlapping work, extra steps, and even steps that require non-value-added approvals become obvious to the entire organization. These inefficiencies are called waste and can take the form of extra features, re-learning, delays, task switching, defects, handoffs, and partially done work.
This awareness of waste often highlights opportunities for automating tasks, eliminating duplicate work, and making small upgrades that can have a dramatic impact on the entire process.
4. Value streams are an important part of aligning funding models to agile execution.
An understanding of your value streams is required to shift from a budget planning cycle that focuses on funding projects to a more lean-focused strategy of funding products. Traditional funding models have fixed scopes and budgets, making it diffcult to pivot direction as the market evolves. Value streams can shift the organization's focus to meet the ongoing, ever-changing needs of customers by enabling activities that add value.
Why value streams matter even more for a hybrid workforce
Value streams at large enterprises are bound to be complex, just as their products, services, and customers are complex. And as hybrid work environments become more commonplace, organizations grow in complexity. Teams are now spread out around the globe, in different time zones, with remote work creating opportunities for more silos.
These organizational silos may have once been beneficial in that they centralized skills by team in a single organization to drive expertise. But in a hybrid world, these teams don’t actually sit together, so much of the intended value of silos is lost as teams struggle to communicate and collaborate effectively.
Hybrid organizations, more than any others, are seeing an increasing need to align themselves with the flow of value creation in order to maximize the capabilities of their people. While developing narrow expertise in a silo is becoming increasingly difficult, the development of rich intimacy with a particular customer segment, product, or key business flow is proving to accelerate organizational efficiency.
How to maximize value streams for a hybrid workforce
Value streams are a critical piece of delivering customer-focused outcomes. And competitive enterprises in today's world understand (more than most) the importance of delivering value to customers consistently and deliberately. But more often than not, organizations find it hard to get buy-in to truly implement a value stream process. Or they use a value stream at a single point in time instead of a leveraged way to guide how everyone views the business.
In order to get the most value out of value streams, organizations should avoid these common problems:
Problem 1: Missing key players
Most organizations fail to get everyone in the same room, even if it’s virtual, to sit down and map a value stream end to end (use our value stream map template to quickly get started). If you don't have the right people from each department or team that contributes to the flow of value that you're trying to map, you will miss critical steps and insights. It will be difficult to identify areas of improvement or areas where the business is working together in the right ways. Plus, you won't have all the data you need to truly build a complete view.
Try these ideas to solve the problem:
- Use a visual collaboration platform to ideate, build, and share value stream maps. Ideate with a visual collaboration platform that is persistent and available (no matter where you and your team are in the world), where you can move things around, adjust steps as you gather more data, and create a better visual for the value map.
- Integrate your value stream map with data feeds. Many of the things measured in a value stream (lead time, cycle time, etc.) are captured in systems already. Connect and pull that data to your virtual value stream map to ensure a real-time picture of your process, enabling you to make active decisions about improvements to the system.
Problem 2: Failing to follow up on action items
Even when organizations bring the right people together, many abandon their value stream maps before they’ve had a chance to put the identified improvements into action. Consequently, these organizations miss out on the opportunity to use their value streams as an artifact that can be returned to and iterated on for ongoing learning.
Try these ideas to solve the problem:
- Define ownership for each stage of the value stream. Improvements fall to the wayside when it's unclear who’s responsible for the different steps of a value stream. Given the cross-functional nature of value streams, it’s important to clarify ownership to ensure follow-through. When mapping your value streams, identify owners for the different stages or processes. Those owners will know that they are accountable to the business for ensuring that their particular stage does not become a bottleneck.
- Create accountability by ensuring next steps are identified and prioritized. Identifying areas of improvement isn't enough. Ensure follow-through by identifying not only who will be accountable for what steps but also when those steps will be completed and how you will measure whether or not the improvements were successful. Keep track of this information in a central location so all teams and stakeholders can align on next steps and progress made.
Problem 3: Treating the process as a one-and-done activity
Value streams can offer tremendous potential for continuous improvement and strategic decision-making, but many organizations fail to revisit their maps as the business evolves. Instead, organizations should prioritize making the status and flows in the stream constantly visible. This information can be reviewed in leadership meetings and used to make decisions about where to adjust the system to meet changes in both strategy and demand. This ongoing component is critical to managing systems as they get progressively more complex.
Try these ideas to solve the problem:
- Define what the best-case scenario looks like for the product or service you're value mapping. Without a comparison, your value stream mapping will likely fall flat, and it will be more difficult to see what needs to change in your current process. Once you know what your best case might be, set meaningful KPIs that you believe will lead you where you want to be. Then track them and keep the team accountable.
- Be clear about customer value. Beyond understanding what value is added at every step in your value stream, be clear about the final value you are ultimately delivering to the customer. With that overarching statement, it can be easier to identify redundant steps or areas of work that aren't creating value. This applies both to the existing steps and any new ones unintentionally generated as you seek to drive improvement over time—that’s how some of those steps got there in the first place!
Value streams can be an incredibly powerful way to propel organizations forward on their agile journeys. Leaders who embrace value streams as a tool for continuous improvement will provide their organizations with the adaptability and alignment needed to stay competitive in a hybrid world.
Ready to dive deeper? Check out the step-by-step guide to value stream management.Check it out
About the author
Jeff Rosenbaugh, Sr. Director of Professional Services at Lucid, is a catalyst and coach who values outcome-focused solutions and customer obsession. With 13 years of experience working with technology inside a Fortune 5 company, Jeff brings unique insight into the challenges large organizations face with embracing a digital future, enabling an increasingly hybrid workforce, and dealing with high degrees of complexity.