A “value stream” is often defined as the process that creates a product or service for which your customers are willing to pay. This definition, while technically accurate, is too vague. That’s a problem because getting value streams wrong can cause long-lasting and far-reaching damage for your organization. On the other hand, getting it right can help you stay competitive.
Successful value streams follow lean principles and put customer value at the center of work. They ensure that an organization continuously increases customer value and eliminates waste.
Here are five things to keep in mind as you create your value streams:
1. Start at the Beginning
Who best understands which factors your customers value? It’s usually not someone in IT. Many value streams do, however, only include the teams associated with DevOps. Good value streams start with the teams that understand features and services that customers value. These individuals can also quantify value based on customer feedback and market research. Without understanding your customers’ needs and expectations, you can’t know if any of the work being done is actually valuable.
2. Include All the Players
Do your products or services need to pass legal reviews or external audits? Do the new features have an impact on contracts? Do you need to update marketing teams or train support agents? Value streams should encompass more than just the development and delivery of a product. All people who are involved in the creation and approval of the product should be included when defining value streams. Leaving them out can cause critical delays in value realization.
3. It’s Not All About Speed
Many companies are trying to speed up development, and yet they aren’t creating anything of value. It doesn’t matter how fast you go if you’re creating something no one wants to use. Leaders in many organizations still admit they make funding decisions based on who’s asking—and how loudly—rather than any objective criteria. It’s time to fund only what your customers will find valuable, or things that will enable more of your organization to focus more effectively on customer value.
4. Find the Chasms
Almost every company has a gap in data; in arecent Dimensional Research survey, 97% of organizations said that data-related challenges are limiting the information available to the business. Either teams can’t trace how strategies break down, or they haven’t put in dashboards at every level to track work. Data must be usable and manageable for every level in the organization. Individuals, teams, managers, directors, vice presidents, and C-levels should all have dashboards and an appropriate level of metrics.
Breaking work into discrete pieces is critical. There is too much lost in translation when incremental steps aren’t defined. Work breakdowns should look something like this: Objective > Epic > Capability > Feature > Story > Task.
5. Know Your Work in Progress
Work in progress isn’t just for front-line teams; it needs to be tracked across the entire value stream. When you map the entire value stream, you can see not only the volume that work teams complete, but also the quantity of demand in the backlog. Too much demand can indicate that the hard trade-off decisions aren’t happening at the strategy levels, where they need to occur. Even when development and delivery teams speed up, the backlog continues to grow.
Ultimately, the ability to skillfully employ value stream management can play a make-or-break role in the entire organization’s long-term prospects. Value streams can be very powerful—but only if they include, and are clearly understood by, all levels in an organization. By addressing the five tips above, your teams can improve your use of value streams and ensure they help optimize the delivery of high-value offerings to market.
Laureen Knudsen is an award-winning senior business leader with 15+ year career that spans IT, financial and healthcare systems, and analytics. Co-Author of Modern Business Management: Creating a Built-to-Change Organization. Laureen leads a team of experts working to define the future of business to bring Lean principles and agility to all parts of an organization, focusing on optimizing end- to-end process flows and removing waste.