Value Stream Management

Value Stream Managers have the end to end accountability across the entire Value Stream. The ensure the work efficiently flows through the Value Stream as well as managing the dependencies between the segments. They also need to have a strong understanding of their customer and their needs, to then be able to ensure that the Value Stream is effectively fulfilling these needs. Combined they are ensuring their Value Stream is fit for purpose.

In most organisations, the only funding model available for non-Opex work is the project. Capex work = project. This leads to quite a few well-known problems. Having to continually stand up new project teams and then break up those successful teams once the work is done. The overhead of having to go through a project approval process, which because it is asking for money, is often long and onerous which limits the organisation’s ability to stand up important pieces of work quickly.

This blog describes the ten most common challenges I hear from business and tech leaders working in enterprise organisations worldwide through my role at Flomatika. It becomes clear that the most wicked challenges they face are common across countries, industries and domains. I believe that expanded awareness and understanding of these archetypal problems are vitally important in the work of transformation. The habits of our culture and ways of working can be challenged more effectively when we see them occurring. Analysing past behaviour is helpful, but it is not as powerful as observing the systemic behaviours in the present moment.

Value Stream Management (VSM) is the process of understanding the criteria that makes your product or service capable of delivering to your customers within the expected value, quality, and speed. It ensures your service level continues to fall within acceptable customer thresholds where you are considered to be fit for purpose.

Sensing complex adaptive systems such as Value Streams can be tricky. There is an endless number of metrics you could use to get a sense of how a Value Stream is operating. Using too many metrics creates noise, which distracts you. Using too little, you might miss critical health indicators. Below are the customer-centric and flow-based metrics we believe to be useful at a higher level of analysis.

The daily course of a Value Stream operation can be a bit messier than what we expect. While producing new value for customers and stakeholders, Value Streams need to stop here and there to fix unplanned defects and incidents, refactor existing areas of products to improve maintainability, evolve infrastructure capabilities, improve performance, execute security and compliance requirements, and provide support to functional areas.

Value Streams are defined by the constant flow of requests and deliveries of customer and stakeholder requests. As a rule of thumb, the customer is the one who requests and receives the value produced. Stakeholders, on the other hand, are parties with interest in either the production process or the value produced. Anyone that can either affect or be affected by a Value Stream.

The concept of Value Streams is over a century old. Probably, most notoriously dating back to Ford’s Model T assembly line in 1913, when the time required to assemble one vehicle was reduced from over 12 hours down to just 93 minutes. The cost ended up going down from the original $825 to $260 despite high inflation at the time. Ford’s mass production system came with a catch, however. He had a famous saying: "Any customer can have a car painted any colour that he wants, so long as it is black." Unfortunately, such a mass production system wouldn’t work later for Toyota. 

Value Stream Management (VSM) is the process of understanding the criteria that makes your product or service relevant to your customers and stakeholders, and ensuring your service level continues to fall within acceptable customer thresholds where you are considered to be fit for purpose.Put simply, VSM is all about maintaining fitness in the presence of a rapidly changing external environment. After reading this article, we hope that you can start seeing Value Streams where you could only see companies, divisions, teams, and individual contributors before.

If you’ve spent some time thinking about performance metrics and analytics, a lot of what we have included in Flomatika might already be familiar to you: Lead Time, Throughput, WIP. These are quite commonly used in the industry with lots of tools and plugins out there showing these, and some do quite a good job.One of our aspirations here at Flomatika is to build a best-of-breed Analytics Dashboard. In the pursuit of this, we asked ourselves what are some analytics we could introduce that would really make a difference in how we approach delivery performance? The data already resides in your work management system. It was a matter of slicing it and presenting it in a way that you could gain some additional insights. 

Today, after an extensive 12 month early-access program, we’re excited to officially launch Flomatika.Flomatika offers an Australian-built platform that brings the clarity and insight you need to fully understand your product delivery ecosystem. It enables you to discover sources of delay, identify constraints, and recognise opportunities to intervene. Flomatika will give you the power you need to improve speed, increase quality, and optimise value.No matter the scale and complexity of your organisation's delivery flow, analysing it is easy with Flomatika.

When looking at Lead Time for diagnosis it is important to look at the lead time distribution. Every work item completed gives you one sampling of lead time. As you continue to complete more and more work, you start getting more and more samplings of lead time, usually with different durations. If you sort your sample from the shortest to the longest duration, you have your “lead time distribution”. This is an important metric as it represents your time to market or your time to value. 

Anecdotally the feeling in the delivery organisation may be that delivery teams are overloaded, people are working long hours trying to keep up, but the demand is unrelenting. Leaders and stakeholders are frustrated, and this is manifesting in bad behaviours and a low trust environment. Key people are leaving, which only ratchets up the pressure on those that are left behind. 

This month the inaugural edition of the State of Value Stream Management Report was released, a significant piece of research produced by the VSM Consortium. The report identifies four practices and key findings. They are: Organising around Value StreamsDiscovery through Value Stream MappingInspection and Adaptation Through Value Flow AnalysisMeasuring and Acting on Value Realisation.

This last week was the release of the first State of Value Stream Management Report, which, among other things, provides a how-to guide on implementing digital value streams. One point the report makes is that organisations often believe they are not mature enough for value stream management. In my experience over the past several years working with organisations to optimise their value streams, I find this to be true, but it need not be a blocker.