Value Streams: Challenging the Way We Organize Around Value
Value Streams are not a new concept. Dr. Allen Ward was writing about them over 30 years ago in his work on Lean Product and Process Development. But until recently, there has been tremendous variability in how people actually define them. With the rise of the Scaled Agile Framework, more and more large organizations are adopting value streams into their business architecture to deliver value more efficiently.
The SAFe process of Value Stream Identification starts with your Operational Value Stream: the workflow your business follows to deliver value to customers. From there, you break it down into the systems that support that workflow. Once you understand the systems, you look at the people who build and maintain them and organize those people into Development Value Streams. It’s a solid and worthwhile process for software-oriented companies.
The challenge is that it goes straight from Step B to Step G without accounting for everything that needs to happen in between.
What Gets Skipped
In order to understand how to support your Development Value Streams, you have to first understand why your business exists, what value it actually delivers, and how you measure successful delivery of that value. And here’s the part that most organizations skip: it’s not ROI.
Once you’ve identified your currency of value and how you measure it, you still shouldn’t jump immediately to what systems you use to create it. Before systems, you need to look at what business processes you use to execute your Operational Value Stream. Once you understand those processes, then and only then should you look at how the people who execute those processes do their work: what systems they use, what organizational partners and vendors support their delivery.
Then you can move on to the rest of the traditional Value Stream Identification exercise.
But what happens when you don’t do this first?
The 127 ART Problem
I’ve seen it repeatedly. Organizations organize around systems, which leads to massively siloed functional teams and programs.
One large financial group I worked with had organized themselves into 127 Agile Release Trains, each with a specific system it maintained. Then as investments were made into large initiatives and programs, we found that the average initiative required dependency coordination across 70 to 80 of those ARTs. The overhead was staggering. The dependency management was relentless. And the end result was that this organization was less efficient after their transformation than before it, even with a greater understanding of their operational value stream.
This isn’t uncommon. Bad agility is worse than no agility at all.
If this organization had taken the time to understand the connections between business processes inside their value stream, they would have realized they didn’t need a dedicated ART for each system. They could have organized around groups of people aligned to achieving specific business purposes, which would have reduced the dependency surface dramatically.
The Function That Always Gets Left Behind
Starting with business processes also solves the single most common roadblock to successful value stream implementation: corporate functions being excluded from the model.
When you skip business processes, you forget to include supply chain, procurement, HR, legal, accounting, and finance in your Development Value Streams and ARTs. Over and over, organizations implement new ways of working only to discover that the role matrix doesn’t support them. Or that no one invited procurement to strategic planning, so the entire roadmap has to be delayed or emergency authorizations have to be granted. Or that finance didn’t understand the dependencies between programs and allocated resources against the wrong priorities.
When you start with business processes and break those down into systems, you naturally include those functions as part of the global view you apply to your value streams. They aren’t an afterthought. They’re part of the picture from the beginning.
The Complete Picture
Not only does aligning around business process enable faster flow of value, which is the whole reason most organizations choose to do Value Stream Identification in the first place: it also gives you a more complete picture of your organizational and strategic context.
The SAFe approach to value streams is great. It’s also incomplete until you bring the business along for the ride. The missing piece is not technical. It’s the understanding of what business processes your people are executing every day, why those processes exist, and how they connect to the value your organization actually creates.
Start there. The systems conversation becomes a lot easier once you know what you’re building them to support.