Five Lessons Learned on My Value Stream Management Journey (Part 2)

  • December 19, 2022

Value Stream Management can be a great way to organize work around delivering optimal value to your customer, but only if you understand the potential pitfalls. Part 1 of my “Five Lessons” identified key factors to consider as we plan and implement VSM practices. Let’s revisit the five lessons as they intersect with these three failure factors.

Local optimization Proxy metrics Unchecked assumptions
The why: Customer needs, what they value, and how they validate that value

Watch out for serving favorites without considering the whole.

Understand your customers' needs, and define what value means to them. What do you value most, given your “North Star” strategic mission? Start by aligning your mission’s goals and objectives with defined values that match the market mindset. Refuse to be myopic and optimize apart from the whole. Consider all customer personas and understand every facet of their customer journey.

Avoid output-based substitutes for outcome-based objectives. Though helpful in other ways, proxy metrics such as the number of agile teams, people trained, points delivered, or even velocity are nothing more than an IT “velo-sophy” to customers and business leaders.

When seeking to understand your customer (or anyone), check assumptions before they become someone’s unspoken understanding and/or expectations. Understand what your customers need and value and how they validate that value. When you align workflows and technology around your customer goals, your organization can deliver better customer value sooner and safer, making everyone happier
What: Alignment of products and services to value streams Align end to end and find bottlenecks in the overall flow. Get a good sampling of your customer’s voice, not just some, somewhere, or at some time. Know the end-to-end flow and choose key results that define success for each desired outcome. Following the Objective and Key Results (OKR) method, each outcome should have 3–5 measurable results. Any more smells of proxy metrics. For example, the outcome of being a trusted advisor in the eyes of 9 out of 10 customers is measurable. Percent Complete and Accurate (%CnA) is good data to have and hard to get to ground truth (especially without a solution to “see” this back and forth in the flow). This can be one of the biggest inhibitors to flow. Low %CnA often illuminates other needs in the E2E value stream flow.
How/How much: Management of bottlenecks Avoid examining isolated areas of the value stream or individuals. Look across the value stream for E2E lead time, strengthen the weakest area, then find the next weakest. Know what measures matter for flow. Apply flow metrics. Bottleneck discovery is often tainted with unspoken assumptions. CYA! Check your assumptions. Big lessons are learned here!
Who: Engaging people in continuous learning and improving Avoid imposing change and change leaders. Welcome those who are willing. You’ll soon discover they are able and influential. Avoid force-fitting change aimed at certain areas of the organization or end-to-end flow in the value stream. Apply team incentives, and let the team sort the details. Avoid individual and proxy metrics. Consider the Ohio State Buckeye football team. When their coach changed recognitions from individual to the team level, their not-so-great team quickly became the best. Listen for assumptions in interactions. Unspoken expectations are like snakes in the grass. You don’t know they’re there until you get bit. Check your assumptions.
Where and when: Pursuit of progress and learning By not looking at E2E in the value stream, progress may be remarkable in one area of flow and yet look stagnant in another. Looking at wheels spinning versus distance and direction fail to measure what matters. Avoid proxy metrics here as well. A number of bricks doesn’t define a wall. Watch for unchecked assumptions when measuring progress: Revolutions per minute are not the same as miles per hour, speed is not the same as distance, and distance is not the same as destinations reached.

Final thoughts

While I’ve learned many things on my journey, the most important is that there is a reason Agile’s cornerstone value is individuals and interactions over processes and tools. There is much to be learned and leveraged to improve the flow and quality of value to our customers. The biggest lesson for me is getting to know your customers and asking what they value. Be obsessed with your customers. Be their customers. Learn their experiences and how they feel. Eat what they cook. Wear what they make. Talk to them. More importantly, close your mouth and open your ears. Understand and empathize. Learn to hear assumptions — particularly your own — and check them as soon as you identify them. This alone will enable better outcomes for your value stream management activities. Another key is that leaders must go first! Leaders need to be models and instill change by example. It doesn’t matter how leaders look, however, or even what they say; what matters most is what they do. And people who do are the leaders.

This combination is crucial to improving any organization’s value delivery. Regardless of Why, What, How, How much, When, or Where, the Who, the people are at the heart of the flow of value. Value Stream Management is an ongoing collective activity, not an assigned role. Everyone gets involved in managing and improving the flow of value streams.

Jim Rice
Jim is a certified enterprise business agility strategist and professional agile coach who has consistently and successfully cultivated high-performing teams and organizations that deliver better value sooner, safer and happier for clients. He helps them avoid digital disruption and helps make the transition to becoming a future-ready organization that is focused on value creation.

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