In spite of long-term investments in such disciplines as agile, lean, and DevOps, many teams still encounter significant product challenges. In fact, one survey found teams in 92% of organizations are struggling with delivery inefficiency and a lack of visibility into the product lifecycle.[1] To take the next step in their evolutions, many teams are pursuing Value Stream Management (VSM). Through VSM, teams can establish the capabilities needed to better focus on customer value and optimize their ability to deliver that value.
While the benefits can be significant, there are a number of pitfalls that teams can encounter in their move to harness VSM. These obstacles can stymie progress, and erode the potential rewards that can be realized from a VSM initiative. In this post, I’ll take a look at four common pitfalls we see teams encounter, and provide some insights for avoiding these problems.
Pitfall #1: Missing the value
Very often, we see teams establish value streams that are doomed from inception. Why? Because they’re not centered on the right definition of value.
Too often, teams start with an incomplete or erroneous definition of value. For example, it is common to confuse new application capabilities with value. However, it may be that the features identified aren’t really wanted by customers. They may prefer fewer features, or even an experience in which their needs are addressed seamlessly, so they don’t even have to use the app. The key is to ensure you understand who the customer is and how they define value.
In defining value, teams need to identify the tangible, concrete outcomes that customers can realize. (It is important to note in this context, customers can be employees within the enterprise, as well as external audiences, such as customers and partners.) Benefits can include financial gains, such as improved sales or heightened profitability; enhanced or streamlined capabilities for meeting compliance and regulatory mandates; and improved competitive differentiation. When it comes to crystalizing and pursuing value, objectives and key results (OKRs) can be indispensable. OKRs can help teams gain improved visibility and alignment around value and the outcomes that need to be achieved.
Pitfall #2: Misidentifying value streams
Once teams have established a solid definition of value, it’s critical to gain a holistic perspective on all the people and teams that are needed to deliver that value. Too often, teams are too narrow in their value stream definitions.
Generally, value streams must include teams upstream from product and development, such as marketing and sales, as well as downstream, including support and professional services. The key here is that all value streams are built with customers at the center.
Broadcom
Pitfall #3: Focusing on the wrong metrics
While it’s a saying you hear a lot, it is absolutely true: what gets measured gets managed. That’s why it’s so critical to establish effective measurements. In order to do so, focus on these principles:
- Prioritize customer value to ensure you’re investing in the right activities.
- Connect value to execution to ensure you’re building the right things.
- Align the execution of teams in order to ensure things are built right.
It is important to recognize that data is a foundational element to getting all these efforts right.
It is vital that this data is a natural outcome of value streams — not a separate initiative. Too often, teams spend massive amounts of money and time in aggregating data from disparate resources, and manually cobbling together data in spreadsheets and slides. Further, these manual efforts mean different teams end up looking at different data and findings are out of date. By contrast, when data is generated as a natural output of ongoing work, everyone can be working from current data, and even more importantly, everyone will be working from the same data. This is essential in getting all VSM participants and stakeholders on the same page.
Pitfall #4: Missing the big picture
Often, teams start with too narrow of a scope for their value streams. In reality, these narrow efforts are typically really single-process, business process management (BPM) endeavors. By contrast, value streams represent an end-to-end system for the flow of value, from initial concepts through to the customer’s realization of value. While BPM can be considered a tactical improvement plan, VSM is a strategic improvement plan. Value streams need to be high-level, but defined in such a way that they have metrics that can be associated with them so progress can be objectively monitored.
Tips for navigating the four pitfalls
Put your clients at the heart of your value streams and strategize around demonstrable and measurable business outcomes.
Value streams are often larger than we think. Have you remembered to include sales, HR, marketing, legal, customer service and professional services in your value stream?
Measure what matters and forget about the rest. We could spend our days elbow deep in measuring the stuff that just doesn’t help move the needle.
Learn More
To learn more about these pitfalls, and get in-depth insights for architecting an optimized VSM approach in your organization, be sure to check out our webinar, “Four Pitfalls of Value Stream Management and How to Avoid Them.”
[1] Dimensional Research, sponsored by Broadcom, “Value Streams are Accelerating Digital Transformation: A Global Survey of Executives and IT Leaders,” October 2021
