Use value stream maps to accelerate agility
Use value stream maps to accelerate agility
Visualizing how value is delivered can help build the leadership support and reduce the resistance that often stands in the way of increasing agility.
Enabling your organization to become more agile is worth striving for. A recent McKinsey survey1 found that “Highly successful agile transformations typically delivered around 30 percent gains in efficiency, customer satisfaction, employee engagement, and operational performance; made the organization five to ten times faster; and turbocharged innovation.”
However, only 30 percent of agile transformations achieve such impressive improvements in business performance. According to the most recent State of Agile Report2, the key challenges have remained the same for the past several years: Organizational culture, resistance to change, lack of leadership support, and lack of skills.
The essence of an agile transformation, according to McKinsey, is reimagining the organization as a network of high-performing teams supported by an effective, stable backbone of strategy, structure, processes, people, and technology.
Most agile transformations, however, are not born as organizational transformations. Agile adoption typically starts in software development teams and may be viewed as an “IT thing,” which is far from “reimagining the organization as a network of high-performing teams.”
The results of highly successful agile transformations are achieved when the entire value chain is encompassed, which requires involvement beyond software development.
But how do you develop the leadership support you need to extend agile practices to the entire value chain and overcome resistance to change?
Value Stream Mapping can help you get there.
Maps visualize inefficiency and complexity
A value stream map visualizes the steps in getting a product or service from idea to value delivered to the end consumer. Value stream mapping is not new. It originates from Lean and has been used for decades.
Below is a simplified map of a software product value stream, starting with a new customer need being identified by the Sales team and finishing with the customer achieving the desired outcome.
The bottom boxes show the processes and people involved in the value creation workflow. The top boxes show how information flows through the supporting systems.
The map above is pretty simple. However, in a large organization, it often is not. Many organizations are organized functionally and have siloed views of how value is created, which results in unawareness of complexity and inefficiencies.
Creating a value stream map provides a visual overview that can facilitate discussions around inefficiencies or unnecessary complexity in the flow of work.
One example is the number of handovers. Are they all necessary? Where do delays occur? Whenever work transitions from one person to the next, information could be incomplete or lost in translation. Hence fewer handovers are better. If people are in different parts of the organization, a difference in culture or priorities could affect the workflow.
A simple visual overview helps shed light on the discussions to be had.
Joint map creation builds leadership support
The basis of productive discussions is that everyone agrees the map represents the value stream accurately. Such agreement is best achieved by involving the leaders of all the organizational units participating in the value stream in creating the map.
The leaders accountable for the value creation have the power to make change happen. Involving them builds leadership support for making changes that accelerates agility. The shared overview helps get the leaders better aligned around what needs to get done.
The discussions necessary to make improvements are elevated from the individual function to the company level, where cross-functional changes must be discussed.
Improvements are easier to identify and prioritize
The objective of improving business agility is to enable the organization to respond faster to changing customer needs. When the processes making up the value stream are mapped, further data analysis can add insights making it easier to identify and prioritize improvements.
The total time it takes for a new request to go through the value stream and deliver value to customers is an expression of your agility. Reducing this time without sacrificing quality or employee engagement increases your agility.
Lead Time is the Lean expression for the time it takes to complete a process step. The Lead Time for each process step must be determined by consulting the people doing the work. In some cases, workflow tools have some of these numbers. Using a recent request can make it easier to get more precise estimates.
Three metrics provide insights that can be used to identify and prioritize improvements:
Lead Time (LT) = The time from work is made available to it is completed and made available to the next in line
Process Time (PT) = The time it takes to complete the work
Percent Complete and Accurate (%C@A) = The percentage of time the work received from the previous process step can be processed without being corrected or amended - It reflects the quality of the work output.
The example in Figure 3 shows that the total Lead Time to deliver on a new customer need is 88 days. However, the time it takes to do the work is only 26 hours, which means the work is idle 98,8% of the time. The Activity Ratio is the percentage of time work is in an active state and is an expression of the value stream flow efficiency.
Numbers like these make the need for improvement very obvious, which should help reduce the resistance to change. The Lead Time and Percentage Complete and Accurate for each process step are helpful when prioritizing where to start. A larger difference between Lead Time and Process Time is an increased opportunity to reduce waste. A low Percent Complete and Accurate number indicates the need for improving the work quality in the previous process.
The value stream metrics provide a data-driven starting point for more detailed analysis, uncovering needed improvements.
Customer value becomes a shared motivating goal
Improving business agility is a continuous effort to help teams work better together utilizing modern practices and technology. Sending everyone off on agile training and adopting agile rituals is only a step on the way.
Taking a value stream view of your products and services, mapping how you work, and attaching the right metrics can guide the iterative process.
All leaders should be able to rally around achieving the results that highly successful agile transformations do. Making the journey inclusive and focused on meaningful changes can help reduce resistance, build leadership support, and ultimately change your culture.