In today’s fast-changing world, organisations need to be able to pivot quickly and adapt to unpredictable market conditions to stay ahead of the competition. Being flexible and implementing agile practices in the delivery of products may speed up time to market, but it can also carry a damaging consequence; losing sight of the original value proposition. Embracing Value Stream Mapping (VSM) brings value to the forefront of every decision a team makes, thus minimising wasted time and maximising profitability.
WHAT IS VALUE STREAM MAPPING?
Value Stream Mapping (VSM) is the practice of capturing the steps involved in selling products (online and offline), from generating awareness to receiving revenue through sales. This lean agile development method highlights waste as well as the dependencies on organisational structure and IT systems to ensure investments provide the highest possible returns. Simply put, value streams are customer journeys with people, systems and commercial data overlaid.
To maximise ROI, the entire team - from senior leadership right down to the project teams - needs to have a shared understanding of value.
A shared understanding of value is your greatest weapon for controlling the cost of delivering any product.
Well defined value streams keep the entire team focussed on the ROI throughout the delivery cycle time so that they constantly question the value of every feature they are delivering.
Here are six recommendations to help organisations work towards value focussed delivery:
#1 - Product not project
In order to successfully maximise value, a product needs to be developed as a product from day 1. For a sure fire way to develop and test your product innovations ahead of your competitors, read our recent blog: 5 Recommendations for Successful Lean Product Development.
However, let’s take it up a level. Lean agile development is a completely new approach for a lot of organisations. Before self organising teams are invested in and let loose on a product portfolio, there needs to be a way to visualise value outcomes at the business strategy level, followed by a method to ensure the entire team is aligned to those outcomes.
#2 - Map value streams before building business cases
Does everyone understand how the company makes money? Are customer journeys measured so you can track conversion progress each step of the way? Do you know what impact sales conversations have on systems and organisational departments?
Having the answers to these questions upfront will dictate where and how to invest. A decent business case should carry a strong hypothesis for how ROI will be defined, which sets the direction for product development.
But this isn’t enough. As development teams need to make difficult decisions and compromises in order to “complete” the product in a way that is deemed successful by the organisation, defining a clear value stream will set a foundation to enable all team members to make clever decisions.
#3 - Business sponsors own epics, not project teams
Epics essentially become business cases for investments. They will have a clear hypothesis based on value streams and backed up by commercial data outlining the ROI. Manage epics independently of development teams and ensure visibility of epics to the entire team.
#4 - Development teams must track work back to epics and value streams
Give development teams the freedom to decide on the features to improve upon based on the epics and KPIs provided. Features must have a hypothesis based on an epic so that underlying user stories have a customer centric statement that can be tracked all the way back to a value stream (a defined customer journey).
#5 - Celebrate and reward measurable value, not milestones
It’s not enough to just clap and cheer during the demonstrations of new features delivered by the development teams (although this should still be done). It’s important to recognise the success of releasing value through data led measurement.
Does the revenue uplift or operational savings indicate return on investment? Is this on target? Don’t aim for ‘big bang’ as improvements can only be tracked by receiving feedback.
The sooner that feedback is received, the sooner a direction can be changed if a product or service is underperforming. Business sponsors also need regular reassurance that things are heading in the right direction. Releasing value from customer journeys frequently provides real data to demonstrate this.
#6 - Ensure alignment on value across the entire team
Misaligned value creates deeper problems:
Additional, unexpected work
Issues with prioritisation
Building unnecessary features
Mismanagement of change
A gap between delivery and expectation
All of these cost money and waste time and with agile methodologies, we don’t like waste. Make sure value streams are accessible to all team members and everybody understands them and where they fit within them.
So in essence, to move towards value focussed delivery, map value streams and use commercial data to measure returns. Create a shared understanding of value across the entire team and entrust development teams to deliver against value streams and epics.