The value stream is the sequence of work from concept to realization of value. We clearly want to get ideas out to our customers (whether they be internal or external) as quickly as possible. When we contrast the value stream with how most organizations are hierarchical in nature as well as how they manage people, the value stream highlights a significant challenge most organizations face. Essentially we manage in a top-down manner, while we should be attending to the flow of work across the organization.
The best way to understand where you are is to look at your value stream. The value stream can be thought of as the flow of work that takes an idea to the point of realization of value. Notice that what is most important is the realization of value because merely delivering product is of no value by itself.
You must attend to the total time from start until your organization or your customers realize value from your efforts.
To understand this, consider a common organization’s structure:
Figure 1: Common organization structure
Most organizations exhibit some form of hierarchy. In this type of structure, it is natural for managers to consider if their people are properly utilized, being productive, doing quality work and are working on the right things. In other words, we manage in a top-down fashion.
However, realizing value does not occur in a silo. Our work typically goes across an organization as shown in Figure 2.
Figure 2: Work flowing across the value stream
In Figure 2, the red arrows are the actions of getting approval. Note that these actions in and of themselves add no value. Also, a real value stream would not be such a nice flow from left to right but would go forwards and backwards. When you look at the total time from start to realization of value, you begin to see the need to attend to time-to-market, your ecosystem, visibility, effects of upstream groups on a team, and the effects of a team on downstream groups. The value stream is where the work actually takes place, as illustrated in Figure 3.
Figure 3: The value stream
By comparing Figures 2 and 3, you can see that natural conflict that arises: it is common to manage work in one way but it actually flows a different way. This is illustrated in Figure 4.
Note how our work is being managed from a top-down point of view even though our work flows another way. This is our inherent challenge to overcome.
Figure 4. Managing work in one way even though the work flows another way
Focusing on our people tends to have us take our eyes off the flow of work and focus on where the work is being done. But this takes our eyes off of two important things- 1) how much is the work waiting, 2) how is the environment within which the work is being done helping or hurting us.
Instead, we tend to focus on the productivity of the individuals in this workflow and implore them people to work harder. We should be focusing on creating a better eco-system within which they should work. This shift is a central tenet of Lean and is incorporated into SAFe. Another issue is that no one is managing the value stream well. In most companies it’s a combination of people with this responsibility. It needs to be called out explicitly.
Imagine the work in your organization, how much of the time is the work waiting for someone to be available? How much does making sure everyone is busy contribute to this? How well can you see the cause and effect of keeping people busy and the actual impact it has on the work going from concept to consumption?
We illustrate the work people do in a flow diagram because the intent is to go from selection to realization quickly. Note that these are shown linearly but in fact they are done interactively and with continuous feedback. This example also does not include what heavily regulated companies (such as health equipment makers and insurance companies) or companies with hardware and software components. Lean Thinking helps attend to these additional factors.
Considering the value stream provides key insights
Value stream mapping is the best way to learn what is being done in your organization. We have seen many people in the same organization have different understandings of what is going on. A value stream map enables everyone to get on the same page. A general sense of an organization’s workflow is critical to see what is happening.
However, once one considers that our efforts are on realizing value (the flow from left to right in Figures 2 and 3) and not on managing each group for local optimization, it becomes clear what the root causes of many of the challenges include:
- People are busy but there is so much work going on any one piece of work stops and starts as it waits for available capacity
- Much rework is required because of delays in feedback
- Too many things are in play
- The chunks of work are too big
Delays cause much of the work that people have to do. The value stream is often the best way to see these delays.
By attending to the value stream and the challenges that occur, you can see where to put your attention for improvement.
|Old style checks that people are…||Lean attends to …|
doing quality work
working on the right thingsThis is a focus on efficiency
ecosystem / visibility
effects of upstream groups on their teams
effects of their teams on downstream groupsThis is a focus on business agility
Success is more strongly correlated to Business Agility than efficiency.
Note: The following video from 7:17 on (2:30 minutes) has some material not covered here.
If you are using SAFe
SAFe sometimes conflates value streams with the people in the value stream (long -lived value streams. See The Value Stream in SAFe for more on this.