Debunking Common Myths for Successful Adoption of VSM

Authors: Ravi Sawant, Sharat Kunduru

Previous Article

Article 10

Overview

Enterprise leaders are increasingly captivated by the transformative potential of concepts like Value Stream Management (VSM) in revolutionizing how organizations deliver value to their end customers. However, like any groundbreaking technology, VSM is not immune to misconceptions. It's often surrounded by a veil of mystery, leading to varying misunderstandings. These range from perceiving VSM as an overwhelmingly complex concept necessitating a complete organizational overhaul to the oversimplification of thinking it's merely about procuring and implementing a platform or tool.

Picture your team receiving a directive from leadership to delve into researching, evaluating, and devising a business plan for adopting VSM within your organization. In this blog, our aim is to bring to light common misconceptions derived from our conversations with diverse customers. This information is designed to assist you in crafting a robust business plan and strategy for successful VSM adoption. We'll categorize these misconceptions into two main groups:

• VSM strategy-related misconceptions
• VSM tools & frameworks-related misconceptions

This classification will serve as a guide, helping you navigate through the intricacies and establish a clear path towards effective Value Stream Management within your organization.

VSM Strategy Related

Misconception: VSM is an All-or-Nothing Endeavor

The misconception that Value Stream Management (VSM) must be an all-or-nothing endeavor, implemented throughout the entire organization or not at all, is inaccurate. VSM presents itself as a flexible approach that, in practical scenarios, is best adopted incrementally. Organizations can initiate this process by targeting specific processes or areas, gradually extending implementation to cover the entire value stream. This approach ensures a more manageable and adaptive adoption, aligning with the organization's specific needs and priorities.

The fear of a daunting organizational restructuring around value streams, coupled with concerns about transforming funding practices and investing in new tools or competencies, often inhibits organizations from embracing VSM. While these elements are indeed necessary and can yield tremendous value when implemented correctly, they can be integrated gradually and incrementally.

Our Guidance:

Begin the journey by optimizing a single value stream and leveraging that success for further expansion. To prioritize and shortlist value streams for the initial Proof of Concept (POC), consider the following guidelines:

• Choose a value stream that directly impacts customer value.
• Ensure alignment with business objectives, making it a critical part of the overall business strategy.
• Involve cross-functional teams in the value stream.
• Identify a compelling change event in the value stream, such as leadership dissatisfaction with current practices, issues related to the team's quality outcomes, or a lack of visibility.

The goal is to select a value stream where leadership is keen on changing the status quo, and there is less change resistance from the team due to a prevailing sense of urgency. With the right sponsorship and minimal resistance, the team can concentrate on mapping and optimization efforts instead of being hindered by internal cooperation challenges.

Misconception: VSM is Internal Transformation, So Customers Can Be Kept Out of It.

In our engagements with various organizations, we've encountered teams who perceive Value Stream Management (VSM) as primarily an internal organizational transformation, excluding the end customer who ultimately benefits from the value generated by a value stream. This perception is far from the truth. Customers, through their needs and expectations, are the driving force behind organizational change. The ultimate goal of VSM adoption, or any transformation, is delivering higher value to the end customer, and excluding them from the loop can lead to outcomes that fail to meet their needs.

For instance, if one of your VSM adoption objectives is to accelerate the pace of product delivery, say from one release per year to four releases per year, seeking feedback from customers is crucial. Without understanding if they are ready for such a change, the effort might be in vain.

Our Guidance:

• Start with the End Customer: When identifying the value stream to transform, begin with the end customer who receives value from the stream. This could be either an internal customer (in the case of a development value stream) or an external customer (for an operational value stream).
• Map the Customer Journey: Identify the customer journey map and various touchpoints where the customer interacts with the value stream. This deepens the understanding of customer expectations and pain points in each touchpoint, leading to the definition of overall business objectives and areas of improvement for the value stream.
• Communication Strategy: Ensure a well-defined communication strategy that outlines how and when the customer will be informed, along with the benefits they will receive due to the value stream optimization exercise. This can turn the customer into a champion and a change agent in the journey.
• Leverage Customer Feedback: Continuously leverage your customer to provide feedback on optimization plans before, during, and after implementation. This iterative feedback loop is crucial for further optimizing the value stream after initial efforts.

Note that a satisfied customer is the ultimate goal of any value stream optimization effort, making it imperative to keep the customer at the center of this transformative journey.

VSM Tools & Frameworks Related?

Deciding whether your organization needs to adopt a new framework or tool for Value Stream Management (VSM) is a key dimension of a VSM strategy. However, common misconceptions often surround tools and frameworks during VSM adoption. Let's explore these misconceptions:

Misconception: VSM can be adopted by implementing a VSM Tool

This misconception extends beyond VSM to many business changes within organizations. Tools or technology serve as enablers for change but can never be the complete answer to the complexities of driving process optimization, cross-functional collaboration, and cultural change. VSM, being an end-to-end optimization concept, requires understanding that no single tool can serve as a complete end-to-end enabler. For example, in the below illustration, each stage of the value flow demands matured tools and platforms tailored to optimize processes in that specific stage.

In that case, how do various technology vendors claim that their tool can implement VSM?

Various technology vendors claim that their tools can implement VSM, but the reality is more nuanced. Most existing technology vendors have their foundations in specific stages of the VSM lifecycle, as highlighted above, and their goal is to expand their portfolios to offer capabilities across the entire lifecycle. For example, traditional Project and Portfolio Management (PPM) vendors, specializing in Strategic Portfolio Management (SPM), may integrate with tools across other stages to provide a holistic value stream experience. Similarly, vendors in the DevOps and Application Lifecycle Management (ALM) space may extend their reach into SPM and strategy management.

Organizations should exercise caution, acknowledging that vendors, driven by their domain strengths, may promote VSM capabilities from the vantage point of their product stack. For instance, a vendor with a focus on DevOps or Agile may highlight software delivery performance, but it's essential to recognize that the objectives of VSM go beyond speed and performance alone. On the other hand, a PPM or SPM vendor might emphasize portfolio optimization and strategic alignment, potentially overlooking the importance of detailed work planning and DevOps —elements crucial for the success of VSM.

Our Guidance:

While each of these tools contributes value to different stages of the value flow life cycle, the true benefit lies in optimal utilization—leveraging these tools through integration, insights extraction, and orchestration to facilitate end-to-end process optimization.

For instance, if achieving speed-to-market is a key business objective in VSM adoption, organizations should consider integrating all the tools involved in the workflow to capture entry, exit, and wait times in each tool. This approach provides valuable insights into cycle time and identifies areas for improvement. Similarly, if enhancing visibility into the value flow is a primary goal, extracting key data points from each tool in the lifecycle, aggregating them, and generating useful analytics can be the solution.

Here, Enterprise Architecture plays a pivotal role in defining the overall tooling architecture and landscape to support VSM efforts. It should be a key component of any VSM strategy, where, based on business objectives, decisions are made regarding necessary changes in various tools within the value flow. Additionally, it helps assess whether additional tools are required to aid in data aggregation, integration, or orchestration of the value flow.

Misconception: “We Already Do Agile and DevOps, So We Don’t Need VSM”

There are many customers who believe that adopting agile delivery within their organization is the same as implementing Value Stream Management (VSM). However, Agile and Value Stream Management (VSM) are not synonymous.

Agile, as commonly understood, is a specific methodology for work delivery that emphasizes iterative development, collaboration, and continuous customer feedback. Moreover, the Agile journey varies among different customers. Some may implement Agile within a few teams in the IT department (as that's where it initially started for many), while others may have adopted Agile throughout their IT structure. A few organizations may have even scaled Agile to the Program or Solution level.

Agile, in its common interpretation, has undergone a transformation within organizations. It has become nearly synonymous with groups of coders, developers, or engineers operating in different teams focused on development. While this approach empowered developers to take charge of decisions related to product development, it unintentionally erected substantial barriers between business and IT teams. This empowerment, while beneficial in certain aspects, posed challenges such as hindered transparency and limited visibility due to the way they got implemented. The implications of this shift are evident in the evolving dynamics between business and IT teams.

On the other hand, VSM is a broader approach that encompasses the entire value delivery process, from idea to implementation, with the goal of optimizing the flow of value to the customer. While Agile is typically a component of VSM, the latter provides a more holistic view that extends beyond specific methodologies. VSM aims to improve the overall efficiency and effectiveness of the entire value stream. The illustration below demonstrates the relationship between Agile, DevOps, and VSM, emphasizing their interconnected roles in the value delivery process.

Our Guidance:?

While Agile and DevOps have undoubtedly transformed IT delivery and maintenance, it is essential for IT and business leaders to consider the following imperatives beyond Agile and DevOps and embrace VSM:

• Delivery Alignment: While Agile and DevOps enable IT to ensure the delivery of high quality products at speed, a critical question arises: Are they truly delivering the right things? Regardless of the speed and quality achieved, if the features delivered do not meet the needs of customers, it results in organizational waste. VSM plays a crucial role in aligning both aspects, ensuring that IT is not merely delivering efficiently but is also delivering the right solutions that meet the genuine needs of customers.
• Business Objectives Visibility: Team-level Agile often confines teams to focus solely on the work that needs to be delivered, typically in the form of user stories or features. This narrow focus may result in a lack of visibility into larger business objectives or initiatives that their work is driving. VSM addresses this limitation by enabling visibility at all levels, aligning the work with broader business goals. This alignment not only provides a holistic view but also greatly motivates IT teams when they can clearly see the value their work is generating for the business.
• Release Cadence Alignment: Agile and DevOps have significantly accelerated the pace of IT delivery, empowering IT to develop, test, and integrate new features rapidly, sometimes even on a daily / weekly basis. However, the challenge arises when these features accumulate as unused inventory, waiting to be deployed for end-users. VSM comes into play by facilitating the alignment of IT iterations with overall business release cadences. This strategic alignment not only ensures timely deployment but also allows IT to plan and utilize their teams more effectively, preventing the buildup of unused features and optimizing resource utilization.

Misconception: “We don’t do Agile, so VSM doesn’t apply for us”.

This is a prevalent misconception, particularly among highly regulated teams or organizations. Such teams often refrain from adopting agile ways of working due to reasons such as working towards a fixed scope, lack of flexibility with releases or iterations, the risk-averse nature of customers, and security requirements preventing cross-team collaboration. Historically, these teams have predominantly relied on stage gate processes for their delivery needs.

Our Guidance:

Surprisingly, VSM can offer valuable assistance to highly regulated teams without necessitating a transformation into agile ways of working. The following key VSM dimensions can benefit such teams.

• Process visibility and optimization – Whether following agile practices or not, VSM can enhance visibility into the end-to-end flow of value for such teams. This increased visibility contributes to better optimization of processes, regardless of the chosen delivery methodology.
• Compliance management – This can be one of the greatest advantages of adopting VSM in highly regulated environments. As part of VSM, once teams map out the entire value stream, necessary compliance requirements can be enforced where necessary in the flow and verified for adherence. Additionally, a clear value stream map facilitates detailed auditing of each step of the value flow, further contributing to compliance efforts.
• Risk management – Another crucial advantage that VSM can provide, particularly for teams that are highly risk-averse due to their business requirements. For instance, a pharmaceutical company can create a value stream map of its product development process, assign a risk score to each step in the map, and calculate the overall risk score of the process. This enables the definition of strategies to reduce the overall risk score.

Summary

In delving into the prevalent misconceptions surrounding Value Stream Management (VSM), we embark on a journey that goes beyond mere identification. It's about acknowledging the intrinsic uniqueness of each organization's path to VSM transformation. Unraveling these myths is just the first step; the real crux lies in the strategic approach organizations adopt to navigate this distinctive journey.

At the core of this strategy is the team steering the VSM ship. It's a delicate blend – a fusion of leaders, practitioners, and domain experts. This team, backed by the right organizational credibility and sponsorship, mirrors what John Kotter terms a "Guiding Coalition." This coalition becomes the driving force, ensuring that transformation efforts intricately align with overarching business objectives.?

The blog emphasizes the pivotal role of this guiding coalition in transcending biases and dispelling misconceptions. It underscores the importance of staying focused on the broader vision, avoiding sway towards specific frameworks, products, or vendors. This approach empowers organizations not only to unravel myths but also to proactively carve a strategic path tailored uniquely to their objectives. Thus, the true essence of this thought leadership article lies in recognizing the transformative power of a well-rounded, motivated, and committed team – the heartbeat of successful VSM adoption.

Stay tuned to learn more about VSM and digital transformations in our next thought leadership article!