Blog: How Value Streams Support Your Strategic Focus

How Value Streams Support Your Strategic Focus

Most organizations fail to execute their strategies. There are many interrelated reasons for failure – enough to write a book about. One common problem is a lack of strategic focus. Many do not even know what the organization’s strategic objectives are, yet alone how the work they are doing every day supports the strategy, or even the team down the hall (so to speak). This is a problem rooted in a myopic view of one’s work and the impact it has across the organization.

90% of organizations fail to execute their strategies.*
One common problem – lack of strategic focus.

How is the work divided up within your organization? Do you have project teams building out defined scope? Do you have product teams focused on their slice of the business? Maybe you are connecting teams via Scrum of Scrums or Scaled Agile Framework. Lean organizations are trying to optimize the flow of value by calling that a “value stream” and mapping the most efficient way to deliver to it. Is that optimization for operational efficiencies or strategic alignment?

Value streams can support a strategic focus within your organization. Like most concepts, however, it can often be misunderstood. For example, what many are calling Agile is not Agile. This led me to write my book, Pursuing Timeless Agility: the Path to Lasting Agile Transformation. What strategy and strategic objectives are is also misunderstood. I’m working on unpacking that problem, too. So, before I go further into how value streams support your strategic focus, let me briefly unpack what value streams are.

What is a Value Stream?

Value streams describe how a stakeholder – internal or external – receives value from the organization. For example, this could be an application process, so the value stream starts with beginning the application intake and ends when a decision is made. Or it could be the purchasing process, which might begin with browsing for products and ending when the product is delivered. The goal when a user starts the process defines the end of that value stream. If anything goes wrong within that value stream, the value expected may not be delivered.

Value Stream Stages

Inside the value stream are value stream stages. Depending on the size of the value stream, it may make sense to break up development, and teams, based on stages. Stages represent iterative value that is accrued throughout the value stream. This could be the online form, account creation, shopping cart, payment processing, backend decision and approval, or order fulfillment.

Value Stream Mapping

How you organize around the work to deliver what’s needed to support the value streams is the focus of the Lean concept of value stream mapping – an internal process-based practice. Value stream mapping seeks to identify and eliminate development waste by building cross-functional teams capable of delivering end-to-end needs for delivery of a solution that supports a value stream or stage. This internal process or team is not the value stream. It’s merely the way to deliver capabilities for the value stream in the most efficient manner.

The Strategic Tie-in

Why does the organization exist? What’s its purpose? What areas of focus help the organization provide that purpose? These are the broader contexts that drive a strategic plan. They focus on the why and what success looks like when achieved.

A value stream represents one or more of the reasons the organization exists.

The organization doesn’t exist to provide online forms. It doesn’t exist to take online payments. It doesn’t exist to execute fulfillment. All these things, together, support the mission of delivering value to the end user.

Focus on the Why

If your organization provides a way for people to apply for some type of assistance, you exist to support that need. Your value stream is the flow from starting that process through delivering that assistance. Value is achieved when people are helped, or at least the request is adjudicated. Focusing on the whole value stream helps you stay focused on why you exist – the keystone of your strategy.

Fund Value Streams

Funding value streams provides more flexibility for teams to move to where the need is within the value stream. Using portfolio management, the team(s) can use data to decide where the next right thing is and shift focus to delivering value where it’s needed to keep the value stream strong.

If one of your strategic objectives is to reduce subscription cancellation rates, you’ll need to identify the value stream that’s falling short of delivering expected value, which is causing customers to drop your service. You will decide how much you’re willing to invest to reduce cancellations by a certain amount. Given that investment, you’ll fund the entire value stream and allocate funds when and where needed to address the catalysts for dissatisfaction among your subscribers.

The Next Right Thing

My mission statement is that I help organizations continuously find better ways to discover and deliver the next right thing. That one statement, I believe, defines what every organization, team, and person should want to do – regardless of what they do. The trick is, how do you do that?

I have another phrase I use that says, what you do matters; why you do it matters more. Many teams are good at delivering lots of the wrong things fast and frequently. They would call themselves “agile.” To them, value is delivering on commitments. Value is doing more in less time.

Value is only known post deployment.
Feedback and data inform what’s next.

Value is determined by the users / stakeholders of what you produce. There is an end-to-end experience for them in receiving that value. That’s where you should focus. That’s what is connected to your mission. That’s what is connected with your strategy. A value stream focus helps you ensure the work you’re doing is aligned with something that matters.

* The Balanced Scorecard by David Norton and Robert Kaplan

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