Value Stream Management: An Introduction

Businesses across industries are facing a new fundamental problem: connecting the work they have committed to deliver with the right goal in the form of a resultant key performance indicator. It goes both ways, too, as there are a near infinite combination of data points to measure and many possible ways to achieve the goal. 

As a result, some businesses are left asking, “We know the KPI we’re trying to achieve, but what initiatives will be most effective in achieving it?” Others, however, have the opposite, but equally frustrating question of: “We know what we need to do, but are we measuring the right outcome metric?” 

An organization that links work output to any kind of numeric outcome such as an OKR (objectives and key results), BSC (balanced scorecard), or OGSM (objective, goals, strategies, and measures) can run into these questions, and they’re only further complicated by the many definitions of work in use at any given time across numerous business units and teams. Achieving a timely, accurate performance report of an enterprise’s strategic delivery—linked to the right outcome, and delivered to the right people—can be challenging.

Value Stream Management (VSM) aims to make these connections easier. This business discipline and practice requires leaders to take a systemic look at the entire lifecycle of development and delivery, offering an in-depth look at each step of the process and consequently easily identifying areas for improvement. By doing so, a business can optimize value across a process – without sacrificing agility at any point. While this approach originated in software development, its breakdown of a process from start to finish through the lens of optimizing value specifically can apply across a multitude of industries.

For example, one could take “strategic performance” as the process to be evaluated by VSM principles. In this case, there would not necessarily be a customer aside from the business itself and a specific goal in mind. However, the benefits remain the same. 

Here are some sample questions to sketch out a VSM chart for your company’s strategic performance: 

• Where do new strategic ideas come from in your business? 
• Do your employees at all levels of the organization have a way to share their ideas without fear of repercussion? 
• How are those ideas evaluated compared to current initiatives and practices? 
• How is work assigned to implement these new initiatives? How are teams constructed? 
• What collaborative methods are in place to ensure different teams are aligned on the initiatives? 
• How are issues, updates, and questions communicated? 
• Where can initiative development be made more efficient? 
• What will the end result look like for your company? Is it more market share? 
• What are potential challenges ahead for the company or the industry? How will those be addressed? 
• How are these initiatives reported on? Who are the key stakeholders? 

One of the benefits of asking these questions and sketching out a VSM flowchart is the ability to work both forwards and backwards. For example, you can start with a key goal and measurable, then use questions like those above to work back to discern the best possible process to get to that goal. In the same way, starting with a goal, you can then work forward through the process to understand what metrics are most essential to measure the success or failure of your strategic initiative. Either way, VSM encourages and attempts to enable the optimum level of value across a process while maintaining agility from output to outcome.

StrategyBlocks is built on the same fundamental principles as VSM – offering a highly-customizable way to map a strategic initiative from conception through to results monitoring across different teams, divisions, and the organization as a whole. It was designed to be an agile platform that readily models output then links that output to the outcome in such a way that encourages clarity, communication and, most importantly, team collaboration.  With StrategyBlocks you can easily link structured outcomes to the work being done — while also effectively assessing the risks and challenges involved. 

For more information on how StrategyBlocks can help your organization take the next strategic step in this dynamic business environment, get in touch with us today.