Interest in Value Stream Management (VSM) has never been higher – and for good reason. VSM is very much driven by digital transformation. Whether it’s a very strategic, top-down transformation initiative, a bottom-up effort to scale a successful pilot, or something in between – every organization is recognizing the need to change the way they operate in order to create and deliver customer value more effectively.
Recently I had the opportunity to speak at the Six Five Summit regarding Value Stream management and how it can help companies accelerate their transformational journey.
During the chaos of the past few years, most organizations made great progress in adopting the cloud and other technologies that enable them to develop software faster. But that’s only half the battle. Successful digital transformation requires that all teams within an organization operate autonomously enough to respond dynamically to constant change, while still being aligned across broader enterprise goals and value streams.
Culture built on trust
Traditionally, most large companies are organized around functional silos. The best way to visualize a value stream is as a cross-section of multiple functional silos, comprised of the individuals in each who are participating in the creation and delivery of a specific stream of value. VSM is a set of processes and techniques for orchestrating the work of these different stakeholders, organized into value stream teams based on their contribution to creating and delivering customer value, rather than their functional roles.
VSM promotes autonomy and accountability across these teams, so they can pivot rapidly when necessary to optimize value creation and delivery, which dramatically increases the overall effectiveness of the entire organization.
Embracing value streams as a key organizational construct requires a fundamental shift in culture – from being rigid, process-centric, and hierarchical, to becoming focused on functional metrics that serve to realign the entire organization around the notion of value.
Building trust across the different functional teams is imperative to making this cultural shift happen, so you have to change how people are measured. Instead of measuring IT value with KPIs, such as uptime or mean-time-to-repair, with VSM you measure business value – things like the speed at which new products are launched, increases in profitability, or the improvement of customer experience. Objectives and Key Results (OKRs) are an extremely effective tool for successfully driving this cultural transformation.
Building trust also requires alignment, as well as a common view and consistent understanding of critical information across all stakeholders, whether it’s an executive, a developer, an IT operations person, or a business analyst.
The Broadcom difference
One of the best quotes that I’ve heard from one of our customers was from a CTO who said, “Your platform enables us to gain speed in the corners.” What he meant was that when organizations change plans, or pivot in a different direction, they typically slow down. But with our VSM solutions, the CTO had access to the right data and was able to realign the organization quickly enough to actually accelerate value creation while changing direction.
Customers ask, “How can Broadcom help?” Of course, it really depends on where they are on their journey. Generally, the first step is a workshop in which we begin to understand how the flow of value is being generated and start understanding the funding model, and whether the organization has started to transition from managing projects to managing products or digital services, and if they’ve started to pivot toward a common language across stakeholders. Frequently, the first step might be taking the data that exists at the delivery level, at the operational value stream, and actually bottling that to provide business stakeholders with real-time visibility into what is happening on the delivery side. That’s when we typically start to discuss what really constitutes a value stream, and ways their funding model might change to become more durable, and fund teams instead of projects.
Ultimately, when we talk to our customers, it’s less about tools and more about the cultural transformation that must occur across the organization. If we can create a platform to promote cultural change, break down fiefdoms that aren’t benefiting the business, and build a common understanding of where value is created, then we can significantly accelerate an organization’s transformational journey.
To learn more, visit Broadcom here.
About Serge Lucio
Serge Lucio is Vice President and General Manager of the Agile Operations Division at Broadcom. He is responsible for the company’s software solutions that help organizations to accelerate digital transformation and drive organizational agility.