Why do we need a compass in real life? To make sure we don’t waste time, energy and resources going in the wrong direction, or worse, getting lost and never reaching our destination.
What does transitioning from project to product really mean? It’s about IT organizations moving from a temporary view of managing initiatives to a persistent view of improving products that are the lifeblood of the business. While it’s a crucial shift in approaching IT and enterprise software delivery to accelerate market response and adaptability, it’s also a journey. And like any journey, it requires a compass to guide decision-making where it matters most to your customers. With the right set of business-centric metrics that focus on the flow of work across the product value stream, IT and business leaders can leverage objective real-time data to identify the bottlenecks slowing them down, inform investment strategy, and measure the impact of changes to steer them in the right direction.
Measuring Business Outcomes Over Activities
When it comes to software delivery, there are many activities and siloed metrics. While these metrics are key in measuring flow in a specific area of the value stream (such as measuring lead time between code commit and deploy), they do not reflect the reality of how long it really takes to deliver business value from ideation to operation. You can be deploying hundreds of times a day, but if it’s not correlated with a business outcome (such as time-to-market, revenue, customer retention), then how do you know if you’re meeting business needs faster?
Before starting the journey, you need a set of consistent outcome-based metrics for your current and future state. You need to measure your baseline and establish targets for improvement to gauge progress objectively. And once you’ve identified where your bottleneck is, you can dig in and probe issues with your area-specific metrics to unlock flow.
Measuring the Flow of Value with The Flow Framework®
In Project to Product, Dr. Mik Kersten presents the measurement paradigm the Flow Framework® to help large-scale organizations to adopt value stream management (VSM), a systematic approach to measuring and improving flow that helps organizations shorten time-to-market, increase throughput, improve product quality and optimize for business outcomes.
Through value stream metrics, known as Flow Metrics, you can measure the rate of business value delivery for software products through the lens of your customers (whether internal or external), correlating software delivery work with desired business results such as revenue, cost, quality and employee happiness.
These metrics are unique in the sense that they abstract away from details like team structure, technical architecture and tool implementations to measure the flow of software delivery work that creates and protects business value across the entire value stream. Crucially, the data comes from the tools that your product teams are already working in, leveraging their data (information about epics, features, bugs, security risks, defects, issues) to understand the reality of how work is progressing from customer request to delivery.
Measuring Anywhere, Anytime
In the post-COVID world, it is more necessary than ever for IT leaders to have one source of truth into the health of their software portfolio. One key lesson learned from remote working is that it is vital to have access to accurate and up-to-date information. That requires end-to-end visibility and traceability between tools as work traverses between teams across the value stream. Not only does this help with governing releases, it enables you to get to the ground truth of what is really going on.
To paraphrase W. Edwards Deming, to improve the system you need to get outside the system. By abstracting Flow Metrics from the entire value stream, you gain remote visibility into performance, regardless of your tool or methodology or location. No matter how many (or how few) tools are used to move feature work from ideation to release, or production defects from their detection through analysis and remediation, this information can be captured and measured from the toolchain. This includes work that generates business value (features and debt – which improves how work can be done) and work that protects business value in terms of risks and defects.
Baseline Your Current State
The problem facing many organizations today is to determine where they need to invest to improve the system in terms of IT flow and the associated business results. Before taking a step in any direction, you need to know where you are by baselining flow in terms of time and velocity. Then you need to identify what’s impeding the flow. The ability to measure work to understand where it encounters wait states (e.g. waiting for a UX analysis, code review, a change approval, a testing environment, performance testing to complete) is necessary to know where investments can be made. This real-time visibility provides the ability to measure the impacts of these changes to apply systems thinking to scale positive outcomes across the organization.
Where to Invest Today?
As someone who has coached dozens of Fortune 100/500 companies, I’ve had the opportunity to see this thinking applied first-hand. Many organizations have been able to finally see that the dozen or so teams working on a product (or another initiative) have months of work “piled up” waiting to be pulled into a development cycle (be it an iteration, PI, etc.).
This same value stream may have a huge bottleneck in a QA validation state that needs more investment for mitigation. There may also be local OKRs and siloed views that are driving them to queue up more work in the intake process, while not having the visibility to understand that this local optimization is producing waste because the rest of the value stream can’t consume this work.
Even when the team themselves intuitively understand where the issues are, there is no objective data to make the case for improvement. Flow Metrics can validate hypotheses into bottlenecks and provide the basis for experimentation.
All journeys require a compass to know when progress is being made towards a goal. Why do we need a compass in real life? To make sure we don’t waste time, energy and resources going in the wrong direction, or worse, getting lost and never reaching our destination. In the post-COVID era, resources are scarce and can’t afford to be wasted.
Each company’s journey will likely be different based on their business model and culture. Agnostic approaches like the Flow Framework provide navigation across all variations of tool and methodology terrains that exist throughout the industry, enabling you to see if you’re making progress or veering off down the wrong path before it’s too late.
Register for a Value Stream Management Workshop
We run highly-interactive VSM workshops to kickstart your VSM journey:
- Identify and measure value and protection in software products
- Analyze a baseline of software delivery performance using Flow Metrics
- Pinpoint bottlenecks, reduce waste and improve velocity
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