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Does Value Stream Management Really Work?
Organizational leaders often say their companies are customer-centric, but their success varies greatly. Value stream management helps.
6 Min Read
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In today’s digital world, organizations often say they’ve gone from customer-centric to customer-obsessed. They’ve embraced continuous integration and continuous delivery/deployment (CI/CD) and other practices aimed at delivering value faster to the customer. Not surprisingly, their level of success varies depending on many things, not the least of which include people, processes and technology.
One success factor is having a value stream, which, according to Gartner “is the sequence of activities necessary to deliver a product, service or experience to a customer, internal or external. Value streams cut across and connect siloed business capabilities. They provide end-to-end visibility of the activity flow, from customer request to delivery.”
While value stream management and mapping are not new, they can be more effective using modern tools that help facilitate the value stream.
“Value stream mapping takes the focus away from a singular production point, such as a conveyor belt or a project team, and requires you to look at the entire process from idea to value for the customer. Value stream management is a process where you optimize and improve that value stream,” says Ivan Gekht, CEO of custom software development firm Gehtsoft, in an email interview. [You can] offer more value in the same [amount] of time, improve the quality of each delivery or shorten the feedback cycles so you can know what your customer needs, approves [of], or disapproves [of] faster. Each improvement will lead to a better service [for] your clients and customers.”
How to Get Started
Amanda Russo, founder and CEO at process improvement consultancy Cornerstone Paradigm Consulting recommends defining objectives first because it’s important to understand the purpose and desired outcomes of value stream management.
“Next, map your current processes by engaging all stakeholders, which include not just team leads, supervisors, or management but also frontline employees, [such as] sales, customer success, call center, customer service. These employees interact with customers daily and have invaluable insights into the customer journey, challenges and expectations,” says Russo in an email interview. “Once you have fully mapped out your processes and identified operational gaps, set aside factors such as bandwidth, budget, timeline or preferences to prioritize improvements and implement changes incrementally. Taking your time at this stage can offer tangible benefits, including improved efficiency, enhanced quality, increased customer satisfaction, better collaboration and scalability.”
How to Overcome the Challenges
A common question when mapping processes and initiating organizational change is how to handle resistance, resource constraints, data accuracy and siloed departments, Russo says. These issues can be mitigated by involving everyone in the initiative from the outset and maintaining clear, frequent communication about project status and achievements. It’s important to stay organized and avoid cutting corners. The success of a project's change and its adoption hinges on how well it is initiated and managed.
“My advice is to plan your project meticulously, remain objective during documentation, ask more questions than you answer, and develop an extensive training program to mitigate job and role insecurity. Be patient and persistent, and leverage technology to complement your processes,” says Russo.
Gehtsoft’s Gekht also advocates an end-to-end approach.
“Ensure that you understand the entire process from start to finish. Understand all parts of the process -- owners, inputs, outputs, restrictions, etc.,” says Gekht. “Measure that process using metrics important for your business, [such as] evidence-based management that provides excellent guidance, for example. Next, start working with a PDCA cycle: Plan the experiment, do the experiment, check the results, adjust, and adapt.”
When done correctly, value stream management can improve the consistency of the results, the frequency of value delivery and reduce costs for customers through process optimization enabled by a decrease in silos.
“Value stream management is about improving the process to achieve better results for your customers and end-users,” Gekht says.
According to Gekht, some of the most common challenges are:
Resistance to change,
Lack of support from top management or employees at the execution level,
"Optimization," which is almost always associated with layoffs, and
Reduction of silos because it always viewed as a threat: It reduces key-man dependencies and eliminates unique knowledge holders and indispensable employees.
“Do it anyway,” says Gekht. “No matter how hard the first step is, having an entire value stream management in place will make the organization better and stronger to compete in the modern marketplace.”
Approaching Holistically Is Key
Value stream management is indeed working when it is approached holistically by integrating the framework with technology and people. By mapping and optimizing every step in the customer journey, companies can eliminate waste, create efficiency and ultimately deliver sought after value to customers. The key lies in continuous improvement and stakeholder engagement throughout the value stream, ensuring alignment and commitment to delivering responsiveness and quality to customer needs, according to Saraha Burnett, chief operations officer at full service digital experience and engineering firm TMG.
“Value stream management is indeed working when it is approached holistically by integrating the framework with technology and people. By mapping and optimizing every step in the customer journey, companies can eliminate waste, create efficiency and ultimately deliver sought after value to customers,” says Burnett in an email interview. “The key lies in continuous improvement and stakeholder engagement throughout the value stream, ensuring alignment and commitment to delivering responsiveness and quality to customer needs.”
Companies leveraging value stream management are realizing increased efficiency by reducing lead times and productivity cost reductions from eliminating waste and enhancing product quality. For customers, this translates into faster delivery and higher satisfaction because the product or service better meets their needs.
“VSM requires a sustained effort and commitment at all levels of the organization,” says Burnett. “My advice to peers embarking on VSM is to start small, learn and scale gradually. When you start with a small pilot project you can demonstrate the value and gain insights, [it] fosters a culture of continuous improvement by encouraging learning and celebrating small wins. Prioritize communication and collaboration at all levels. Invest in your technology as an enabler but remember that the true drivers of success are the people and their process.”
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