JOURNALFrom Project to Product

A three-point agenda for 2022. And beyond

Posted by Ajay Blackshah . Feb 14.22

What’s your strategic intent for the year ahead? Is it right? Will you deliver on it? Or will you be buried in too much work… again! We were recently inspired by a client who laid their plan out for 2022 and we thought it might inspire you too.

Late last year, a new client of ours sent us an email confirming its technology focus for 2022. While it wasn’t surprising to us (we helped scope their agenda), one particular paragraph stood out. We loved it for its succinctness in capturing the organisation’s plan and the reasons for it. We asked the client if we could share it. Here it is, anonymised…

“Looking ahead to 2022, XYZ is entering the next stage of its evolution into a more Value Stream-oriented product model with an emphasis on flow. As part of this, we are establishing a Digital Portfolio and we want to explore our options to understand, communicate and make decisions about the performance of our flow, its alignment and, indeed, contribution to business outcomes. ‘Seeing the system’ is one of our greatest challenges and consequently, we often lack the information to act on opportunities and risks that impact our performance.”

We couldn’t have put it better ourselves

There’s a lot to unpack there and the reason we want to do this – at least in part – is because this paragraph is super-relevant to any organisation, no matter its size or the sector in which it operates1. If you wanted an agenda for 2022 and beyond, we believe it’s right there. So let’s unpack, starting by describing the three things the paragraph is referring to.

First, effort in software delivery should be focused around ‘products’ rather than ‘IT projects’, with each product representing an end-to-end Value Stream.

Second, a Lean Portfolio of work should be established to define the products that will deliver the best value for the internal or external customers and which are clearly aligned to business strategy and desired business outcomes.

Third, a framework (including metrics) should be implemented to measure and improve the flow of customer value derived from/delivered by those products, which provides for better decision-making.

The combined effect on an organisation of implementing these components is profound. It makes the organisation’s system easier to see and understand for stakeholders across the business and it will result in better products for customers, delivered faster. Let’s dig a little deeper into each of the three elements to see how.

The shift ‘from project to product’

Traditionally, the effort of the IT function has been organised around delivering ‘projects’ based on the requirements of particular stakeholders, with each project competing against others on the backlog. (Our simple definition of a project is having a start, an end, a deliverable, and temporary teams allocated to facilitate the delivery).

If the requirements are significant – for example, building a new Identity and Access Management system (IAM) – a project business case would have to be written and the technology team would be assembled to (hopefully) focus on the delivery of the IAM project. Once delivered, the team would be disbanded and redeployed to a new project.

Shifting to product means that, in our example, IAM becomes a product that’s owned for the long term – from inception to decommissioning – by a team from across the business. In this world, if an executive asks “Who owns IAM?”, there will be a definitive answer. But in the project world…? After all, Identity and Access Management will never ‘go away’; it will be part of the corporate ecosystem for the foreseeable future.

It’s easy to see the benefits here – owning a ‘product’ promotes team engagement and pride, a constant focus on meeting customer needs and, therefore, better business outcomes. There’s a caveat to all this and it’s about ensuring the team isn’t blocked from doing its job of delivering and continuously improving the product. The business expectation is also clear. Products are not a ‘one and done’; they need to be ‘watered and fed’ as long as they are part of the business ecosystem. That’s where ‘flow’ comes in, more of which later.

One question that’s always asked in the shift to products “How do I define the Value Streams and who are the stakeholders?”. There are a number of ways to do this but they are beyond the scope of this article (join the VSM Meetup group below to learn more!). What’s crucial though, is that the business needs to establish a clear, organisation-wide product architecture aligned to business strategy and customers. With that, it’s easier to work out both the end-to-end Value Streams and the people in them. It’s also a starting point for establishing your Lean Portfolio…

Lean Portfolio

There’s too much work going on in most organisations and, in a ‘black box’ project world, it’s often difficult to identify the real value of work to the business. Shifting to product should be supported by implementing Lean Portfolio Management (LPM). The implementation of lean principles in the LPM is vital to help organisations focus on value delivery, implement flow at the portfolio level (which then naturally cascades down to teams) and most importantly allows optimisation of the portfolio investment. A vital role of the LPM is to say what is ‘not going to be done’. Too often we see excessive WIP at the portfolio level which impacts the value delivery and efficiency through the technology delivery. A clear understanding of the business strategy, Value Streams and visibility of the portfolio – including bottlenecks and impediments – is vital to a great LPM.

LPM is an essential and relatively new practice in New Zealand but its value is becoming more obvious as organisations begin to shift to organise by product Value Streams. These practices are made for each other and, along with better ways of working such as Agile Product Delivery and DevOps, they certainly put organisations on the road to ‘mastering software delivery’. But that destination will be elusive without another significant change – a new focus on Flow.

Focusing on Flow

Traditionally, organisations have been focused on economies of scale. Today, competitiveness depends on the ability to continuously deliver value to customers – and the focus therefore turns to economy of flow.

To make this shift, organisations need to adopt a framework, metrics and tools to make those metrics visible to stakeholders. The most widely-adopted framework2 – developed by Dr Mik Kersten – is the Flow Framework®. We’re big fans of course, not just because it provides for all of those things, but because it aligns technology with the business and provides visibility to leadership that’s actionable for teams in the Product Value Streams. It’s not just something that ‘IT’ uses.

The Flow Framework® specifies five Flow Metrics that cover the delivery of value by software: velocity, efficiency, time, load, and distribution. Stakeholders across the Product Value Streams (PVS) can collect data and begin to see how well work is flowing. The use of quantitative data will point the teams to where there are potential issues, allow them to understand where flow is being impeded and what improvements might be considered. Data will demonstrate how effective the changes were and allow a fast learning and improvement cycle to be implemented.

The language of the Framework is clear to everyone, even non-technical people. Dashboards, such as those provided by Tasktop, harness data-driven insights to identify and resolve bottlenecks, dependencies and quality issues. It also measures and proves the return on investment in improvement efforts, allowing organisations to make smarter, faster decisions on where to invest next. But above all, it gets organisations focused on the flow of value.

Sum of the parts: Value Stream Management

The three components we’ve briefly described don’t exist in isolation. Their combined implementation takes an organisation into the practice of Value Stream Management (VSM), working together to reveal the system, deliver economy of flow, delight customers and improve ROI. It’s the way to master software delivery and, we believe, will become the default software delivery management practice in the coming decade. Our client is about to begin its journey and you can too.

Naturally, we’d be happy to help you explore VSM further. Read our ‘Project to Product’ page or drop us a line. Alternatively, we’ve set up the Value Stream Management Meetup group to build and support the VSM community, share knowledge and experiences, and develop the practice for the benefit of everyone. Our first Meetup is scheduled for Thursday 24 February – it will be a virtual Meetup on Zoom – so there’s no limit on numbers and anyone anywhere can join in. Join the group and sign up for the event. We’d love to see you.

1 Don’t take our word for it! Here’s an epic LinkedIn post from Cristian Eggers, Executive General Manager at Commonwealth Bank Australia, that perfectly lays out four of the biggest business challenges and how VSM can help address them

2 Over half of the US Fortune 100 companies are already practising VSM using the Flow Framework®. NZ Inc needs to catch up!

More on the Flow Framework® and the Tasktop VSM platform can be found on Tasktop’s website. There’s a heap of fantastic webinars, transformation case studies and industry research reports that shine a light on the practice of VSM.

Ajay Blackshah

HYPR's Chief Practices Officer and SAFe® 5.1 Program Consultant. Ajay's focus is on delivery and building our Scaling Lean-Agile practice. Believes wholeheartedly that companies and teams should be customer-obsessed.

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