July 31, 2024
Author: Heather Spring
Value Stream Management (VSM) is a business practice that uses technology to focus on increasing the flow of customer value from the initial objective to final delivery. The goal of VSM is to unite companies and their customers by visualizing and managing value throughout the product or project lifecycle.
The third annual Global Survey of Executives and IT Leaders, sponsored by Broadcom and conducted by Dimensional Research, found that 96% of companies have started a VSM initiative. These initiatives can deliver value in the form of transparency, alignment, and accelerated velocity.
VSM is not a new term for an old practice. Instead, VSM involves different processes, different modes of collaboration, and in some cases different ways of evaluating success. To be successful with VSM and realize its benefits, organizations must have the right tools and teams in place.
Why VSM?
VSM has emerged as an essential solution for helping organizations collaborate more effectively and execute more efficiently. VSM is a key to overcoming stubborn barriers that can plague the digital transformation process, allowing even the most complex organizations to:
- Pinpoint Misalignment
- Eliminate Waste
- Improve Operational Visibility
To get VSM right, organizations must follow 5 steps.
5 Steps to VSM Success
Let’s take a quick look at the key steps in adopting VSM and the common pitfalls you can avoid by taking these steps.
1) Identify: Start with outcomes and focus on customer value
True VSM starts with understanding how your organization creates value — from initial concepts to revenue — and then organizing around the people and teams that deliver value instead of putting together a collection of projects.
Common Pitfall: Lack of Focus
Many organizations have multiple active change programs running simultaneously, and it’s common to get pushback if they see VSM as just another new initiative to take on.
According to the VSM Consortium, failure to allocate sufficient resources, such as skills, budgets, and time, is the biggest barrier to successful VSM adoption.
“VSM requires clear leadership and buy-in from everyone in the idea-to-implementation pipeline.”
Key to Success: Frame VSM as an Enabler
VSM needs to be viewed as enabling other initiatives, such as DevOps, Lean, and Agile, instead of conflicting with them. VSM is an approach that fuels better alignment around strategic endeavors and leads to better business outcomes.
2) Align: Get strategy and delivery on the same page
Tie business strategy and delivery together in singular value streams so that when challenges arise or tradeoffs need to be made, everyone is on the same page about the value they want to deliver and the progress towards it.
Common Pitfall: Not Being Inclusive
VSM can be led by different teams, but it needs engagement across the organization to succeed. If you don’t include key players upfront, you’ll be frustrated by bottlenecks later.
“It’s easy to underestimate the number of stakeholders and contributors in a value stream.”
Key to Success: Map Your Value Streams Accurately
Think about the value stream from concept to cash. Who are the stakeholders at every step of the process? Value streams don’t just involve planning and engineering. They also involve finance, legal, operations, and other teams that all need to be aligned.
3) Rally: Ramp up development teams
VSM provides the platform and data you need to translate business strategies into work for delivery teams to execute while simultaneously eliminating friction. Using strategic roadmaps and epics to articulate business ideas, you can negotiate with development about what should be done and when, without getting into the weeds.
Common Pitfall: Micromanaging
Trying to dictate how work should get done creates friction. Teams need clear goals, but they need the autonomy to decide how to achieve them and what tools to use.
Dimensional Research Global Survey of Executives and IT Leaders, sponsored by Broadcom, reported that 83% of companies correlate organizational silos with reduced customer value and product ROI.
“If delivery teams aren’t empowered, you will be stuck in the same bottlenecks and battles.”
Key to Success: Unified Data
Consolidate data and make it accessible, usable, and connected to common goals. This is how hundreds or even thousands of complex teams all know exactly how their work delivers value, no matter what tools they work in
4) Execute: Orchestrate the plan while managing risk and change
Determine the optimal way to get work done and provide visibility to improve collaboration and increase trust. Monitor work and steer execution to ensure prioritization, urgency, and allocations remain valid in the face of constantly changing demands.
Common Pitfall: Competing Priorities
True VSM means continually prioritizing based on value, and that often means renegotiating resource allocation, not just plowing ahead because you’re averse to change or only listening to the loudest voice in the room.
“It’s easy to fall back on old habits and patterns, but VSM is fundamentally about managing change.”
Key to Success: Listen to the Data
When all efforts are aligned to business goals, it’s easier to see where the value is and prioritize accordingly, even if that means pivoting resources. The purpose of VSM is not to stick to the plan at all costs; it’s to make the right changes quickly and with minimal risk.
5) Evolve: Validate results and iterate with a shared understanding
Measure success and optimize the value stream to improve future work
Common Pitfalls: Not Celebrating Success
At its core, VSM is about managing change with minimal risk and staying on strategy, and it’s essential that teams see how their efforts create value, not just how efficiently they did the work. Teams must be empowered to bring challenges and opportunities to business stakeholders.
“Don’t forget to measure, but measure value created, not just throughput.”
Forbes reported that companies cite shorter feedback loops and closer alignment with customers as key benefits of VSM.
Key to Success: Shared Learning
Business leaders need to help build a reputation for the value stream. By communicating successes and learnings, you drive continuous improvement, but you also demonstrate the potential of the value stream to other parts of the enterprise.
Value Stream Management: The Key to Digital Transformation
In the Dimensional Research Value Stream Management Trends 2023 survey, sponsored by Broadcom, 92% of surveyed business leaders believed value stream management would optimize their product lifecycle process, and nearly every leader believed a quality VSM technology solution would accelerate the adoption of VSM at their company.1
Value Stream Management helps business and development leaders work collaboratively to create a common understanding of both what effective strategy looks like and how best to execute it. VSM is both a strategy and a practice and must be supported by the right tools and technologies.
Only true enterprise VSM solutions, such as Broadcom’s ValueOps VSM, provide the scale and customization required by the world’s most complex organizations, enabling them to fund, schedule, track, and manage work throughout its lifecycle, as well as to maximize the value they deliver to customers.
1 Dimensional Research | 2023 Value Stream Management Trends: A Global Survey of Executives and IT Leaders
About Broadcom
Broadcom Inc. (NASDAQ: AVGO) is a global technology leader that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. Broadcom’s category-leading product portfolio serves critical markets, including data center, networking, enterprise software, broadband, wireless, storage, and industrial. Our solutions include data center networking and storage, enterprise, mainframe, and cybersecurity software focused on automation, monitoring and security, smartphone components, telecoms, and factory automation. For more information, go to www.broadcom.com
Take the next step in your VSM journey. Talk to a Broadcom VSM expert.