I was recently asked how I would maximise value generation in a multi-team digital development environment. When responding to the question, I drew upon my professional training and experiences to draw up a sketch of the context and meaning of (a) what is ‘value’ (b) what some of the key principles and enablers of value creation or value loss are; so that (c) those responsible for value generation remain aware of and can measure the outcomes and benefits. My intention is to articulate the same here and seek your opinions and draw upon your experiences of how you may relate to it.
Before we go into the specifics, I would like to start by stating that the principles that I attest to are: responsibility, empowerment, transparency, and accountability. For with responsibility comes accountability, but for responsibility to be credible requires (feelings of) empowerment — without which the stage isn’t really set up for success. Responsibility, as well articulated in the accompanying short video, promotes empathy, and a drive to appreciate the bigger picture so that one feels and is empowered to make effective and timely decisions to do a brilliant job than seeing it as a series of tasks.
“The price of greatness is responsibility.” ~ Winston Churchill.
Next, let us consider for a moment what ‘Value’ is and some example of value creation and value destruction. ‘Value’ can be subjective — as Marty Roberts sang “One Man’s Trash Is Another Man’s Treasure”. For ‘Value’ to be objective therefore, the context is important. Let’s consider an enterprise that sees a very attractive opportunity with a government regulator dangling the carrot to upgrade the national infrastructure and technology to improve inclusivity, accessibility, and choice for the population. If so, how does the firm align its corporate strategy (the why, the what and the how) to march ahead in support of the business case, stay ahead of the competition, design factors to differentiate its product proposition to appeal to the most appropriate market segments. All of these thoughts would crystalise into a chain of activities to generate a set of coherent capabilities that could be leveraged to drive suitable outcomes in support of the business case. In management parlance, the chain of sustainable activities is variously called Value Chain or Value Streams and quite simply are a series of logical steps to achieve an objective. In the example, we are discussing the value chains for the relevant journeys of acquiring new customers and upselling to existing customers could look as shown below.
a. Acquire New Customers:
Advertise Products > Generate Leads > Engage With Prospects > Acquire New Customers > Positive Early Onboarding UX (setup, interaction)> Provide Ongoing Simple UX (eg accessibility, billing) > Provide Upgrade / Downgrade Options > Drive Loyalty
b. Leverage Existing Customer:
Generate Awareness > Provide Upsell Options (eg Promotions) > Provide Improved UX (e.g. accessibility, home move, price transparency) > Drive Ongoing Loyalty
Our objective should be to align our ducks to drive responsibility and empowerment so that while working within the constraints of budget, and schedule; the essential capabilities could be scoped in and to generate the desired outcomes and benefits. In more traditional ‘ways of working’, this is done through a series of projects whose focus is to generate a series of outputs (eg a new channel or an improved billing system) in the expectation that they would be coherent. Unfortunately, the ‘project specific’ thinking results in a temporary organisation for a specific set of changes — inadvertently, leading to siloed and disconnected ways of working across an enterprise. Significant management effort is necessary to broker relationships between teams resulting in inefficiencies and creating distance between the business objectives and those who are meant to be responsible for enabling the business. Given that projects are essentially temporary, there aren’t always opportunities to build long term working relationships amongst team members and the behaviour, in general, is reactive rather than participatory and proactive.
In contrast, a ‘product based’ thinking/ approach funds a set of teams on an ongoing basis to incrementally build and improve capabilities to support the business objectives — encouraging direct, improved collaboration and continuity between business and technology teams as well as joint ownership, responsibility and empowerment to determine and negotiate sensible changes to support the value streams. In our fictitious example, assume that the customer preferences are unlikely to be as yet well understood for the new proposition, and so rapid feedback is necessary for success. With possibilities of substitutes becoming viable in the medium term, creativity is necessary to generate effective value propositions. In the context of the developing circumstances, it is, therefore, more valuable to ‘fail faster’ and recover from it. Under such a circumstance, a ‘product based’ approach is more valuable than a mere ‘project-based’ approach.
Do refer to this well-written article in martinfowler.com too on the key differences between project and product based approaches.
Referring back to the value streams for our sample example attempting to leverage the industry drivers, an effective approach would be to organise itself vertically into a set of relevant “tribes” or “journeys” aligned to the value generating streams — assume two, one with the mandate to acquire new customers and another to upsell to the existing customers — as the firm builds and rolls out its new offerings. The tribes could organise themselves as squads reflecting the agreed value streams within the journey definition and work closely with empowered product owners from the business to generate products that can dovetail with capabilities; either existing or new, to allow benefits to be generated and measured in much shorter cycles. As the squads are aligned to the steps in the value streams and are cross-functional, with deep domain and technical expertise, they are able to adapt to changes in relevant drivers (for example market or regulatory) to correct course and continue generating the most optimal outputs. The “tribes” are masters of their own destiny and demonstrate tribal behaviours— controlling their own budget and self-organising themselves instead of being dependent on external factors like their share of the sum of “estimated” budget amounts of a number of projects, that by their own nature are temporary and may lose strategic relevance for the organisation*. If an organisation still likes to drive change through projects, the projects can pitch the changes to the tribe or journey leads; with the decisions being the outcome of a negotiation between the portfolio/ programme function and the tribe journey leads.
As final thoughts, I would also like to share the following insights from Mckinsey & Company about essential changes to operating models to achieve true agility to drive value maximisation.
Use case reference: ING’s Agile Transformation