Scaling Organisations (2) — Read Your Flow

In this series, we are discussing topics that touch upon the reality faced by orgnisations at the brink of scaling beyond their 100–150 strong workforce. In the previous article we looked at how scaling manifests itself in biological organisms in order to map analogous arguments against the rush towards scaling in organisations. Successful organisations, however, will unavoidably change and to some extent “grow”. So how can an organisation respond to increasing demands without immediately resorting to increasing its workforce? The first step is to diagnose the state of the organisation in order to explore other solutions before taking the scaling path.

The first principle of the Agile Manifesto states that an Agile organisation’s “highest priority is to satisfy the customer through early and continuous delivery of valuable software”. With Agile being acknowledged and adapted as a valid mindset to all kinds of setups, not only software houses, this can be easily extended to satisfying “the customer through early and continuous delivery of any artifact deemed valuable by the same customer”.

Truth is, there is nothing exclusively or innovatively Agile about this principle.

The existence of any organisation, Agile or not, is that of delivering value to a customer of some sort. Think about businesses, start-ups and giant conglomerates, schools, churches, foundations and not-for-profit non-governmental organisations: all organisations satisfy a need for someone, and that someone is, therefore, the ultimate purpose for the organisation to exist.

That is fundamental for any human activity that can be called “an organisation”.

Yet is this always the first thought when people are asked about their work? Even if so, why do bureaucracy and politics often overshadow the importance of the customer in organisations?

Organisations tend to forget about the most important character in their story — the customer — and, instead, focus their energies and resources on beating, while feeding, their monster of internal processes. This monster typically gets greedy, very greedy, and demands more and more energies and attention, finally devouring the customer out of the story line. The result is an alienated workforce, detached from its purpose, and destined at creating more waste than tangible value.

Bringing in more people to improve efficiency increases the complexity of the network of interactions and, therefore, risks at feeding this beast fatter and fatter. We want to go the other way.

Luckily we have ways to dissect the ferocious beast and bring the customer back to the spotlight where they belong. All methods follow the same set of principles:

1. Understand the current state
2. Follow evolutionary improvement
3. Promote leadership at all levels of the organisation

If these principles sound familiar it is because they are the principles upon which Kanban is based, and it is from Kanban that practices like Workflow Mapping or Value Stream Mapping have stemmed out. In this article we will go through each of the principles and understand how these can help maximise an organisation’s delivery of value to its customers.

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Understanding the Current State

Consider a situation where a patient goes to a doctor’s clinic and before they even sit down and start talking the doctor starts prescribing medication and therapy. What would you do if you were the patient?

Now consider a company that is struggling to keep up with its clients’ requests. The administration might start by proposing overtime packages, then proceeds by launching a recruitment campaign, then augments its workforce with third-party contractors, then proposes quota-bound or performance bonuses, and despite all of these efforts the company remains in a position where it is struggling to keep up with its clients’ requests.

Putting the analogies next to each other makes the problem with this approach more visible. Improvements must always be grounded to solid observation. While seasoned administrators might have been exposed to common antipatterns between organisations, giving their intuition plausible weighting, every organisation has its own different, unique story which deserves to be read with non-biased eyes.

The first principle of Kanban, therefore, is to diagnose the current state of the system before attempting any modifications. Value Stream Mapping typically works in this fashion.

Value Stream Mapping was a method developed primarily to identify improvements in production lines. The mapping is based on the premise that a factory, and similarly any other organisation, exists to serve its customers through a value offering. In order to make an organisation more competitive the focus should be set on helping the organisation’s ability to serve its customers in a smooth, predictable way.

The flow is the goal, and the good thing is that flow can be described as a series of sequential steps. In its essence, the exercise goes on an exploratory journey of all the activities involved from a customer’s request (the trigger) until they receive the product (the outcome). Every activity is identified as consisting of a function (say Commercials, Legal or Engineering) and the action being executed by that function (like Signing of Contract or Technical Specification).

Mapping starts before putting pen on paper to draw the connected activities. Sticking to the mantra of this first principle, Understanding the Current State, those facilitating the exercise do some preliminary work in order to achieve alignment of those participating.

Together, they kick-off what is called the Value Stream Mapping Charter, where participants are asked questions like:

• How does a process get initiated?
• What are the first and last steps?
• What are the boundaries of this exercise?
• Who are the accountable parties?
• What are the logistics involved in doing this exercise?

Once the charter is endorsed by those participating, mapping can start with the partcipants walking along the production line, a phase in the exercise that is usually called the First Walk. The outcome of this First Walk is a diagram of phases connected with each other in a flow-like manner, and the action point would be that of having the participants track data concerning every phase. Data can be various, but usually contains the following:

1. Process Time
2. Cycle Time
3. Percentage Complete and Accurate (%C&A)

There are other points of data, of course, that can be looked at and which can reveal a lot about the organisation’s state. A comprehensive list can be found in the Evidence Based Management metrics, specifically those in the Current State and Time to Market key value areas.

A Value Stream Map is built using a number of different components, mainly:

• Activities and Functions
• Data Sources
• Decision Makers
• Triggers
• Artifacts

These components will then play a role in the discussions happening in the second and subsequent walks.

Workflow Mapping is similar to Value Stream Mapping in a microcosmic sense, whereby instead of looking at the whole organisational flow, Workflow Mapping looks at how value flows between the desks and chairs of a team’s operations.

Why should a team bother mapping their flow? Isn’t To Do, In Progress, In Review, and Done enough to describe our work? Is this micromanagement?

To start with, micromanagement is a mindset while Workflow Mapping is a method which, like any other method, can be used or abused. There is nothing wrong with a workflow that has only the traditional To Do, In Progress, In Review and Done steps unless the team feels that something, somewhere, is jeopardizing the team’s performance. In that case, the workflow is failing to give the necessary visibility for the team to inspect and adapt, and so it needs to be broken down. When running a Workflow Mapping exercse, I tend to touch the following topics:

• What does In Progress mean?
• Are there any other teams that this team depends on any time in the day-to-day?
• What are the different team members doing when reviewing?
• What are the quality measures?
• Is there any invisible work that individual team members do that requires acknowledgement from the whole team? This could be sync-up meetings with other teams, running after stakeholders for feedback, (for software houses) checking the build and integration status first thing in the morning, and so on.

This will provide a) an alignment between all team members b) a clear map from which the team can then start extracting data for improvements.

Both Value Stream Mapping and Workflow Mapping exercises will be mostly useful once they are used to extract Cycle Time and Process Time data. At that point, improvements will have grounds for discussion.

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Follow Evolutionary Improvement

Understanding the current state will produce two distinct benefits:

1. A map of all steps involved in the value stream or workflow
2. Basis upon which data can be extracted for further investigation

Taking the exercise one next step, the following can be done on the above benefits:

1. Identify which of the steps are value adding and non-value adding
2. Identify how the data is distributed along the flow

Value Adding Steps are those steps in which the organisation’s members affect changes to the product to increase its value for the customer. In a Value Stream Map these steps are Negotiation of Contract, while in a Workflow Map this can be Development or Reviewing of Code.

Non-Value Adding Steps are those steps in which time is spent without the product gaining any value. Perfect examples are those steps in which work needs a go-ahead by a gatekeeper, a sign-off of some sort, or where work is waiting for someone to take it up and apply the next value-adding steps. In the case of Workflow Mapping we can think about the period when work is in Waiting for Code Review, while in the Value Stream Mapping we can talk about Weekly Reviewing of Contract (what are the effects of batching?). In both cases, whether in a Value Stream or a Workflow Map, the work is stuck and the customer is waiting.

According to Leopold, non-value adding steps can sometimes take up to 90% of the whole lead-time. From personal observation, I tend to agree to figures close to this claim, and so that is where the real gains will be found. Looking at the data collected, the distrbution between value adding and non-value adding cycle time will be made very visible.

The ideal future state will not be achieved in one or two sittings: change takes time, so it is good to focus on what can be achieved within reasonable efforts and timeframes. Look at the phases that are taking longer and ask why is this so? Are these value or non-value adding phases? In the case of value adding, you might have identified a constraint in the system, in which case an exercise in re-engineering the flow can take place in order to make sure that the constraints are both maximised in their capacity and later elevated. The opportunities for discussions from this point onwards are endless and real game changing for a team or organisation.

There is one particular danger, however, specifically when running Workflow Mapping: the danger of local optimisation. While the scope of a Workflow Mapping is the flow of the team, the focus should remain fixed on the customer: having a start-team that does not positively impact the customer is close to useless.

A typical example is when a team’s dependencies on other teams are exposed. The wrong way of going about breaking these dependencies is by changing and twisting the external teams’ work in order for the protagonist team to be served better. Why is this wrong?

• How will this change positively impact the customer? Impacting flows of other teams will automatically trigger an organisational change, which will impact the customer. Such changes need to done with the bigger picture in mind, and so wider discussions are encouraged at this stage.
• How will this change impact the flow of external teams? The first principle of understanding the current state remains valid in all contexts. For all intents and purposes, the external teams might be an organisation-wide constraint which deserve to be studied, and in which case the protagonist team should subdue their flow to them instead and not vice-versa.

An organisation is a living thing and changes will trigger more changes which will trigger even more changes. Studying the flow is a constant exercise in a healthy company so that it remains valid and nimble in constantly changing markets.

Promote Leadership at all Levels of the Organisation

I find it so interesting that, amidst a context of high optimisation, data analysis and scientific approaches, Kanban’s last principle is promotion of leadership at all levels of the organisation. This principle talks about “promotion”: “moving forward”, passing on the spirit, and not coersion which is (unfortunately) more typical in high-demand, high-performance setups. Moreover it talks about “all levels of the organisation”, and so it is not just the elite few who carry fancy manegerial or executive titles who are the destined heroes, but everyone has a role to play in the success of the organisation.

Such a statement is huge.

This is an important topic which deserves an article of its own, which will be the next article in this series.

Conclusion

In this article we brought over the principles of Kanban to drive us towards an organisation’s plan for healthy growth. We looked at the first two principles in particular: 1) Understanding the current state, and 2) Follow evolutionary improvement, and we saw how these manifest themselves in mapping exercises like Value Stream Mapping and Workflow Mapping. These mapping exercises share some practices in their essence, primarily that of drawing the journey of value as it flows through the organisation followed by an analysis of the data collected from the mapping.

The third principle, that of Promoting leadership across the whole organisation will be looked at in a separate article for its due importance.

When preparing to put this article together I touched upon a number of reading sources. For Value Stream Mapping, I highly recommend the book “Value Stream Mapping: How to Visualise Work and Align Leadership for Organizational Transformation” by Karen Martin and Mark Osterling.