How Your Value Stream Management Practices Enable DevOps and Data-Driven Organizational Strategy (Europe 2021)

The combination of Value Stream Management (VSM), DevOps, and Data-Driven Organizational Strategy is crucial to the long-term success of modern organizations in highly connected and competitive environments. The challenge is that defining your VSM Strategy tends to go straight from Step B to Step G without any regard for everything that needs to happen from C to F. In order to understand how to support your Development Value Streams, you must understand the purpose for which your business exists, what exactly is the value that it delivers, and how do you measure the successful delivery of that value (hint: it’s not ROI). Once you know what your currency of value is and how you measure it, you still shouldn’t go straight to what systems you use to create that value. Before you go to systems, you have to look at what business processes you use to execute your Operational Value Stream. Once you know what business processes you have in place, then and only then, can you truly define your VSM Strategy. Our session will review proven success patterns and real examples of how clients have advanced their Value Stream Management practices to create better DevOps and Data-Driven Organizational strategies. We will also highlight common failure points and how to overcome them.


Saahil Panikar

Project & Team, Principal Consultant


Lindy Quick

Agile Transformation Lead, Northrop Grumman



Hello, thank you so much for joining us here at our talk, changing the way we organize around value. My name is Sahil panicker and I'm excited to be joined by Lindy quick. As we tell you a little bit about our journey and our experience implementing business agility, dev ops, and some new concepts to the Northrop Grumman digital transformation.


Hi, I'm Lindsay quick and agile transformation coach Northrop Grumman, and I am so happy to be presenting us the hill as well. I'm a safe program consultant five and some a bit about my background was I spent 15 years at social security administration as a programmer, and then went into management where I drove the agile transformation and automated testing for the disability case processing system. After that I left and went to guardian life insurance, where I was the ABP responsible for driving agile transformation at the portfolio level for one of Guardian's subsidiaries. Fortunately, then I had the opportunity to join Northrop Grumman several years ago, and step into agile coaching and product delivery, where I've just had so much fun and learned so much along the way that I'm excited to share with you today.


Awesome. Thanks Lindy. Um, and just a little bit about myself. Like I said, my name is Sahil panicker. I am a safe SPCT five, um, in a previous life, I was a data scientist. And so I I've always been really passionate about, about bringing that sort of data-driven mind and that organizational clarity to the work that I do. I started doing agile over 10 years ago and went to my first organizational transformation in 2014. Um, I started out with the federal government at the department of veterans affairs and then moved over to private industry. And I've had experience in healthcare, financial services, oil, and gas, and have been lucky enough to, uh, spend the last year at Northrop Grumman is, you know, in the defense and aerospace industry across all of those industries. I have seen some unique challenges to transformation and some pretty common ones.


And, um, I'm really excited to tell you about the Northrop Grumman experience. And we're going to get into that in a lot of detail over the next 25 to 30 minutes or so. And I hope that you find as much value out of this as we have gotten learning about these things. So when new, if you would mind clicking to the next slide, um, first thing I just want to cover, right, just real baseline is what is a value stream? It's critical to the conversation that we want to have with you. Uh, you probably know already a value stream is a series of interconnected steps that allow you to deliver value, whatever that value might be, uh, to your end user or your customer. So it's all the workflows, the people, the systems, and the processes that are required to go from your trigger all the way to your value delivery.


And we talk about two different kinds of value streams. We have the operational value stream, which is your business function, right? It's the reason you exist. It's the purpose that you are trying to fulfill. It's why your customer cares about you, right? Your, your customer doesn't really care about all the steps inside the value stream, but they care about that value that you're going to deliver to them. And so I don't think I'm exaggerating when I say your operational value stream is the reason you exist. But then as we look at our dev ops implementation, as we look at our transformation across business agility and digital transformation, we have to consider the development value streams as well. And these are supporting value streets. They are the value streams that are designed to convert a business hypothesis into a digitally enabled solution. And basically what that means is we need to better support the functions in our operational value stream. And we want to deliver solutions working solutions to either our internal organization that will enable better value delivery or directly to our end user because our development value stream, um, has a multi-use context. So as long as we understand that the value stream is the steps that we go through to deliver value. We're able to have a very meaningful conversation about what we've learned, trying to do this in an organization as complex as north road.


So Northrop Grumman has issued when two different calls to action, both coming from our CEO, Kathy warden, the first one was actually a call for agility where Northrop Grumman is really striving to reduce the bureaucracy and be able to move quickly and nimbly through, uh, all the different contracting that we do. All the different building that we do from hardware to software and everything in between. And the leadership of these efforts really have started at the top. And it's really exciting to see, you know, your leadership of an organization really onboard with this, but we realized that early on that the call for agility wasn't enough. And so we've also had a call for digital transformation, and this is really focused on key partnerships and on being able to respond faster through the use of technology, not just to get new business, but to include our legacy systems as well.


And I think that's been one of the challenges with Northrop Grumman is we are so ingrained in how we've done things. We have this building quality already part of our culture, but what we have struggled with is making all of that work together. And so what we're doing right now is really driving to combine our agility and our digital transformation together so that we are able to build out systems as fast as possible with the highest quality possible and focus on delivering that value to our customers through the use of our value streams. So we're aligning relining a lot of our business to those value streams, but it's not easy. And so that's also some of us that hill and I are going to talk to you about today.


Awesome, awesome. Lindy, before we jump into this slide, I think it, it really is worth driving home. Like I said, I have, I have done these transformations in quite a few different organizations and in 10 years of agility and transforming large companies, I have never seen a company quite as complex as Northrop Grumman. And I have worked with fortune 10 fortune 20 companies that they have a lot going on, but the interconnectedness and the complexity of the business architecture is, is just on another level here


As to who you're absolutely right. And, you know, while Northrop Grumman, isn't unique in the defense sector, we do have tons and tons and tons of moving parts that are going in a million different directions. I think that's, what's made our transformation, uh, as difficult as it has been, but, uh, also very successful at the same time. You Northrop Grumman, isn't only trying to become more agile, but we're really trying to drive and leverage that technology and all aspects of our business. And so most companies, you are familiar with the technology challenges around, uh, digital transformation or through, you know, becoming more agile, right. Or, you know, we focus a lot on software agility, but at Northrop Grumman, we couldn't just live in those two realms alone. We had to drive that excellence through model based systems engineering. We also had to drive into the business aspect, how we write proposals, how we do those bids, and then we're a manufacturing company.


So we have to understand how lean and agile work together, how we tie that into dev ops in conjunction with the model based systems engineering to really drive that hardware agility as well. And so it's not just a little segment here, a little segment there, but we're building, having to transform the entire company top to bottom. And it's hard, right? Because there's so many different moving pieces and it's not like we can stop and say, magically we're transformed. We have to do it incrementally on bit by bit basis. And that makes it almost even more difficult. Uh, but unfortunately, you know, we've found some good success, um, with those challenges, uh, and you know, to identify some of those challenges, even further, you know, Northrop Grumman has some big challenges when it comes to how we fund our projects. And this is tied to, you know, legacy contracts that have been in place for many, many, many years.


And as I mentioned earlier, we're starting to shift how we write those contracts, but many of them are multi-year funded, which, you know, for those of us that are well-versed in your value streams, you and we want to look at that funding model, you know, a couple of times a year to make sure that we're funding the right things, all the, but when we have multi-year funding in place and it's tied to federal programs, we have different accounting models that we have to follow. And sometimes that funding doesn't naturally align to the value streams, but it aligns to various specific projects and programs. And then there's not always funding tied to help deliver agility or to deliver digital transformation. And so we're having to look and mold and evolve how we are really shifting and driving all of that transformation in place. So Northern Grumman, it really is forging ahead and we're leveraging key successes in key areas of it are going to drive and change our culture throughout we're working to align our value streams to teach key technologies, not just key programs.


And we're having to change that culture incrementally. One of the biggest things we have is we have many people that are working on a program. And if that funding drops in there, then they'll shift to another program. Um, or they're working on multiple programs at one student that's specialized knowledge technology, um, that they have. And so we're having to make some of these changes to establish our long standing teams to really drive that success and work on moving teams of people from program to program or project to project, depending on the funding, as opposed to just individuals and making these changes has been slow, right? It's hard to change how you've done business for the last 50, 60 years. And so these entrenched behaviors aren't easy. And so, you know, I like to tell us the worry of when, how we have to go through it, how we act to adjust this.


And I always liken it to a vote or a ship coming into the Harbor and it needs to turn around so that it can go back out to sea and Northrop Grumman. It's been slow to get that boat into the Harbor and to get it turned around. But what we've started to see over the last 12 to 24 months is that, you know, we've been making little nudges, little nudges, little nudges, and we're starting to see that ship turn. And then as the faster it goes, it starts to gain momentum. And as we know, you know, an object in motion is to stay in motion. And so we're really starting to see that digital transformation that agility really kind of grab hold, move forward. And we're going to have that ship turned around and no time passed and be headed right back out into the ocean.


Very quickly. The way we were able to do that is we kind of had an aha moment and it came with combining that digital transformation and the, a agility together. But we also took one farther step and we whittled it down to just being a digital thread. Digital transformation is a big undertaking, as you saw. It includes model based system engineering. We had to deal with business agility, software agility, you know, technology, transformation, hardware, manufacturing, um, all of these things. And as we think about from an agile perspective, right, if we're coaching agile teams, we're talking with agile team, we're talking with that programs like, alright, what's our MVP, what's our minimum viable product that we can do. And so we pulled on this digital threat, right? What is the single thread that's weaving all the way through our applications all the way through our programs and focus on just building that first and combining that digital transformation with the business agility or with agility in general, to really set up kind of what that MVP is.


Now, there are lots of companies that are trying to do the same thing as Northrop Grumman, you know, but this digital thread that's kind of been our, our aha moment has been our piece of the puzzle that has really helped us gain traction success, um, as we've been able to move forward. So this realization has really driven us through, uh, to that success. We're going to have a few examples in a couple of sides of some of the programs and some of the turnarounds that we've had. Uh, but I wanna really, I can't hone in enough on the success of this digital thread technology concept, you know, and really creating that extendable configurable integration that goes all the way through your entire program that we're able to understand. And it's really that alignment to a value stream. When we start looking at programs, we want to understand what are all the steps in the process?


How do we go from concept to cash? And we talk about that through a business flow, but what this digital thread gives us is that technology we've all the way through that as well. And so it's that combination of all of them realizing we can't build that all out at once. So we're able to take it, whittle that down from being a whole big fabric, lots of threads, all intertwined together to just a simple, single thread that we're able to wind through. And then we're able to build on that thread and build on that thread and build on that thread iteration over iteration increment, over increment. As we went through this, one of the things we've built out is we started to understand, uh, our digital transformation and our lean agile transformation.


And before you jumped to the next slide, let's say it a little quick for one more second. Um, I really, you know, you said it and I really want to drive this home. The digital thread was the piece that was missing as we were struggling to take the value streams that we had identified and tie that to that those structural challenges that Lindy just talked about, the federally tied funding, the multi-year funding, right. You know, when, when we're trying to be dynamic and adjust to changing market requirements and conditions, and we can't, because we're literally tied to money to a purpose, we were struggling to optimize our value streams in a way that was value added for our customers, right? It's almost like we were designing our processes to get through the system as opposed to deliver to our customer and identifying this digital thread.


I mean, it sounds a little simple, doesn't it just the sort of technology we've through the business process, but what that really enabled us to do was to highlight the core value and then to organize around the optimization of delivering that core value. And then, like Wendy said, adding thread after thread onto the digital thread so that we were able to, it's not quite rebuild, but pivot the already existing structures that we had minimum with minimal disruption to reorient to these new goals of, of delivering through these digital threads. Um, and so I, I just, I really want to drive that home for you guys. Um, and, and Linda, you were on a roll talking about lean agile and how that goes to the digital transformation. So if you can get that back, feel free, otherwise let me know, and I'll just keep going.


Okay, cool. Thanks. So realizing that we had this idea of a digital thread and that it was the missing piece, we then had to figure out how do we connect it to the business process, right? How do we tie it to our value streams and tie it to these long lived programs? And what we realized is the digital thread only works when it is paired with our lean agile transformation and, and that lean agile transformation includes sort of the, the core concepts of industry 4.0 and a lot of our dev ops practices around, um, test driven development automation. Uh, but that lean agile, those principles became the foundation, right? That's how we are changing the culture is by getting people into that muscle memory of doing things in a lean agile way. So we have this lean agile practices. We naturel principles as the foundation and accelerator of digital transformation, right?


And that is intended to provide this cross domain partnership and integration it's at lower costs because that is, you know, one of the most important things we can do in our context, but it still maintains defect, free solutions that satisfy customer expectations. And, and just, you know, I'll be honest. We had a lot of conversation about shouldn't we be exceeding customer expectations. And what we realized was in this context, when our customers are the government and we're building complex defense and weapons systems, we want everything to be dispatched, right. We want them to get exactly what they asked for and for it to work well and simply, right. And so that to us, that is the exceeding in satisfying customer expectations. So that is what lean agile is meant to do for us. And then we really crystallized on these four key pillars that are how our lean agile transformation and enables the digital of Northrop Grumman through the application of our digital threads, our new business process frameworks, and, you know, everything you see here, the dedicated, lean agile teams and trains, engaged business owners to customer centricity and design thinking.


And I cannot emphasize enough the lean portfolio management and value stream economics, because that becomes just absolutely critical to managing the execution of our digital prints, right. Because we're trying to sort of congestion the federal programs, the federally tied missions and those purses to our leaner way of doing the value stream economics. Right. And so we're really trailblazing on this. I can't say that we have figured it all out, and I can't say that it's perfect, but what I can say is we're getting a lot better at it. We're identifying those roadblocks and we're systematically removing them through these conversations. Um, and all of it holds up the digital transformation.


Absolutely. And I'm gonna just pull another Fred here. Right? So pillars really are key and critical, you know, today on our talk, we're kind of focused on that value stream and the lean portfolio management aspect of it. But one pillar on is relief isn't really successful. And so we have found that need for those other three pillars that we have as well to have those dedicated teams, those engaged business owners, and particularly that customer centricity and design thinking as we move forward and really support that digital transformation. And we talk customer centricity, I'm not just talking, you know, our external customers, but even our customers inside of our own programs, you know, our own employees that are working to build these systems. You know, as we look at our dev ops that we're putting into place, the technology that we're now using to build this out, it's absolutely key that our customer just isn't, you know, the federal government or our war fighter, but it's also our own employees who are building these systems, these super complex systems, uh, as we move forward and, uh, you know, work to newly integrate all this together and have a successful lean, agile, digital transformation.


Awesome. I'm solving.


So I want to tell you guys about a couple of different programs. So we've have program ABC and D here, and these are a handful of the successes that we've seen once we started really weaving that digital thread through our value stream and understanding how that all played together. So program a, um, we took them on, they had really long lead times, tons of dependencies, some were known, but they also had some that were unknown. And we worked with that program to really understand their challenges, to lay out what that threads through the system was, and then map that out MPI planet and, uh, had a program board. And I can tell you, it was the most spaghetti filled red stream program board I have ever seen. And I had done something like 30 odd PIs before I got to that. And, uh, what we really took it and focused on is we spent some extra time at the PI event and work to eliminate those dependencies.


Where were they? What were they? Um, and we were actually able to overcome them. And one of my favorite quotes of all time really came from this program. And so I just, I have to read it because I just have to put it's up. Wow. Until this planning event with all of our people, we had no idea. We wouldn't have missed our due dates due to these dependencies. And it really just shows the power of planning, but it also wasn't getting everybody together. And it was absolutely critical that we did that. This was the first PI event that this program had gone through. And it really was key to that success, but that digital thread and understanding how that technology will have all the way through that's where we hit those dependencies. And that's why it was absolutely so critical for us to understand those and start to work, uh, work those. And, and, but what you're saying is without this,


You wouldn't have known those dependencies existed.


Absolutely. We knew a couple of them, but we didn't recognize how many other ones there were until we started understanding all those technology intersections and who we were going to need and how that wove through getting from, you know, concept to cash. Um, and this was actually, um, hardware program. So we were deploying hardware, uh, for this particular program. And there was, uh, you know, how does digital try to apply to hardware? We were able to model out, uh, many of the places where the hardware is going to go and land and found some of those things where it wasn't gonna work. So it was really exciting to see and drive. And so single you're absolutely correct that digital spread was just key to understanding what those dependencies were and how we were going to drive those down program B this one was a little different.


Um, this one was actually a software program, but it's not truly software. It's, it's a little software development configuration, but really it's, it's setting up those model based systems engineering processes. And when this one, we actually had to understand not only the flow through the system, but all the places where those there was touchpoints into that thread, uh, when this program started, they were constantly changing. Their teams were unpredictable. They weren't able to release, um, if they had to upgrade the software, it was down for the whole weekend, um, which when we're doing 24 hour manufacturing, doesn't exactly play nice. Um, and so with this program, um, we actually, I locked the management program management away into a room. This was pre COVID, um, for about three days. And we really spent the time to understand what the underlying architecture was. Cause there was challenges and just getting the software from the development and test environments into production.


But we also spent understanding what that process was. And we were discovered that we had been largely focused on trying to build out a process and then another process and then another process. And this is where that digital thread became so critical. And rather than building out process after process, after process, we took that digital thread and wove it through all the processes. And we knew all the there's the 62 processes in this, um, this particular system. And we welcomed that thread all the way through those 62 processes, getting that bare minimum that we needed. And we were able to follow that thread through the entire life cycle of our legacy products, as well as that new system that we were replacing it with. And on that single thread, we were able to in one pie, once we had that defined. So in three months, we were actually able to show eight parts going all the way through the system, how it flows all the way through, from design to manufacture and develop and manufacturer that we were able to in three months, show that process going all the way through the system and that understanding that digital thread and where all the feeders were coming from, how wove through the business and then what our different customers were, were key to the success of this program.


We also then spent a lot of time fixing our underlying architecture, and this actually happened in that next pie, um, because it was a little harder program to solve or problem to solve. We had to leverage a lot of different dev ops practices. We had the shifts in the technology that we were using. We had to really understand and work closely with, uh, one of our supplier partners to change how we rolled that out and to be able to deliver those incremental bite-size pieces that we wanted to. Um, but again, what we did in that same practice, we understood about what that simplest thread was all the way through the system. And they continue to build upon it and attach more threads to it and more threads to it, more threads to it, to where, uh, I just saw, uh, an update that they had 22 minutes of system upgrade down from two days, um, this morning and the emails came through. So it's very exciting to have that thread line through our programs and to really see how understanding that digital thread and how it impacts our business, how it winds through our value streams, how we deliver that value to the customers is absolutely critical. Do you want to talk about program seeing, because a lot of time at this point,


I would love to talk about this program. Um, so th this one was a large platform upgrade, think of it like an ERP implementation, and it says big, there was some hardware components, but it was mostly software. Um, I was, I had just joined Northrop Grumman a couple months before I was brought into this program and I was working on something else. And then I got told, Hey, there's something happening in there. They're in a lot of trouble, right? This is six months behind schedule. They're $2 million over budget and they need help. Right. And we need to figure out what's going on. Right. So they brought me in and just some initial conversations I was, this is actually one of the conversations that really helped for me crystallized this digital thread concept, right. In the very early days of talking about digital thread and figuring out how we were going to solve these problems at Northridge.


Um, I realized in talking to this program, that there wasn't a whole lot of clarity on the work that they had to be doing. Right. They had teams, they have many teams were executing, they were running sprints. They had, um, you know, some pretty decent development practices in place. But when I was asking questions, like, what is the purpose? What are we trying to achieve? Right. I understand that you're implementing this platform, but why, what does it try? Who's going to use it, what's it for? And no one was able to clearly articulate those, those answers. Um, and so we did, we, we sort of really did identify the digital thread. We spent two days, right? I hope that all the development for two days brought all of the program leadership, the product owners, the scrum masters, the architects, everybody into one room for two days.


It sounds a lot like VI planning. I bet. Cause that's where I was inspired to do it. And we spent two days just identifying the digital thread that tied this program to the rest of the enterprise and understanding what are the use cases that will sort of justify other programs and Northrop Grumman using this platform, or potentially our customers interacting with this platform. And, and, you know, Lindy read a quote. I'm going to read this one because I, I just, I cannot speak to what hearing this for the first time made me feel, um, we've been working on this for six months and until we mapped out the business process, we didn't know how to talk about the work, right? Until we mapped out the business process, tied it to the digital thread. We didn't even know how to talk about the work we had been working on for six months. I just, I mean, that's the power of a digital threat right there.


And program D was a little different. So they've been a waterfall project that wasn't fully funded. It was technology we knew we needed to do. They've been down, we've been dabbling with it for the last couple of years. And this project is in its second sprint right now. But, um, we spent a little bit of time up front to understand what that digital thread was and how it looked, how we were going to use it. And, um, the, this program just is, is taking names right now. Um, but I love the quote from this one in that, uh, one of our senior leaders for that program said, that's incredible. We delivered in two weeks when we previously took us three years to do, and which just speaks volumes once you understand what that digital thread is, what you're trying to deliver to and how it winds through your entire business. That's really where that success of understanding how dev ops and value streams really tied together. And they can't be what your value stream is. You have to understand how your technology plays into it as well. And I think that's one of the key things. If you're going to take anything away from this talk is understanding that winding of the digital thread, that transformation efforts with technology systems in conjunction with your business processes. Now, everything ties together is so absolutely great.


And I think it just goes to show the incredible complexity of, of Northrop Grumman. Right? If you look at that program D uh, I'll tell you the first time I heard that, I said, you mean, you know, we did in two weeks, what took three weeks, right? No, no. They meant years.


Yeah. Yeah. Just the complexity is absolutely overwhelming on that program. And so we just worked so hard to simplify it. I think that would get down to that single thread and understand what that thread was and then to own it and build on it and build on it and build on it. So where's north of growing Northrop Grumman going now, we've had a lot of successes, but we still do have a lot of way to go. Uh, we've been driving our digital transformation by focusing on these digital threads and understanding how we go through each of the systems and that's our big win, but we have to continuously do this. And this is what I mentioned earlier, your work continuously learning and applying these lessons so that we can replicate these successes over and over and over again throughout all of our,


Yeah. Well, one thing, sorry, Lindy one thing to just add, right. We just told you four stories. Those are not the only four stories we have. Right. So when we talk about expanding this to the rest of our business, you know, there is something like 110 programs already using this idea, right? And so again, freakishly large freakishly complex, the expansion is, is critical. And the foundation that we're building is massive, right. And it takes that level of validation to so, Hey, it's working over and over again to really believe this is a direction for the future.


Yeah, absolutely. You know, I know there's many other companies out there too, there are struggling with this and, you know, we've talked about the success we've had with the digital trend for that though, is that shift and change in culture. That's been our biggest hurdle, well that, you know, proving out that this digital thread can work, proving out that we can simplify and understand our frequencies, large frequency, complex systems. And also, you know, we're, we're kind of a bit hands behind our back a little bit too, because we're not only changing Northern gremlins culture, but we're also impacted and culture of the federal government as well. And so it's, that's a two for one battle that we're also fighting because of the way we have our long standing contracts that federally tied funding that we're continually bumping up against, but we are working our way in parallel. And so we have, you know, our lean agile transformation and our digital transformation with our digital thread, both emerging and driving throughout our organization, we recognize that we need to adapt to an ever-changing market and industry, and we have to do that quickly and rapidly, and that's key to going to be our success moving forward.


Awesome. So the last thing we want to leave you with is just a little bit of a shout out and thank you for the inspiration, uh, Dr. Suzette Johnson, uh, Northrop Grumman, fellow, uh, gene Kim, Ken Pugh, uh, Jeff Shu, Paxton event apps, Robin Yemen, your work has been absolutely. Um, the, the inspiration and the nugget that we were able to turn into something that has a ton of meaning. Um, so we really just want to say, thank you for that. Uh, and then for anyone who's watching this, anyone who's working with us in the future, there is something we could use your help on how can we carry this forward, right? First outside of Northrop Grumman, find your digital threads. Let us know if this concept resonates with your organization, right? Help us improve, give us feedback from your organizations. I know that Lindy and I would both welcome any feedback you can give us, just reach out, right? We're both accessible, we're open. We love to connect with people in this space. Um, and then the other really important pieces. We want to see this done outside of aerospace and defense. We really want to see this digital thread concept extended to other contexts so that we can prove this model works, um, for everybody. So again, uh, at this point, I'll just say, thank you so much for giving us the opportunity to talk to you about this. Uh, and we hope to continue the conversation. Uh Wendy's


Absolutely. Thank you, everybody have a wonderful day and we look forward to hearing from you as well.


Thank you so much.