Steve Pereira

Welcome to our session on flow engineering. We're going to be sharing a strategy for leading across the organization from the inside out.

I'm Steve Pereira. I am the founder and CEO of Visible Value Stream Consulting.

Andrew Davis

And I'm Andrew Davis. I'm the senior director of research and innovation at Copado.

We'd like to introduce you also to Sharon. Sharon is our fictional director of software engineering at Bolt Global.

We want to tell you a story. We want to tell you Sharon's story, and a story about working with Sharon to help her out. This story is touching on three things: optimizing for clarity, value, and flow across an organization; how to use the technique of collaborative mapping to take what's inside our minds and put it out in a form that everybody can align around; and then, through that, how to create win-win-win situations for customers, for the business, and for the individual contributors.

Sharon's challenge: here's the scenario. Her company, Bolt Global, is facing a lot of market pressure. Competitive pressure is pushing them to make operational efficiency improvements and also open up new lines of business. They've launched a bunch of improvement initiatives, and that has in turn created a lot of work for Sharon's team and a massive backlog of changes that her team is tasked with delivering. So she's under pressure to figure out how to deliver twice as fast as she's able to do today.

The only question, then, is how.

Although it's a fictional scenario, Sharon is facing situations similar to lots of organizations around the world. We know a lot of these massive IT initiatives, digital transformation projects, and so forth end in failure. When we look at the literature about why many of these initiatives struggle to get off the ground or struggle to succeed, a lot of sources point to an underlying lack of clarity. Either the leading founding teams fail to gain the clarity that they need, or they fail to share that clarity across the organization, or they fail to sustain clarity as the competitive landscape is changing and technology is evolving.

So we're going to tell you about how to build clarity, but first focusing on why we struggle to find clarity.

Think about Sharon's situation. She's operating within the limits of her individual perceptual capacity. She can pay attention to company strategic initiatives, her own initiatives that she's trying to roll out, the work items that her team is working on, and the interpersonal dynamics and personal situations of people on her team. It's a lot to balance, and she finds herself doing a lot of context switching through the day and struggling to keep everything straight in her own mind, just due to the limits of our human mental capacity.

As a species, we have learned how to create and enhance our clarity through culture, through interacting with other members of our community and our group, so that we don't necessarily have to know everything, but we can lean on the people around us. But cultural issues can also interfere with clarity. Power dynamics, the presence of fear in an organization, and so forth can impede people's ability to speak up and say what they actually honestly think about a situation. Organizations can end up being blindsided in dramatic ways when culture is not conducive to clarity.

That's particularly problematic today because the systems that we're working on, for example, Sharon's team, are building something like 15 or 20 different applications. They all interact with each other in different ways. They're built on different technology stacks. The market landscape is changing. So there's a phenomenal amount of complexity that her team is trying to manage and that she's trying to manage. These three things together mean that it's legitimately hard to find clarity.

What we want to share with you today is something of an underrated capability in organizations these days, and it is collaborative mapping. It's bringing separate perspectives and individuals together to create a common understanding through mapping together.

By co-creating maps, by creating this canvas of separate perspectives, separate ideas, and challenges, we're able to aid the improved performance of Sharon's team by getting all of the contributors to bring their best ideas and their own perceptions to this common canvas that creates this common understanding. The practice here is highly engaging. We're bringing everybody and allowing them to speak up, to bring their strengths and capabilities to the team in a novel and fun way of collaborating. The effect of this is that we create a shared context and a shared understanding.

Also, allowing people to bring their perspectives means that they have a sense of ownership over the outcome. You might recognize this as the IKEA effect: when you build something, you feel better about the end product. By bringing everyone together, we're able to create a sense of alignment, almost convergence of these separate perspectives to a unified view of what's happening and what we can do with our capabilities and our situation.

This is not a one-size-fits-all approach. It's not a copy and paste that we know doesn't work. It's not a heavy framework or trying to adopt the practices of another company. We're creating something with Sharon's team, for Sharon's team, in Sharon's situation. While we're doing this, everyone is learning about flow. They're learning about how to improve performance by doing the mapping and revealing these opportunities, bottlenecks, challenges, and surfacing all of these things that often stay hidden behind the scenes.

One of the best aspects of this, under the current circumstances, is that it's very remote-friendly. We're able to include participants across Sharon's team who might reside in different locations, or who are only in the office a couple of days a week, so scheduling might be a nightmare if we didn't have something that was very remote-friendly.

We're going to be guiding Sharon's team through a process that we call flow engineering, trying to optimize and improve flow. We're going to be using three specific maps to do this. We're going to start by aligning every participant on Sharon's team under a common understanding of what our target outcome is. What are we trying to achieve? We know two times faster, but what does that really mean, and what is it going to take to get there?

Secondly, we're going to explore what the current constraints are on what we're doing right now. Where are things challenging? Where do things slow down? What is not working out about the work that we're doing right now?

We explore that in further detail by examining dependencies. What are the things that are slowing us down, perhaps inside the team or outside the team, that we might be able to influence or mitigate?

Starting off this process, we begin with the end in mind by breaking down that outcome of going twice as fast. What does that mean? What are we going to have to do to get there? Starting from that point, we guide Sharon's team as facilitators through breaking down what twice as fast actually looks like.

We want to make sure that we don't lose track of other important initiatives like keeping the lights on. We don't want to pull too far in terms of velocity so that quality suffers. It's important to the team to highlight that we want to make sure that we don't sacrifice quality as we go.

The second piece about exploring this outcome is forming a deep common understanding about why this is valuable. Why should we ignore everything else that we could be doing in service of this one focused outcome? That anchors the outcome in the team and makes it very real and tangible and powerful as a motivation for moving forward.

The next thing that we want to explore as a contribution to the outcome is what is going to get in our way. What are those hidden Lego pieces that we're going to stumble upon in the middle of the night as we're heading towards the fridge for our midnight snack? Looking at obstacles, the things that could hinder our progress, gets all of our fears and challenges and things that we think are going to be troublesome out into the open so that we can form a strategy to avoid them.

Then we'll look at investigations. How can we learn more about the outcome that we're heading towards? How can we learn more about what's going to help us avoid obstacles or get us to where we're going as quickly as possible? Finally, what we want to highlight are the measurements that are going to reveal a sense of progress, that are going to show us that we're headed in the right direction. By building this map with Sharon's team, everybody's on the same page. There's this very strong and clear understanding of what it's going to take for us to get to our target outcome.

This exercise opens up clarity by bringing together points of view from different members of the team and different concerns. One of the first things that this often exposes is that there are a lot of different goals and different values. Customers have varying sets of things they want. The business has varying sets of things they want. Employees have varying sets of things that they want. This is something that's always happening, but it's not always made explicit. Once you've surfaced these various potentially competing goals, you need to figure out which of these, if any, you can sacrifice, and from among the goals and priorities that remain, how best to balance these.

This speaks to there being three elements to any action. We like this framework. It's a very simple way to think about things.

First, there's taking in information and beginning to make sense of it: perceiving and understanding. The first thing Sharon and her team do is lay down the bits of information that they have.

Second, there's a decision-making process always prior to an action. That decision-making process is really a process of balancing various possible outcomes to determine what course to chart based on these competing goals. Only once you've made a decision, and again, a decision is a fundamentally emotional decision. You take raw information and make an emotional call on what's most valuable, what's the best outcome. Then you can take action.

Of course, the loop always continues once you've taken an action. You're getting feedback from the world. Things have changed. You're trying to reorient yourself to the next new reality. But these three always are in operation. If you look at all three of them, they're on a spectrum. In perceiving and understanding, there's a spectrum from raw confusion, which is where Sharon was originally starting out when she was first tasked to make these improvements, to a state of clarity. This is maximizing her ability to take in information and make sense of it.

In terms of decision-making, the real risk is making the wrong decision. Like the old adage that management is doing things right and leadership is doing the right things. Decision-making is a leadership choice about whether you are making the right decision, whether you are making a decision that's going to take you in an effective direction, and whether you are actually going to be able to realize value from the activities you take on.

When it comes to action, there's again a spectrum ranging from pure inefficiency, clumsiness, a lot of waste and friction, to a state of flow. These are the three aspects. They all have this continuum. We really want to optimize clarity, value, and flow throughout the entire organization.

Understanding a lot more about our outcome and creating a sense of clarity and shared ownership over that outcome has driven us to look at what we're doing right now that we can improve in order to get to twice as fast. We want to use value stream mapping to discover a common bottleneck that we can focus on in order to improve the performance of the entire stream.

When we're mapping a value stream, we start by laying out all the activities involved that are contributing to our delivery of value. But we want to make this actionable, and so it takes measurement. We want to understand the difference between all these actions. Which one should we focus on? Where is the real constraint that should drive our decision-making? So we establish how long all of these activities take. We also highlight the delays between each activity, whether it's a handoff to a different department or even context switching through individuals.

What this brings us to is that, by our ability to measure very simply, we can identify a hotspot that is extremely valuable if we address it. We have environment setup here taking up 45% of the total time in the value stream, which means that if we tackle that, we're a good way towards our twice-as-fast metric, and we can tackle that and then look elsewhere for other bottlenecks and constraints. Starting at environment setup puts us into a good state for moving forward.

When we're looking at value stream mapping, we're focusing on collective flow, collective workflow. Taking, for example, a sequence of tasks and seeing how we can minimize delays and minimize friction in terms of enabling the team to get work done and handle the handoffs.

Collective flow opens the door to personal workflow, or the personal experience of flow. This speaks to the psychological state of flow, which has been widely discussed since the '80s: a state in which the challenge that you're working on is a reasonable match for your skill level. There's what's called a flow channel, where the challenge is a reasonable match for your skill, and your skills naturally increase, and the challenges rise with them. When you're in the flow channel, it naturally is conducive to an experience of joy.

This experience of joy is not just a luxury add-on to the process of knowledge work. It's really critical to maximize engagement so that you're not facing a situation like Gallup says, where only 35% of workers are really engaged in their jobs. You're reclaiming all of that surplus mental energy and creativity from your team. Through that, you're naturally maximizing performance because you've created a situation that's conducive to your team increasing their skills systematically, urged onwards by this experience of joy.

Now that we have clarified our outcome and revealed this very powerful and valuable constraint in the flow, we can dig a little bit deeper. We have to, because it turns out that environment setup is actually not entirely handled by Sharon's team. In fact, it's handled externally, and Sharon's team doesn't actually have any control over that. They have to go elsewhere. Where they go to get environment changes is the infrastructure team.

This is one piece of the puzzle, but among all of the dependencies that are affecting the flow, focusing here is really going to allow us to channel all the energy on the team towards this common goal. Once we get that out of the way, we can look elsewhere. But as a simplified starting point to clarify and focus our efforts, we are brought to the infrastructure team to try to alleviate this bottleneck.

The infrastructure team is run by Kim as the director. The infrastructure team looks after all of the environments: the development, testing, and production environments. One of the characteristics is that they're always swamped. They've got tons of interruptions from production issues and notifications. They've got a lot of long-running projects that they've been working on, in some cases for years. It's put Kim in a position of basically having to ignore any external requests. She's at or above capacity, and so she's not really got any excess capacity mentally or time-wise to begin to think about Sharon and Sharon's concerns.

What we do is return to mapping to create a shared perspective. What we're aiming to do here is a second pass by including Kim as a first-class participant in the process. We don't want to create a bunch of maps and dump them on Kim and say, "Hey, it turns out you're the problem, and we need you to help us out." We're looking to include Kim in this process and make sure that she benefits just as much as Sharon's team.

The way that we do this is by recreating an outcome map between the two groups to find a common win-win scenario. That brings us to a common value stream map. What is the flow inside of environment setup? We're digging deeper to find out where the bottleneck in environment setup is now. Where can we influence the flow inside of Kim's team in order to increase her capacity and, likewise, increase the capacity of Sharon's team to deliver value?

These issues of clarity, value, and flow become harder as you scale up. Introducing Kim and Sharon is introducing two very different perspectives. They deal with totally different systems, totally different people, and totally different concerns on a day-to-day basis. As a result, they've also got different goals, so their values are not naturally aligned.

As you move through an organization through different zoom levels, it's very hard for any individual to keep the whole picture in their mind. Sharon has a broad picture of what's going on in her team, but she may not know the details of particular projects that her developers are working on. Similarly with Kim, she may not understand the details of particular servers. As you move up through executive levels of management, they may have a high-level picture of what's going on in the organization, but lack all the adequate detail on what's happening at a detailed level.

When we bring Sharon and Kim together, often we encounter this issue of personality clash and two people who may be hesitant or reluctant to get along with one another. This is exacerbated by seeing these two people as kind of an opaque entity, where you just see it as a person, but not realizing the psychology going on inside their minds.

In Sharon's mind, of course, she's got a collection of perceptions and understandings, and they're built up over time based on her training and experiences and culture. That guides her decision-making based on what she values and guides her actions based on what seems to be the most effective way to accomplish this. She builds up a sense of self. She has some sense that, "I, Sharon, this is how I see things. This is what I want. This is what I do." She's built up this sense of self around these perceptions, values, and activities.

Kim is the same. She's got her own set of information and framework structure that she uses to understand the world, her own goals, and her own behaviors, and she's built her sense of self around those mental capabilities to a great degree. What we're doing and focusing on through collaborative mapping is beginning to establish a shared view between these two people.

By establishing a shared view, you open the door to establishing shared goals. You can begin to balance and prioritize competing values, and you open the door to shared activity, the ability to actually act together and work together. Further, you also open up the possibility of shared identity.

For example, on Kim's team, because they're dealing with very similar situations every day, they've got a very similar perception. They've got similar goals. They've got similar activities. Kim's team is very cohesive inside the team, but they regard other teams outside of them as other: not their team. The self/other dichotomy comes from who you see to be similar to you in terms of their views, their intentions, and their activities. Aligning those views, intentions, and activities creates cohesion and unification.

Shared activity, in particular, creates shared identity among various things that help to build a shared identity. If you want to unify action, you need to unify people's minds, especially starting with a shared view.

In the case of the broader organization, we're going to zoom out and provide an overview of where we are so far. We're in a situation where the organization needs to improve its capacity to deliver value. It wants to go faster, which means that Sharon's team needs to go faster and needs capacity to improve performance. We also have the need, by identifying that bottleneck in Sharon's team as Kim's environment setup, for Kim's team to improve its capacity to deliver value. But of course, we immediately encounter this situation where Kim's team is overworked. Where are they going to get this improved capacity from?

That's what we're aiming for with this collaborative mapping between the two groups of people. We're targeting environment setup and looking at how we can bring Kim and Sharon together toward common improvement of performance by digging deeper into that. In that common value stream mapping exercise, we dig a little bit deeper and find out that we have several activities happening inside environment setup, and we want to identify the bottleneck there. We're digging deeper to find out the constraint that's going to move the needle the most.

That brings us to a few separate areas. First, we discover that provisioning data, tearing it down, and refreshing it takes up a massive amount of environment setup. By refreshing the data only when it's needed, we're able to reduce the setup time by a significant percentage.

That brings us to the next bottleneck, and we can knock these off one at a time. By minimizing manual testing, we're able to drop setup time by a higher percentage, but the reason we did it second is that it takes a little bit more work than just that data check.

Finally, as we're getting into diminishing returns, we discover that updating the environment itself, reprovisioning containers, also drops the setup time by a significant percentage. But we stop there because we've hit a great return on investment for this exercise by digging deeper into these constraints.

As a result, what we discover is that we're able to reduce the total time, the lead time of Sharon's team's value stream, by 35%. By tackling environment setup and reducing the total time it takes to do environment setup, we've reduced the total time it takes to do the entire value delivery process and increased that capacity for delivering faster. As a result, Kim's team is going faster by improving its capacity, Sharon's team is able to improve its capacity and go faster, and the organization is benefiting by improving its ability to deliver value at a higher level of performance.

These elements of action are similar at every scale, which is one reason why we like this. As an individual, Sharon has to go through this loop on an ongoing basis of perceiving, deciding, and acting. Teams have to operate in a similar fashion. Even at an organizational level, they're taking in a massive amount of information, trying to make sense of it, making decisions, and taking actions collectively.

When we look at the fastest way to build flow, you need to look at psychological alignment as your first step. Helping disparate parties build a shared view, and doing it together, building it together, is the most powerful way to get that joint ownership. On the basis of shared view, you can begin to get shared goals, and from that, shared activity. This kind of unification is created by building these maps together especially.

In summary: flow engineering, mapping your path to success. We've looked at outcome maps and how Sharon used these to clarify the goals that her team was trying to accomplish, value stream maps that she used to identify the exact challenge and limitation that her team was facing, and dependency maps that Sharon used to identify and isolate the exact thing that was holding her team up, which ended up being outside of her team entirely.

That's why we come back to bringing Kim in to take a look at the shared outcomes that both Kim and Sharon can align to. What are they both trying to accomplish? How can we best mesh their individual perspectives? We begin to look at the aspects of the value stream that are shared by both Kim and Sharon, looking at improvement opportunities that would also benefit Kim and her team enormously, as well as Sharon.

In summary, with outcome mapping, what we're doing especially is clarifying goals. There are a lot of different techniques that can be used, frameworks and so forth, for doing this. The real purpose is just getting that clarity and shared understanding.

With value stream mapping, again, there are many different approaches you can take, but your real goal is to identify the constraints in your process. In dependency mapping, your focus is how to address those constraints, understanding inside the value stream what's actually driving efficiency or impediments.

One thing we'd like to leave you with is emphasizing the power of building shared clarity as a foundation for collaboration. Steve and I are working on a book with IT Revolution that's due out next fall. The book is on succeeding with value stream management by building clarity, value, and flow. We're delighted to have a chance to share this as a summary of that material in advance.

We could really use your help as well. We're looking for stories from your experience of where you've seen cross-team dependencies work or lead to failures and difficulties. We'd love to include any of that in the book or just use that to inform our understanding.

We're available at inside-out.work. We have a biweekly newsletter as well as weekly office hours. We'd love to connect with you more and discuss what you're seeing in the world of work. Thank you so much.