Value can take on many meanings and if we are not explicit about it we risk sub division and sub optimization. In this article I will talk about the risks of not defining your value and what it can mean for you and your organization.
The value of implementing agile practices and methods are today know by many companies. Studies have come to show how agile practices and methods can bring a competitive edge, more engaged employees, more innovation, faster time to market and with that often a true monetary value in return.
But in agile we also often talk about value in another context, as something we strive to create. We want to minimize “waste” and maximize the creation of “value” for our users and customers. Now, the word value can be used by organizations for many different things. Business value, customer value, efficiency value, market value etc. But here I focus on the value for our users and customers since that is the end product of everything else, what we after everything delivers to our customers. If we work to make something more efficient it seldom for the sake of making it more efficient itself. Instead it is because making something more efficient at the end enables us to better deliver value to our customers. But what is this value for your customers and users in your company? It’s a very basic question that all to often, when asked somewhere in an organization, results in a awkward moment of silence. This is often followed by an attempt at an explanation of the word.
But when you scratch the surface it often becomes apparent that the explanation just given was a personal one, or at the very best one shared within the given department of the company. That in itself is neither wrong or unexpected. When asked a question we often look into ourselves and try to identify our definition of something based on previous knowledge. But all to often this identifies a lack of knowledge about the company’s idea of value, purpose or reason for existing. Knowing peoples personal definitions, or convictions, of value can be crucial when starting out with agile. But if we aim to create an agile organization working as one organism to efficiently adapt and generate value, having hundreds of individuals whom have been left to figure out their own definitions of value or purpose will not be sufficient.
The thing we want to be able to answer is “what is value”, not for the individual, but for the organization. What do we, as an entity, aim to offer our users and customers?
The importance of defining “value”
But why is this important? Well, “value” in agile is a bit like the definition of “why” in a change that I wrote about earlier. It brings into focus why we do what we do, what our mission and our reason for existing is. Also, when we feel we are unsure about what to do next or which of a big list of “important things” to focus our effort on it can help guide us to make the right decision. In most organizations this, on a philosophical level, is known and agreed to. But many organizations miss to actually create a coherent and common understanding of what it means in reality.
It’s a bit like how many organizations have mission and visions they tout and most employees can recite. Or how words like boldness, integrity, honesty, trustworthiness, fairness, accountability, learning and customer experience are said to be the “company values”. But when asked about what those words really mean, how they influence and guide every day life for employees, customers, customer interaction, innovation etc it to often becomes apparent that the words are just words memorized from a company pamphlet. We claim these are the guiding principles in our company but we all to often fail to even make “how” clear enough even for our own employees to understand. Not to mention the fact that many times people in management don’t give even remotely similar answers when trying to explain it… and they are often the ones who came up with it!
If we create an organization that should work in the pursuit of creating “value” but we don’t make sure the definition of the very thing we seek to create is known and shared, we risk having very dedicated people working very hard in different directions.
We risk having departments that, since they know “value” is important to the company even though it’s not clear exactly what it is, come up with their own definitions of value. What follows from that is that each department will form their subsequent convictions of what is most important and possibly even their culture based on their own internal view, not the view of “the company”. This in turn puts us at risk of making transparency, co-operation and understanding between departments much harder. Which often lead into a mentality of “us” and “them”, instead of acting as a united whole of teams working for a common goal.
The risk of this is having departments sub optimize parts of our organization in a way that for that given department based on their own views, convictions and knowledge makes perfect sense. But might be counter productive to other departments work or even hindering the very creation of the value which is the reason for the company’s existence.
Let us for the sake of argument say we work for a company in the business of developing some kind of software solution for the market. The software created by the company is critical to many customers businesses and their compliance with regulatory statues. Bugfixes and new features need to be pushed out on a regular basis. One could argue that the value the company produces is the solution for the customers to have a software to help them handle mission critical tasks and comply with regulations. The deliverance of that value to them is what brought them to us, what makes them give us money, which in turn fuels our entire business, pays our salaries, enables us to keep innovating and hopefully with that identify and deliver even more value to the customers. Every thing the company does internally, be it setting up test servers, producing educational material, handling support tickets all tie in to the companies mission to deliver this value to the end users.
Our company stresses that “waste should be minimized” and “creation of value should be maximized”. But, just like with the company’s vison statement and company values, it has not clearly communicated what the “value” actually is.
Our company, like many, has an internal IT department. Such a department, in such a setting, can be seen as a service department meant to help facilitate and simplify the usage of the companies IT equipment and resources so it can be used in our pursuit of the creation of the defined value. IT departments often have a wide array of different kinds of tasks on their plate and somehow have to juggle all of these. Both in the actual “effort” put into them and when conflict arise between them they must be able to weigh the “importance” of different issues against each other.
A not uncommon concern for such a department is IT security, which is often a big and complex area that can include a multitude of threats to deal with as well as a sea of applications and frameworks to try and implement good practices within a company with.
Even though maintaining good IT security, keeping information safe and making sure potential threats are handled is very important, it is not the main reason for the company’s existence. It is a supporting function that can help in our pursuit of the creation of our defined value, but it isn’t the defined value in itself.
Since IT security is such an important topic it is not a strange thing to expect the people who work with it to passionately care about it (in fact many more of us should). But without a clear understanding of our mission and what value we are creating we risk, with good intentions, sub optimizing for something that in itself is not the company’s actual goal. IT security and keeping machines, the network, servers etc “safe” can become “the most important” aspect for the department. We risk sub optimizing our IT infrastructure and our processes surrounding it in a way that becomes detrimental to our value creating process, since we only focused on security.
One way to achieve higher security would be to lock all the computers out of the network, or not even have a network. Don’t allow any programs to be executed on the computers or any files to be saved. It sounds ridiculous of course, but it does add to “security”. If that is our only concern or if that was the “value” we believed our department was creating then that would mean “a job well done”.
Even though it might sound absurd, I have actually seen examples from multiple places, where this notion of responsibility of for instance “security” leads to so much red tape and locked down systems that it affects the companies ability to deliver the actual “value” they, according to themselves, exist to create. Developers who are unable to install software to quickly try ideas, security software that makes developers machines crawl to a halt. I have even seen developers unable to copy a file without contacting their IT department.
Now, don’t get me wrong. As stated IT security is a super important topic that, in many companies, get way to little attention until it’s to late and it should be on the agenda of any self respecting company. I used the example to highlight what can happen if we stare ourselves blind on what is in front of us and don’t lift our eyes to see the whole picture. It could just as well have been a sales department who’s sole focus was on closing a deal no matter what or a customer service department overly focused on their KPI of “number of cases per day” all without understanding the bigger picture or their part in it.
Perhaps the above mentioned IT department really must lock down applications and machines on the network to keep the business operating. But if that affects developers ability to quickly test things and experiment perhaps a better way would have been to segment the network or have isolated machines where developers were free to experiment and go crazy. All while fulfilling their task and at the same time making sure its negative impact in our ability to create value is minimized.
Where to start?
If you recognize yourself or your organization in this you are not alone. Often times things you thought was probably “obvious to the rest of the organization” and you just “didn’t get it” instead turns out to be very poorly defined and lacking any kind of common understanding.
But what can be done? Depending on where you are in the organization, the organizations maturity level etc the answer could of course differ. But we can all start by asking questions, to yourself, the team and the organization. Not from a place of accusation, but from interest.
- “Who are our customers?”
- “What is the value we deliver to our customers?”
- “How do we work to make sure their needs are what we focus on?”
If answering those questions feels challenging, perhaps that ignites the idea in the one being asked the question that there is something to work on.
You could use tools such as a Business Model Canvas to model your business models. Value Proposition Canvases to map identified customer needs to how, or even if, we actually meet those needs. Do we even develop what the customer needs or do we develop what we want and then try to convince the customer that this is what he needs? If we struggle when trying to line these up, perhaps we are focusing our efforts on the wrong things.
Map out your value streams to identify if you are organized in a way that is optimized to facilitate the flow of value across functional silos, activities and boundaries or if we in fact cut our streams off.
And don’t be afraid to actually talk to your customers. Through dialogue and close collaboration we can identify our customers needs and work along side them to fill those needs. Delivering true value to them.
Not until we take a birds eye view with a clear understanding of what value we are trying to create and why, does it become obvious that we might have parts of our organization making that pursuit so much harder.
There will of course be many parts to the the creation of value in our organization. Different departments will contribute different things that can be crucial for the whole to function. HR will not directly work on building the software we sell, but their contribution can make or break the organizations ability to be successful. But there is a difference in understanding the whole and our contribution to it versus viewing the world through our own lens and defining value by what is most important for us or our department.
A clear, common understanding of the value we have set out to create is something we should always have in our thoughts when making decisions. The contribution to, or negative impact by, our decisions on the greater whole and the value we aim to create must be a integral part of every decision. Something that is only possible if we first know and understand it.