How Vendors Can Apply Customer Centricity When Organizing Around Value

Organizing Around Value

Lots of organizations are organized around functional silos — such as business, system engineering, hardware, software, testing/QA, and operations. These structures exist because they support specialization and allow organizations to grow and manage their people effectively. It’s why so many organizations are set up in this way. And many organizations persist in this siloed structure even when they start their journey toward business agility.

Development and Operational Value Streams

Development value streams (DVSs) are the organizational construct used by SAFe to create this value stream network. DVSs are where the essential activities of defining, implementing, and supporting innovative, digitally enabled solutions occur. Defined correctly, DVSs are able to deliver valuable business solutions on their own with minimal dependencies on other parts of the business.

What’s the Right Approach to Defining Operational Value Streams?

Identifying the OVS is a relatively straightforward exercise for a technology/development organization trying to organize effectively around the value that the wider organization is delivering to customers. People supporting systems that are used when providing these services (digital or physical) can easily apply customer-centric thinking and identify an OVS oriented around the needs of the real external customer.

When to use which modeling approach

Emphasize Customer Centricity as Part of Value Stream Identification

The example above illustrates why vendors can find it daunting to figure out which OVS to focus on. Going down the software product OVS perspective often leads to confusion and lack of guidance because it’s disconnected from how the products are used and from the solution context. A common move vendors make at this point is to fall back to organizing around products. Being able to explore, build, deploy, release, and operate/maintain a product can be a significant improvement for some organizations.

Look beyond one product/system — look for collaborations amongst products

Going back to our AI-powered underwriting product example — This product actually supports multiple steps in the customer-centric OVS, and requires new features across a range of the vendor’s products. Maximizing the value of AI-powered underwriting requires collaboration and coordination with the groups developing these products. If all of these different products are built by different DVSs, this coordination will be slow and painful. If the vendor organizes around value and brings the right people with the ability to get AI-powered underwriting integrated into the different products, time-to-market and quality will be improved. People would also feel more motivated and engaged since they’re very focused and effective.

Other benefits of starting from Customer-Centric Operational Value Streams

When a DVS is created to support a customer-centric OVS, the organization can use techniques including value stream mapping and design thinking to innovate “in the Gemba — where the real value flows.” When this DVS includes everyone needed to explore, build, deploy, and support solutions that cut across the customer-centric OVS, we’ve truly created a network operating system that’s organized around value. And we’ve taken a huge step toward enabling real business agility.

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Yuval Yeret

Yuval Yeret

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Business Agility Coach | SAFe Fellow and SPCT | Scrum.org PST | CTO and Partner @ AgileSparks