Optimize the whole, not just your part
Avoid local optimization
Why do organizations exist? Because they can create customer value and that’s what generates economic value to the business. It’s important to keep this in mind when optimizing a team, a process or a policy. Otherwise, the result of such effort will be… local optimization – it may improve something locally, but the overall value will actually diminish.
Here is a common example. Imagine that you have multiple teams working on a product. Each team is responsible for their own component. And we want to improve productivity of Team A. And we speed this team up, so now they can produce more. But what they produce is just the functionality of their component. In order to build customer value, other teams are needed as well. But Team A produces their functionality much faster and others can’t keep up. Which means that when Team A created another chunk of work, it cannot be integrated into an end-to-end customer feature because the corresponding parts from other teams are not yet created. So, this partially created work is piling up, without integration, without end-to-end testing. And when time comes and the rest of the teams finally catch up, and begin to integrate, a lot of that functionality—unsurprisingly—doesn’t match, causing lots of rework. So, we just sped up one team to actually slowdown the entire organization. Every time you only improve in one component or function or skill area, the performance of the whole system is likely to actually go down.
Improving the system as a whole
So, a different approach is needed. A different question must be asked. Instead of “How can I improve this team?” we must ask “How do I improve value delivery that this team is a part of?” And as soon as we shift the focus from local to global and start to see the system as a whole, we will begin to notice the real bottlenecks, removing which will allow us to make more positive impact on the customer and on the business.
Here are some useful tips to make this happen:
Value stream analysis
One. Perform value stream analysis. Instead of focusing on a component or a step in the process, map out all steps from conceptualizing a new feature to actually delivering it to the customer. See what is causing delays… and work to eliminate them. Try to understand who is involved in creating value end-to-end and how is their interaction organized. Are there systemic impediments to such interaction that are causing delays, quality problems, etc.? How do these people plan, gain alignment, synchronize execution, review the results?
Focus on outcomes, not just outputs of work
Two. All the effort produces some outputs. This may be software systems, business intelligence reports, organizational policies, marketing campaigns, and so on. Are these outputs creating the outcomes that the organization wants? And do we have a way to actually measure those outcomes? Consider building up customer empathy to understand the desired outcomes ahead of time, and once the outputs have been delivered, apply appropriate measures and empirical evidence to see if you are on the right trajectory.
A leader in a complex environment
Lastly, never settle with what you see. A good leader is the one who relentlessly searches what else can they be missing in the bigger picture view of success. Your next bottleneck may be where you least expect it. Maybe you did value stream analysis and it helped at the beginning, but the next problem is elsewhere. Maybe it’s in the lack of human motivation, or in poorly enabled psychological safety. Or maybe it’s the skillsets that are a problem. Or long-term architecture. Or even something completely different.
So, try to take a system’s view in your situation. And ask yourself, what is the most impactful bottleneck: one or two things that prevent your teams from delivering end-to-end value in a productive manner. And once identified, plan a first step of corrective actions. But involve your teams in this. This way you will see what they see and sense what they sense and that’s a lot of vital information to make a systemic improvement.
Karen Martin, Value Stream Mapping: How to Visualize Work and Align Leadership for Organizational Transformation, McGraw-Hill Education; 1st edition (December 16, 2013)
Alex Yakyma, Pursuing Enterprise Outcomes: Maximizing Business Value and Improving Strategy for Organizations and Teams, 2020.
Peter Senge, The Fifth Discipline: The Art & Practice of The Learning Organization, Doubleday; Revised & Updated edition (March 21, 2006)