Where is the Value Stream?

Your organization is a network of value streams. Customers get value from your products and services because work is delivered to them by functioning value streams.

We often think of these value streams in different terms; processes, systems, pipelines, workflows. Why call them value streams if we already have names for what’s happening in the company? Why use a common term at all?

The value in the term value stream is the clarity embedded within it. Value is defined by customers, therefore you can’t think about value streams without considering customers. Streams require flow by their very nature, so flow has to be a primary consideration. Processes, systems, pipelines, and workflows can all be considered without a connection to customers, outcomes, or value. Whenever possible, it helps to use language that speaks to the most important aspect of what it represents, and lowers the odds of misunderstanding. So, despite value streams being historically associated with manufacturing physical products, it’s still an excellent term to describe continuous delivery of value to customers.

The hint is in the quote at the top. Identifying the customer identifies the stream. We can work backwards from any customer to identify a value stream by asking:

By working backwards from delivered value, we can identify the activities that contribute to the creation and delivery of value all the way back to the first.

We can then visualize a network of value streams by tracing each stream to other streams it depends on. Program management depends on budget, so as a customer of the financial approval stream, we can see the two streams connect. Finance depends on sales activity, so they act as an internal customer of sales results, metrics and projections.

By treating our organizations as value stream networks, we can begin to understand the systematic effects of upstream and downstream changes, holistic flow, and the interdependence of every contribution to value delivery. In short, the organization becomes an interconnected web of value delivery, where everyone must play their part to maximize performance. Luckily, with the advent of sophisticated value stream management technology we can begin to see this network, and improve it.