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12 Value Flywheel Tenets that join business and technology goals

We have created 12 Value Flywheel Tenets that join business and technology goals and create a flywheel effect momentum. These 12 tenets form the basis of our book The Value Flywheel Effect.

The Value Flywheel Effect, enabled by cloud adoption, will accelerate your business. Each phase of the Value Flywheel has three fundamental tenets (twelve in total). These tenets will help guide you through the four stages of the Value Flywheel.

That said, it’s essential to understand that we constantly evolve—these tenets may not hold in a few years. For that reason, we will also illustrate them using Wardley Maps. You should map your context and adapt these principles to work in your environment.

We’ve also broken these tenets down based on personas or the role in an organization that would be most concerned with each phase of the Value Flywheel. The persona listed for each section is not the sole owner of these tenets but the individual who would sleep easy if you followed the three tenets.

12 Key Tenets of the Value Flywheel

Clarity of Purpose (Persona: CEO)

  1. Clarity of purpose: A data-informed north star.
  2. Obsess over your time to value: Innovation is a lagging metric.
  3. Map the market: Can you differentiate in the market?

Challenge & Landscape (Persona: Engineers)

  1. Psychological safety: Team-first environments always win.
  2. The system is the asset: A sociotechnical systems view.
  3. Map the org for enablement: Enable empowered engineers.

Next Best Action (Persona: Product Leaders)

  1. Code is a liability: A serverless-first mindset delivers value.
  2. Frictionless developer experience: An easy path to production.
  3. Map your solution: Align on how you will serve customers.

Long-Term Value (Persona: CTO)

  1. A problem-prevention culture: Well-architected and engineered systems.
  2. Keep a low carbon footprint: Sustainability.
  3. Map the emerging value: Next-generation companies can see ahead.

12 Key Tenets in Detail

Phase 1: Clarity of Purpose

From a company perspective, the CEO is the individual we can use as the persona most concerned with the first three tenets. Though these tenets affect everyone in the organization, the CEO has the company’s interest in meeting these three tenets.

Clarity of purpose is the number one job of the CEO. The company must have a vision and not just a few words written on the wall. ‘Clarity of purpose’ can be tested by creating a North Star–model using the North Star Framework from Amplitude. Ideally, the north star is a lagging metric (one that takes a long time to measure), and you should be able to identify the leading metrics (actions that lead to an outcome) and the effort that will drive its success.

Many CEOs demand innovation, often leading to innovation theater and little actual innovation. If the CEO tracks time to value instead—reducing the time taken from “idea conception” to “value in the hands of customers”—then innovation will happen. Innovation is a lagging metric. Rather than focusing on the nebulous idea of innovation, improve the leading metrics you can control. 

Related to the clarity of purpose is the intellectual property of the organization. Is there clarity regarding the market you are operating in? Performing a Wardley Map on your value chain will help distinguish your differentiators and enablers. 

Phase 2: Challenge & Landscape

The software engineer in an organization focuses on a different set of tenets than the CEO. The engineer’s responsibility is to build well, so there are specific tenets that will help set them on the right path.

Psychological safety is critical here, as it is the foundation for an environment that fosters success. Engineering requires collaboration, challenge, vulnerability, calculated risk-taking, and skill. A highly charged political environment will negatively impact the team’s success. Alternatively, a team-first climate, like in many sports, will lead to better results and engagement. 

Often, engineers will obsess with the code while non-engineers will consider the people. However, the people who interact with technology are the key contributors to any software system. It is this combination and interrelationship between the socio (the people) and the technology that is of vital importance. Engineers can make huge impacts if the sociotechnical system is valued and understood. If it is not, inertia will slow down your flywheel. 

The top issue for engineering teams is often friction. Decision-makers in a business usually try to govern and ensure compliance by restricting teams. Wardley Mapping the engineering environment shows that certain functions are in the wrong phase. This map can be a valuable source of continuous improvement that will enable instead of frustrate engineering teams. 

Phase 3: Next Best Action

There are many flavors of business or product roles, but they should all represent customer value. For the third phase of the Value Flywheel Effect, the product leader, who represents the customer, is the driver. They ask the question: How can we optimize for maximum customer value? It’s essential to recognize the depth of the product discipline and the many vital techniques available. In The Value Flywheel Effect, we’ll focus on speed—deciding what to build is another set of books!

One of the biggest misunderstandings in software is the value of code. But code is a liability, as we’ll say repeatedly in this book. The more code we write, the more complexity and risk we generate for ourselves. In the modern cloud, it’s crucial to offload as many capabilities to the provider as possible. Less code allows teams to move faster. Taking advantage of serverless is the most apparent ‘next best action’ for many modern organizations. 

When teams release new features, there must be a frictionless developer experience. Organizations must make it easy for the engineers to make changes quickly and, safely, securely to deliver value for the business and keep the flywheel moving. Automation is a crucial enabler in reducing developer friction. 

To embrace a serverless-first mindset (offloading infrastructure management to the cloud), it’s a valuable exercise to Wardley Map the existing technology stack with engineers. With this map, it will quickly become clear which components either slow the team down, generate little value, or are quickly replaced by a cloud service. 

Phase 4: Long-Term Value

The final persona driving the Value Flywheel Effect is the CTO (chief technology officer or similar), who represents the system’s architecture. Often misunderstood, the system’s architecture should support future changes, reduce risk, and meet the business needs. Like security, good architecture usually results in bad things not happening, which is often difficult to measure. And good architecture leads to sustainable, long-term value versus short-term gains.

Many organizations reward teams for fixing problems. An alternative model should be to create a culture of preventing problems: reward the groups that use well-architected and robust engineering practices to prevent issues from ever occurring and lead to more reliable systems in the long term. 

Good architecture is often hard to define and measure; therefore, efficiency can be a substantial measure here. Efficiency can also be sustainable. Cloud providers are starting to measure the amount of carbon burned in a specific workload or system. If a team can reduce carbon burn, they benefit the customer, the company, and the environment.

A crucial role of architecture is looking ahead and anticipating change. One thing in technology that is certain is there will be an evolution of capability. Wardley Mapping provides the perfect mechanism to map how critical capabilities in your value chain will evolve and what emerging capabilities or needs will surface. Once mapped, you start preparing for evolution today instead of waiting for the future to hit you in the face. 

Read more about the Value Flywheel in the book by David Anderson, Michael O’Reilly, and Mark McCann (The Value Flywheel Effect)

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