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Introduction to The Value Flywheel Effect


Regular readers will know about the book we have written called ‘The Value Flywheel Effect‘. Which is getting published by IT Revolution Press on 29 November. We thought it might be worth having a chat about the contents of the book. The book is based on the concept called the value flywheel. And the value flywheel effect is something we have painfully discovered over many years of working!

Introduction to The Value Flywheel Effect

The Value Flywheel Effect Concept

Things really start to work well, when you join the business and technology strategy. We came up with this model to describe how you do that in a company. Jim Collins also has the idea of the flywheel effect. But we started to notice this happening within the concept of value. Are we clear on the value of our work? There’s a marriage between those two things. What do you think of the concept of the value flywheel?

Mark McCann
I think it works well. It captures what we’ve been struggling to articulate over the last 10 to 15 years of our careers. There are things that you need to put in place, techniques you need to leverage and the right mindset for value. We’ve been iterating and evolving this concept. This distils down and captures all the things we’ve been working on. I think it’s a great diagram and distillation of what we have been holding dear for quite some time.

Mike O’Reilly
It’s a difficult concept to illustrate and describe. We have distilled down to the flywheel. It’s incremental, so you continuously go around the flywheel to build up momentum. To move faster and more efficiently to wherever it is you’re trying to go.

Dave Anderson
I was asked why is it a flywheel and not a linear thing? It’s because you keep going around it. So it’s not that you spend one year going around it, and then you’re done. You continually go around it. Because when you go around it once, it will change.

Photo by Christian Bass on Unsplash.com

The four phases of the Value Flywheel

For anyone listening in, there are four phases.

The value flywheel effect is intentional, because the flywheel builds momentum as things go faster. Phase one is ‘clarity of purpose’, Phase two is ‘challenge’, Phase three is ‘next best action’. And phase four is ‘long term value’. So we will deep dive into these in our next set of episodes. But for now, we will quickly go through them.

1. Clarity of Purpose

So the first phase is ‘clarity of purpose’. Let’s talk about getting this work done in a company. How would you describe ‘clarity of purpose’?

Mike O’Reilly
One thing most organisations don’t have problem with is enthusiasm. As in what they’ve been doing, what they could be doing and what is the right thing to be doing. Clarity of purpose is a very difficult thing to to establish. Business and IT need to look at ‘what is our mission’? What is it? How can we add value? What is it we want to do? There’s lots of different ways to establish clarity of purpose. Does everybody understand it? Has everyone bought into it? I think the first phase is super important. In your organisations, how do you prioritise, how do you make a decision on what you should do over something else? How do we establish that clarity of purpose?

Mark McCann
It’s about getting alignment as well. And trying to clarify what your clarity of purpose is. Or what your Northstar is. And what your key input metrics are. They are valuable conversations to have. They won’y be perfect, but they spark off good thoughts and conversations with people on teams. And it doesn’t need to be perfect. It just needs to start getting alignment and people pointing in the right direction together.

Your purpose is not to write code

Dave Anderson
There are two interesting things to consider. It’s not what your boss says!, Your boss should explain what the clarity purpose is, but they may not. So don’t blindly follow what your boss says. And then the second thing that it is interesting for an engineer or developer, is that your purpose is not to write code! You don’t come to work to write code. You come to work to achieve clarity of purpose for the team and the company. And you may do that, by writing code. But writing code is not your job. Writing code is what your company or team does. It’s quite a subtle thing. But we’ve met developers in the past who feel happy and productive when they are writing code. But that’s not why they are here.

Mark McCann
The goal for an engineer, leader or manager is the know what they are you working on. How does it align to the value you’re delivering for the company? How does it align to the company mission? And how does it deliver an impact? Just answering those questions is a worthwhile endeavour for any individual or team. To understand if the things you’re doing have an impact or not.

2. Challenge

Dave Anderson
The second phase, challenge, sits well with that. These first two are very much linked to the business strategy. And challenge is not to argue with the clarity of purpose. Once you’re clear on the clarity of purpose, it’s then what do we do to achieve that? That’s when you need a healthy environment. Where there’s challenge. Not have a fight with someone. It’s challenge, to think and challenge the ideas.

Mike O’Reilly
It’s a form of verification. We’ve decided the priorities and these are things that we’re talking around. But what’s the what’s the best way to go about it? Let’s have a conversation around that. Look at the landscape and evaluate our position. Are we being realistic? Good conversation and rationale go into this phase. Which is super important.

Mark McCann
Do we have an environment that invites challenge? You need to make sure that socio technical systems are set up. And challenge is invited and not punished.

Mike O’Reilly
It’s a diversity thing. Are people getting a chance to challenge? Are we bringing in the experts? Who should we be talking to? Where’s their voices?

Dave Anderson
That’s where Wardley Mapping is a powerful technique, because you’re challenging the idea and not the person. You’re not challenging the individual telling the story, you’re challenging the approach. It’s healthy and it promotes psychological safety.

3. Next best action

The third phase is next best action. And this is having a bias for action. What can you do quickly, to prove your direction. This is where serverless comes in. And it is getting more technical.

Mark McCann
It’s the rate of turm. How quickly can you make change? And how quickly can you get change into the hands of real users and customers? Or how quickly can you have an impact?

Mike O’Reilly
Sometimes you have good priorities, you’ve challenged and you know what you want to do. But then it can get locked up in technical bureaucracy. What is the quickest path to getting something in front of a customer? Are we being efficient and effective. We’ve recorded podcasts on why we’re big fans of the serverless paradigm. How do we get there? What’s the next best thing we can do to actually action what we’ve talked about in relation to challenge and clarity purpose.

Mark McCann
It’s removing those impediments to fast flow. Can we quickly get an idea into the hands of real users to get valid feedback. What are the blockers? And what can we do to improve that? Or what can we do to remove those inertia barriers?

Mike O’Reilly
This will drive a lot of transformation within organisations. When you add in DORA and deploying quickly, you’ve got to make changes and embrace modern cloud and serverless. It’s a very important phase for the organisation to embrace. We got into it in the book, which is great.

Dave Anderson
The cloud part to this is massive. If you’ve got an urgent business problem, you don’t want to be off doing low level stuff. You’re never going to get to it. So how can you make progress? Well not quickly!

4. Long term value

The fourth phase is long term value. It’s about bringing in architectural and sustainability standards. How can you make sure you’re not building poor quality product? Which will not last for the business.

Mark McCann
It’s so critical. How can you go fast without burdening yourself with lots of technical debt? And how can you go fast and at a sustainable pace? Or how can you deliver a well architected solution? With capabilities that enable the flywheel to turn faster. And it doesn’t clog everying up and slow you down.

Dave Anderson
Once you get to that, you’re back into clarity of purpose again. And it keeps going.

The Value Flywheel Effect is Continuous Improvement

What we’ve found by going through these phases, is that each time you get better at them. You keep revisiting and you keep improving. So there’s a constant evolutionary improvement. Continuous improvement.

Mark McCann
On that theme, as you turn the flywheel, you create more space for innovation and emerging value. As you are putting building blocks in place and getting the flywheel to turn, you will start to spot where you should invest next. What is the next best action? Or what is the right thing to do for long term value. It becomes becomes a good muscle that you can exercise.

Dave Anderson
It’s also healthy that we continue to talk about these things, as you bring this to life in your company. So you’re not shifting the goalposts, etc.

Mike O’Reilly
I love the making space for innovation concept. Most well run and mature organisations in this space are good at that. They have this sort of process and the flywheel creates that.

Dave Anderson
That’s the craic. And that’s our introuction to the value flywheel. We are going through each of those phases in more detail in future episodes. Follow us on @ServerlessEdge on Twitter and at TheServerlessEdge.com for more updates. Thanks for listening and watching. Bye!

Transcribed by https://otter.ai

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