The Value Flywheel Effect: Power the Future and Accelerate Your Organization in the Modern Cloud will be released in November 2022.
1. Don’t write code without fixing the system
Software engineers are usually hired to build things quickly. But if you fix the system then everyone can build quicker and the business can deliver value sooner. Writing code is important, but improving the system is more important. When we eliminate the burden of something like infrastructure concerns for software developers, it creates room for focus elsewhere, such as developing software assets.
2. Real life serverless transformation stories
Expect real life transformation stories from startups to large global orgs including our own journey at Liberty Mutual. In 2013, we realized that the cloud was not just another datacenter; it could offer a transformational way of working. We sensed a paradigm shift and knew it was time to start exploring. We were following the work of Simon Wardley and his technique, called Wardley Mapping.
Wardley Mapping is a method for building situational awareness in order to map out a potential business strategy. It allowed us to ask questions about how things could evolve, it let us peek into the future and turn hunches into strategies that we could then either test or look for early signs. So, we decided to attempt to map out what we thought could happen with Liberty Mutual’s shift to the cloud.
3. Grasping the AWS Lambda opportunity
AWS Lambda was a significant innovation in cloud technology and provided the opportunity for a huge mindset shift for developers. Previously, organizations in the cloud still had to manage the infrastructure (costing hours and hours of developer time). But with Lambda, there was now the option to leave the infrastructure management to the cloud vendor! This could move the cloud from a product to a commodity the business consumed like electricity. This would give our teams more time to focus on creativity and innovation, including operational constraints, performance constraints, the total cost of the solution, and user experience, instead of just keeping the lights on. Teams starting to write systems rather than simply applications. And there were clear cost savings for the business as well.
4. The beginning of serverless computing
This was the beginning of what came to be known as serverless computing, where companies no longer managed their cloud operations themselves but gave that toil over to the cloud vendors. With this model, an organization could run an application when needed, shut it down when needed, and pay only when it was being used.
We decided to take the plunge and experiment in this new serverless world. Our experiments quickly accelerated our engineering team’s ability to focus on things other than infrastructure management. And the more we experimented in this space, the more we started to see a flywheel effect, small wins accumulating over time to drive momentum. We were delivering more value into the hand of our business partners faster.
5. Mapping our value flywheel
We tried to map out what we were experiencing. First, we had a clear purpose (Phase 1). Next, we had the right environment in which to thrive (Phase 2). And serverless-first architecture provided us with the next best action (Phase 3) we could take to create long-term value (Phase 4) for our organization.We deployed this same pattern many times, spinning the flywheel again and again, creating more and more momentum and less and less inertia, and the success was evident. Engineers were moving faster, creating lower-cost solutions and more innovative approaches with a better connection between technology and the business.
And, the business metrics delivered became simply unbelievable: 95%+ runtime cost-savings, new functionality delivered months ahead of schedule, global rollout in weeks instead of years, innovative features leading the market and deploying multiple times a day.
6. The birth of the Serverless First Organization Strategy
By this time, we had been evolving our methods and practices for ten years, so we decided to encapsulate them in a set of principles we referred to as the “Serverless First Organization Strategy.” The running joke I had with the tech leads was that it was impossible to measure if the principle was true, but blindingly obvious when it was not! We tried to paint a picture of our ideal software development team A high-performing, serverless-first team will:
- chase a business outcome (KPI)
- be secure by design
- keep high throughput of work
- reliably run a high stability system
- rent/reuse with build as the final option
- continuously optimize the total cost
- build event-driven via strong APIs
- build solutions that fit in their heads
7. The need for IT and business to unite
The inherent need for IT and the business to unite has been accelerating at breakneck speed for more than a decade, fueled by advances in technology and drastic changes in the way people work. In fact, many have dubbed this the Fourth Industrial Revolution. According to the World Economic Forum, “the speed of current breakthroughs has no historical precedent…evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.”
It is irresponsible for modern organizations to ignore or waste the potential that effective technology brings to the business, in particular, the power and potential of serverless and the modern cloud—both represent software in its purest form, without hardware. Executives must learn to harness today’s technology to drive innovation and power change. They must challenge their own assumptions, continuously innovate, and adapt to their changing environment.
8. Embrace a deeper mindset
The question every business leader must ask themselves is this: Is technology really driving your business? There is a significant culture change required to truly achieve this. Just lifting and shifting into the cloud will only give you a nicer datacenter. Simply writing more code only increases your organization’s liability, it doesn’t guarantee you’ll win in the marketplace. You won’t really be benefitting from what these technologies have to offer your business unless you embrace a deeper mindset shift.
The organizations that recognize this will create a space for innovation. Small successes will breed larger success and spread through the organization like wildfire. This power and momentum will increase, and the path forward will become smoother.
9. The Value Flywheel Effect
This is the Value Flywheel Effect, when the business and technology strategies power and drive each other, turning the organization into a sense-making machine with the ability to easily pivot to the challenges of today and to whatever the next great transformation will be.
Organizations that achieve true alignment between the business and technology will find themselves riding this wave of continuous momentum that the Value Flywheel Effect affords them. To achieve continuous momentum means to be in the lead, to break new boundaries. In the mechanical world, when a power source is inconsistent, a flywheel is used to absorb energy and evenly distribute it so the machine runs smoothly. I believe that both business and technology drivers must merge in this same way to ensure smooth progress forward.
The Value Flywheel Effect exists in every organization, but it will turn very slowly if you lock all your engineers in the basement and demand that they crank out code. There is a better way. I have seen it, experienced it, and now I am sharing it with all of you.