The Value Flywheel Strategy Applied starting with Phase 1 Clarity of Purpose

We are continuing our series about our book ‘The Value Flywheel Effect, which will be published on 29 November. We’ve been talking about the value flywheel and exploring that model. Last time we spoke about the whole model and the four phases. They are Clarity of Purpose, Challenge and Landscape, Next Best Action and Long Term Value. We talked about them at a high level, in our last episode. So we figured we’d deep dive into the flywheel strategy starting with Clarity of Purpose.

It’s the first phase of the flywheel. So will we give an explanation of what ‘clarity of purpose’ means? What does it mean to you Mark?

Mark McCann
It’s knowing where you are going. And where you want to go next and what your purpose is. Are the things you’re working on meaningful and valuable? Do you understand what that is? I think having a clarity of purposes is critical for for future success. You need to know where you’re going and why you’re going there.

Mike O’Reilly
Yeah, remove the coconut headphones! As we like to say. And really understand the problems we’re solving and why. Having real clarity on why we do the work that we’re doing. And being able to anticipate the impact that you want to have. It’s a huge topic. And it’s a huge challenge for modern organisations to get right.

Mark McCann
There’s a need for everyone to understand why they’re doing the things that they’re doing. Who are your users and what are their needs? What are you doing to meet those needs? We talk about this a lot and we’re well practised in it. But this is the stuff that a lot people and teams don’t ask themselves.

Who is responsible for Purpose and Clarity in your org?

Dave Anderson
The phrase rolls off the tongue. But as an engineer, what’s your clarity purpose? It’s not going to work. Or is it to write code? What is your company’s clarity of purpose? I think there’s an onus on senior leadership and/or the CEO, to make sure this is understood. Purpose is what is your business going after. And clarity is if you are very specific on that? Is it measurable? There’s a lot to unpack in that phrase. So why do you think it’s important?

Mike O’Reilly
It’s important for a number of reasons. One of the hardest things in modern software delivery and digital orbs is prioritisation. How to we know we are working on the right thing. And do we understand the current picture. How can we make sure we’re making the right decisions on the approach we are taking. If we don’t have clarity of purpose, we don’t understand the problem we’re solving or what our users needs are. We can’t make good decisions with regards to the work we carry out. Or where we invest our time or resources to meet those needs. What you’ll find is, if you don’t have it, is that it becomes very difficult.

Mark McCann
It’s critical if you want high performance, autonomous teams. But if they’re not aligned behind the clarity of purpose, they will go in different directions. And they won’t have the impact you think they should have for your organisation. So it’s critical that clarity of purpose is understood and clearly articulated at all levels, from top to bottom.

What happens when you don’t have clarity of purpose or a flywheel strategy?

Dave Anderson
You have got to prioritise decision making, because we don’t have infinite capacity. And alignment to make sure people have the same mindset. I also think of it as an anchor when you’re doing things. Two things I find funny are firstly innovation without clarity of purpose. It is just making stuff up. Because it doesn’t really matter what you do! And secondly, execution without clarity of purpose is just busy work. You are just going but you don’t know when you’re done. It’s really important to be clear on what the outcome is. Before you start ideation and thinking outside the box or before you hit it.

Mark McCann
From a personal point of view, it gives each individual person on a teams, more meaning. It gives them a more purposeful existence. We’re suffering from digital fatigue and burnout. But if you have clarity purposes, the things that you’re doing are meaningful and having an impact. And that makes you happier.

Mike O’Reilly
A key ingredient is being able to pivot. In some companies they’ll build something because someone else built something. And sunken cost fallacy kicks in. Because they have no clarity of purpose, they can’t measure success appropriately. So they tend to invest in something that’s already failed. But knowing when to stop and when to try the next thing is a core rationale for solid clarity on your purpose.

What tools do you need to gain your clarity of purpose and flywheel strategy?

Mark McCann
Situational awareness is critical. Having the data to backup, your purpose with key metrics that you’re driving towards is critical as well. You need to make sure that what you’re doing is influencing the right metrics. And all aligned to your purpose.

Mike O’Reilly
An IT person, you can come up with a million good ideas. But you’ve got to be prepared to say no. This is not going to have any impact. Or this is not going to affect the bottom line. This is not going to manifest as a benefit for what we’re trying to do in relation to our Northstar.

Dave Anderson
Having the data means you can define the Northstar and be very data driven. Northstar is a technique to structure your data, so you’re very clear on what the goal is. And also measuring time to value. If you’re trying to build something, you need to be clear on what the value is. And how long it takes to unlock that. There are specific techniques that help you with clarity of purpose. But what happens if you ignore it? It’s not default or mandatory. You don’t have have to get into it. I remember being asked to stop talking about why we’re doing stuff and just do it. That wasn’t healthy.

It’s about keeping your org healthy

Mark McCann
You’ve answered your own question! Organisations don’t become healthy. They don’t become places where people want to have an impact. Instead they’ll turn up and clock in the hours. But they won’t move the org forward.

Mike O’Reilly
Teams begin to solve the same problems. Because there’s a lack of collaboration and people aren’t communicating effectively. It becomes difficult to prioritise and organise across teams. Which is another side effect. You start to guess at things. And build stuff for the sake of building. And not focus on the overall outcome.

Mark McCann
As engineers, we love nothing more than building cool shiny stuff. If you don’t have purpose and understanding, you continue to build cool shiny stuff without any real valuable impact to the org.

Mike O’Reilly
But to your point, from an innovation perspective, how can an organisation innovate if it’s not clear on its purpose or overall mission?

Is it innovation or innovation theatre?

Dave Anderson
I don’t think you can. We have talked about innovation theatre. Where the execs, all of a sudden, start wearing sandals, sports jackets and no ties! That’s not innovation. It’s innovation theatre when you start putting stickies on the wall instead of using documents. They are the traps you see people fall into when it come to innovation.

Another one is the build trap. When you’ve teams building, like billy oh. Nobody knows why they’re building or what they’re building. But they just have to be ready to by Friday.

And then you have what we call gold plating. You get into a big ball of mud, where engineers went crazy building a complicated system. It’s got duplication and complexity. And then all of a sudden, you need a simplification programme because it’s too complicated. Or you need a reuse programme because you’ve built the same thing four or five times.

A lot of these are common traps. You see them in big companies who have scaled like the crazy. Even in the big tech companies who you think would be organised. They’ve got the same thing 10 different times over.

Mark McCann
You have the metrics and data points. But you’re not making an impact because you’re not aligned to the vision. You don’t have a clarity of purpose.

Dave Anderson
I always think that startups are good at clarity purpose. Well, the ones that survive are. The ones that don’t survive, probably had a bad clarity purpose.

Mark McCann
That’s the final answer to what happens if you don’t have clarity of purpose. Over time you go out of existence?

Mike O’Reilly
Inertia is the word isn’t it?

Dave Anderson
So that’s the craic. That’s phase one of our value flywheel: clarity of purpose. There’s much more in the book. We’ll hit phase two: Challenged in the next episode. Follow us on Twitter @ServerlessEdge, subscribe to Serverless Craic on YouTube. And visit the blog: TheServerlessEdge.com. Thanks very much.

Transcribed by https://otter.ai