Dave and Mark spoke at The DevOps Enterprise Summit (US 2021). Their talk is titled ‘Using Wardley Mapping with the Value Flywheel for combined business & technology evolution’.
The video and slides are free to download from IT Revolutions Video Library.
Introduction to Wardley Mapping with the Value Flywheel Talk
In anticipation of ‘The Value Flywheel Effect’ book launch with IT Revolution, let’s discuss how using Wardley Mapping can help you quickly modernise your cloud applications and drive your business. In this talk, co-authors David Anderson and Mark McCann explore how the elements of the value flywheel can start you on your journey toward a serverless-first organisation. Learn how to:
- build a sense of purpose,
- challenge your landscape,
- execute the next best action, and
- create long-term value.
Wardley Mapping is used throughout this entire process to make strategy real, and pragmatic and build maximum situational awareness.
Using Wardley Mapping with the Value Flywheel
Today we’d like to talk to you about “Using Wardley Mapping with the Value Flywheel for combined business & technology evolution”. We believe, despite all the change that has happened, there is still a wave of transformation on the way for many organisations.
Specifically, we are going introduce something we call the flywheel effect.
At The Serverless Edge, we have a keen interest in Wardley Mapping, Serverless, and Product. We have been building a body of content around The Serverless Edge over the past year. And we have a book called ‘The Value Flywheel Effect’ published with IT Revolution Press. Together, we have extensive experience in building systems and driving change.
Serverless-first represents an evolution into a new way of working more companies will start to use cloud technology to reduce their time to value and really drive business results.
What is a value flywheel?
The flywheel effect is a phrase from Jim Collins’s book Good to Great, but it is a very accurate description of what we are observing.
But before we launch into it, let’s explain what a flywheel is. There are maybe one or two of you that need a refresher in 19th-century engineering! When power is inconsistent, a flywheel is used to absorb the energy and evenly distribute it in order to drive smoothly.
We believe that both business and technology drivers should merge together, but something is required for smooth progress – a flywheel! The last thing you want is business and technology energy canceling each other out. We want to help your organisation get its flywheel turning, build momentum in the right direction, identify and remove friction, improve your organisation’s time to value, and ultimately deliver sustainable results.
The flip side of this, which is what we see a lot, is Dev vs Ops silos, Tech vs Product silos, unclear purpose, poor tech decisions, and short-term thinking – all of which build tech, business, and organisational debt. This clogs up the flywheel.
Reducing time to value
Sounds complicated, but over our careers, we have seen many companies reduce their time to value, get their flywheel turning effectively, and build for long-term success. Companies like:
- Liberty Mutual,
- Workgrid Software,
- A Cloud Guru,
- Microsoft, and
- lots of startups, have figured this out… have your company?
I think many companies don’t know this flywheel exists and are caught in the ‘Build Trap’ and don’t know the ‘Time to Value’. And by the way, Escaping the Build Trap is a brilliant book by Melissa Perri.
What is a Value Flywheel?
We believe that creating and visualising a value flywheel is critical in today’s business landscape. We also believe that Wardley Mapping is one of the best techniques to help you navigate through change. So we will talk you through this model.
But before that, it’s important to point out. This is neither highbrow strategy or operational efficiency. This is about having a bias for action aligned with pragmatic ways of working.
The 4 Phases of the Value Flywheel
The wheel is designed to spin many times, so don’t feel you need to do everything in phase 2 before moving to phase 3. Momentum and bias for action is more important than anything.
- Phase 1 is about Purpose. It sounds easy, but do you know what you are trying to do? As a team, as a department, and as an organisation? Do you know what is valuable?
- Phase 2 covers Challenge. Have you created the right environment to discuss where you need to get to and challenge the thinking until it’s good enough?
- Phase 3 is the Next Best Action. Don’t gold-plate or build things you don’t need to. With focus, you can get results quicker than you think.
- Phase 4 is about building for Long Term Value. There will be opportunities in the future, don’t close them off because knee-jerk decisions today slow you down later.
In the past, we have thought about these elements as building blocks, but it didn’t convey the need for movement, the bias for action that is critical for success.
Phase 1 of the Value Flywheel: Purpose
Clarity of Purpose is critical for alignment on vision and strategy and helps your teams work in an understandable, impactful, meaningful, and measurable way.
Having a clearly understood North Star helps ensure that everyone in your org knows how the work they are doing every day impacts the goals, KPI, and results of your business.
This is critical for every other element of the flywheel as we use the North Star to challenge every action we take. Does this action move us closer to realising our North Star?
Understanding your ‘time to value’ is critical. Work to understand how long a change takes to reach a real user…then make the feedback loop observable to proactively drive business outcomes.
Wardley Map to gain situational awareness of the competitive environment at the Market level to improve your overall chances of success. There is no point in having a high-performing organisation pursuing the wrong strategy or goals.
Phase 2 of the Value Flywheel: Challenge
The next stage is about Challenges and creating an environment that invites and welcomes challenges.
This is about understanding the landscape and creating the right environment so the people and the teams closest to the problems have the right support, tools, training, autonomy, and context to make the best possible decisions.
If you are going to execute effectively, you don’t want to be tripping up over yourself. Enable your people to evolve the system with a ‘Human Centric’ approach.
Establish ‘Psychological Safety’ – trust, clarity of purpose, an environment to execute and a rapid feedback loop are critical to your team’s success.
Combine ‘Sociotechnical’, ‘Problem Prevention’, and ‘Time to Value’ elements to bring cohesion, resilience, and sustainability to your systems.
Map to gain an understanding of the capabilities of your organisation, to help you make them fit for purpose and ready for the challenges you will face.
Phase 3 of the Value Flywheel: Next Best Action
This is where bias for action comes in.
The next right action will short-circuit any traditional strategic framework with a simple question. What can we do now for rapid impact? How can we make quick, iterative decisions aligned to our purpose and north star?
We believe a ‘Serverless First’ mindset and approach enables your teams to focus on the Business Outcome while keeping their code, security, and cost liabilities low.
Removing Developer Friction is a massive enabler for your organisation – consistently identifying and removing impediments is the most effective path to high performance. The goal is fast flow efficiency from idea to user value.
Mapping your Solution is a great way to understand your Tech Stack, opportunities for evolution, and impediments to flow, which help inform your Next Best Action.
Phase 4 of the Value Flywheel: Long-Term Value
Finally, we need to consider Long Term Value.
We will never be finished, but we need to know what good looks like and what to aim for.
A Problem Prevention culture means rewarding teams for avoiding failure, not fixing issues, and means continuously investing in delivering a Well-Architected Solution that embraces engineering excellence.
Aim for sustainability in all things – low carbon products and services, a sustainable pace for your people, and ultimately long-term sustainable business success.
Use appropriate Abstractions- yesterday ‘Infrastructure as a Service’, today Serverless and tomorrow a new higher abstraction. Use the flywheel to constantly evolve, keep your organisation moving, and keep your strategic efficiency high.
Map to identify new opportunities, new emerging areas of value to pursue, new threats to counter, areas to extract out of, and new points of evolution to take advantage of for long-term success.
The Value Flywheel in action
Now that we have covered the steady flywheel, we think it’s worth showing how this works.
We’ve mentioned Wardley Maps a few times (here follows an example of how to produce a Wardley Map). The evolutionary axis is important, as most components will eventually move from left to right, as time advances.
The best illustration of this axis is computers and companies. In the 1950s, having a computer was novel and new (stage one). By the 1970s, companies built their own and got ahead (stage two). In the 1990s, you could buy them anywhere and there was a boom (stage three). Now, (in stage four), they are commodities – we rent them as a utility, now called Cloud.
The 4 Stages of the Steady Value Flywheel
- Stage one is Genesis – the component that lives here is rare and poorly understood. It has a future value, but an uncertain path. The user thinks of this as exciting and surprising – we treat it with wonder!
- Stage two is Custom-built – we know how to build the component here and are starting to learn about it. It’s in a forming market and we are learning how to make money from it. It’s leading edge and if you have it, you are doing well.
- Stage three is Product or rental – things are starting to heat up. It’s a growing market and competitive. These things are highly profitable and they need to be fit for purpose as consumption is wide. We listen to our customers and make these things better, so people will buy more.
- Stage four, the final stage is Commodity or utility – the component is widely used and in a mature market. Having this is just the cost of doing business and everyone understands it. There is little profit to be made and a company needs to mass produce these for big profits.
Wardley Mapping a Conference
We’ve taken a simple example to start with, a business. Let’s say you are a company running a conference – a topic that we are all pretty familiar with.
The first step with mapping is to sketch out a simple value chain.
We always start with the customer, who acts as the anchor. Always start with the customer’s need.
The Customer, or attendee, has a need for knowledge. Knowledge has a dependency on a conference.
This is a pretty simple value chain, but always best to start simple.
Phase 1 – Purpose
For the first phase of the flywheel (which is the purpose), we’ll place that value chain into a Wardley Map axis.
The Attendee is the anchor for the map. The y-axis here represents visibility. Components that are higher up are visible to the customer. Things that are lower down are less visible. Obviously, the attendee cares less about things that they can’t see.
Along the bottom here is the x-axis which is the evolution axis, this is very important. There are four stages here from left to right. Every component is placed inside one of these stages.
The beauty of Wardley Maps is that components can move, usually from left to right. They evolve towards commodity or they become more industrialised. What does that mean? Quite simply, if there is an advantage to be gained from making something better, then it will move to from genesis through to commodity.
Moving from Genesis to Commodity
Speaking of movement, we placed the conference to the left of the product as a physical conference has a lot of unique and specific factors. With the disruption that COVID brought, it has quickly moved to the right to become more industrialised as a virtual conference. Interestingly, the customer need, the knowledge has not changed, just the underlying mechanism.
This is a very real problem and one that you are all very aware of – especially as the impact of covid meant conferences had to go online. We may still need the knowledge that a conference can provide, but how many of you could or would travel to a real conference halfway around the world?
We don’t know the answer to that, but I bet there are lots at virtual events who may not have travelled to that conference.
Phase 2 – Challenge
This is an interesting phase as you start to make some assumptions. We accept that virtual conference is a commodity and create a dependency on Platform.
If we decided to Custom-Build that platform, it would be way over to the left, but it’s not very visible to the user. At this point, we test the psychological safety and appetite for challenge. The map should facilitate a healthy debate on that decision. It may even require a sub-map. But it’s a rabbit hole that we refuse to go deep into.
When you take the next step, any platform will need enhanced Audio-Visual skills to give the content polish. This is a much better investment than custom-building YouTube. This could be described as a comparable advantage with a much better return of investment.
We have been in this position many times. Without a map, the platform discussion could literally go on for years. The map allows the room to pause that decision and move forward in time to what’s next. Eventually, with a completed map, the platform decision will become obvious – but it takes a day as opposed to three years.
Phase 3 – Next Best Action
We have applied a serverless-first mindset to some of the technical decisions – we will rent, not build. This gives us time to look at the customer, the attendee. With a next-best action approach, we spot there is a new need for Access – real-time and on-demand. Realtime offers improved speaker collaboration with speaker chat. All of this relies on the platform, so let’s start adding real feature needs to that platform and ensure that it’s fit for purpose.
Remember, we are still just mapping here. We have built an accurate picture of what we need and how we will create it.
Our investment has only been a few hours and some conversation.
Phase 4 – Long Term Value
As we are looking at Long Term Value, we can look ahead.
Once this system is in place, maybe we can start getting clever with personalisation and create curated content per attendee. This could open up new collaboration channels and enable things like the co-creation of content, maybe even with speakers. Maybe speakers could use the event to find early adopters of patterns and explore further use cases. Not a primary need, but an example of how we can think ahead.
There are a few things to point out, as we close out.
First of all – there is a template we often use to capture everything on a map.
The value chain starts the conversation and we usually keep it displayed for reference. The map is in the centre, which we’ll come back to. As we map, we will identify climatic patterns that affect this domain – these are things that are happening in the industry, regardless of this customer or company. Finally observation in this map are listed – this is just a few annotations for what we can see in the map. It creates a narrative of the map to help people understand.
The Climatic patterns for this map are :
- COVID accelerates change – this move was happening, but it really sped up.
- Raised expectation of Premium Content – people will not sit at home and watch average content – time and work-life balance are important.
- Barriers to entry have lowered. There are people attending the virtual event who may not have flown to Vegas.
- Isolation drives the need for more & different connections. It’s harder to connect when we are remote, so there is a new need appearing.
- The risk from Cyber-threats has grown – one bad attack and your event is destroyed.
Observations in Wardley Maps
Finally, the observations are numbers one to three.
- Increased Attendee-Speaker interaction – the virtual platform has created a new value proposition. Speaker-to-attendee interaction is easier.
- Well-Architected practice helps problem prevention. Failure is not an option, so the platform needs to be very robust. Don’t custom-build it for a few extra features, play it safe and rent from a market leader.
- “Need for Knowledge” evolves to “join the community”. We always had a small portion of returning conference attendees that would think of the event as a community, but now this can be expanded and the community can be much more diverse and inclusive – this is a big selling point.
Stepping Stones and Wardley Mapping
Simon Wardley says “The idea of future possibilities through stepping stones is an important concept within strategy”.
Strategy is not drawing a picture in January and forgetting about it. Strategy is not deciding what to do every second Friday. The flywheel shows a pattern of interaction and enables the team to map out the journey while executing. You get alignment and challenge in the room, and if the map is wrong, just change it.
The map represents a conversation, but it uncovers value and highlights blockers.
So, that is the flywheel effect – I hope that made sense and raised a few questions. The whole point of the flywheel is to map out this journey. The map shows the way and you should use a bias for action to test the assumptions. We believe that a version of this value flywheel exists in every company, but many can’t see it and therefore can’t get it turning. Wardley Mapping is the key technique for building insight AND we have talked about the importance of the next best action and tracking your time to value. All of this and more is covered in the book and blog – The Serverless Edge.
This has been a taster of the content in our book which will be released by IT Revolution next year.
We have case studies of companies that have gotten this model right. And we have lots of advice and illustrations on how this works. We are also producing content on the blog listed here and would really value your feedback.
The wave of transformation still has not hit most companies. Yes, you are migrating to the cloud – but have you thought about how technology will drive your business when you get there?