Value Stream or Organizational Structure?

Value Stream or Organizational Structure?

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It’s a bit of a chicken and egg problem. Which comes first when transitioning to agile ways of working? Do you re-organize or restructure your organization first – setting teams and roles up for more agile execution? Or do you align your product, application, and workflows into value streams to feed to your teams? What a conundrum.

Ten years ago, I saw most organizations leaning into organizational changes and not putting much thought into the value streams their teams would be working on.

Now it’s flipped a bit, and there’s a strong focus on value streams, probably influenced by SAFe, amongst many factors. And then, the executing organization is composed as an afterthought.

Matthias Orgler had a take in this LinkedIn post that you should focus on Value Streams first over Organizational structure.

Too many agile transformations start with rearranging teams, picking POs and SMs, creating tribes or trains … without ever pausing to look at how value flows through their company.

The “color by numbers” approach seems to be pretty dominant: You pick a framework and then fill-in all the roles and organizational structures it provides.

But this is NOT how these frameworks were meant to be used.

The whole point of your organizational structure is to support creating value for your customers. Simply making the project managers scrum masters and shuffling the teams will not achieve much.

Look at the value streams first.

How do we create value for our customers? Which steps are necessary (hint: probably not just development)?

Then arrange people around these value streams.

Skipping analyzing your flow of value is a bad reflex. It can lead to inefficient org structures, useless meetings and even a dreadful loop of rearranging teams.

Agility focuses on value. Agile transformations must focus on the flow of value first.

What do you think?

When I saw Mathias’ post, I first thought it’s not a one-or-the-other decision but should be more of a both-in-parallel focus.

And as I read some of the comments, this view seemed to emerge from the readers and Mathias himself. Read the comments between Matthew Skelton, Mark McKeefry, and Matthias. From my perspective, they’re right on and pure gold.

So, to wrap things up, the short answer is—

  • You must do both simultaneously, understanding that they are complex and interrelated.

  • Understand that the organizational structure will iterate, so don’t try to get it perfect at the beginning.

  • And I’d argue the views on value streams will also vary.

Focusing on one or the other is a mistake. It might feel better and allow for a myopic focus, but it’s not the best way forward.

Great discussion thread, Matthias.

Stay agile my friends,

Bob.

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