September 2015 was the last time that seven of the top ten firms by market value were not information technology firms. Fast forward less than two years, to June 2017 and seven of the top ten firms are IT firms. By June 2018, General Electric, the last remaining original constituent of the Dow Jones index, created in 1896, was removed from the index, a sign of the moving tectonic plates.
Only two years later, by mid 2020, accelerated by a global pandemic, it’s not seven firms in any position in the top ten which are IT firms, it’s the top seven most valuable firms in the world. At the time of writing, only one firm remains in the Dow which joined prior to the invention of the microprocessor and half of the Dow constituents have been in the index for 15 years or less.
Clearly, with the latest technology-led revolution, we have tipped from one Age to another. We have gone from the Age of Oil and Mass Production where work was mostly repetitive and knowable to the Age of Digital where work is mostly unique, emergent and unknowable. Like going from the Stone Age to the Bronze Age, there is a new means of production, which creates new expectations. In order to survive and thrive, there is a need to adopt ways of working suited to the new means of production. In the Age of Digital every company is a software company directly or indirectly, and there are few cases where value delivery does not in some way involve Information Technology.
Better Value Sooner Safer Happier (BVSSH) is an outcome oriented approach to continuously improve ways of working. It is a pattern for improving business outcomes, as firms pivot from ways of working dating back two technology revolutions ago, to ways of working suited to the nature of work in the Age of Digital. The antipattern is inflicting a capital ‘A’, capital ‘T’, Agile Transformation. Agile is one of many possible ‘means to an end’, along with Lean, DevOps, Cloud and more, however it is not the ‘end’ itself. Organisations can be ‘doing Agile’ and not seeing an improvement in business outcomes. The eye is on the wrong ball. Instead, focus on a positive trend on the outcomes, and use agile, lean, DevOps, systems thinking, design thinking, theory of constraints and so on as figurative tools in the toolbox, suited to your context. Every organization is unique and is a complex adaptive system, there is no one size fits all approach.
Better is quality. Quality is built in rather than inspected in later. With smaller slices of value and multidisciplinary teams, changes are within a team’s cognitive load (that is, complexity that fits in your head) and there is a limited “impact radius.” There are fewer incidents and outages. There is less rework, less failure demand. More time is spent proactively rather than reactively.
Value is unique; it’s why you are doing what you are doing. It is of value to someone. It could be financial; it could be maintaining public safety; it could be charitable. As the future is not knowable, value is articulated via outcome hypotheses with leading and lagging measures. The leading measures acting as an early indicator, an early feedback loop. This enables pivoting and agility in order to maximise the outcome or have the cheapest cost of failure.
Sooner is time to market, time to learning, to pivoting, to de-risking, to avoiding a “sunk cost fallacy,” to locking in progress and value early and often. There are three key measures.
- Lead Time is the time from starting work on an item of value to getting it into the hands of a customer.
- Throughput is the count of items of value delivered into the hands of a customer in a given time period. As lead time comes down, throughput should go up.
- Flow Efficiency is the percentage of time that work is actively being worked on during its elapsed end-to-end lead time, as opposed to waiting to be worked on. For most large service-based organizations, flow efficiency is typically 10% or lower. This means that work is waiting at least 90% of the time. This is where significant gains can be made. Focus on where the work isn’t, not where the work is.
Safer is Governance, Risk, and Compliance (GRC), information security, data privacy, regulatory compliance and resilience in chaos, be that a cyber-attack or a global pandemic. It is customers trusting your organization. It is agile rather than fragile. It is speed and control, not one or the other. It is cultural, keeping the conversation on risk alive. The better the brakes, the faster you can go.
Happier covers customers, colleagues, citizens, and climate, as it is not about “more for less” at any human or climatic cost. It is high levels of customer advocacy and colleague engagement with a positive impact on society and the one planet we live on. It is a more humane way of working, with empowered multidisciplinary teams and high levels of psychological safety, enabling experimentation and improvement.
Together, Better Value Sooner Safer Happier balance each other. If Sooner is achieved by working people harder or cutting corners, the result will be a reduction in Better, Safer and Happier.
With BVSSH measures, it is important to look at the trends over time, the vector metrics, rather than absolute values. What matters is not the absolute difference between teams, rather that teams are continually improving. Improvement trends can be compared across contexts.
BVSSH contains two sets of outcomes. Better Sooner Safer Happier are the how outcomes. They measure the improvement in the system of work. Value is the what, the business outcome hypotheses that the system of work produces. The two sets of outcomes form a virtuous circle.
Improvements in the how leads to improvement in the what due to faster feedback, the ability to pivot, higher quality, and more engaged colleagues and customers. Rather than inflicting one set of practices, focus on BVSSH and empower teams to improve using their own brains, with support, in their unique context. With incentivisation and psychological safety, this will build a new muscle memory, a continuously learning and improving organization.