How do Flow Economics improve your organisation’s performance?

The Flow of value through your organisation is your competitive advantage

Flow as a concept has been around for many years, since Donald Reinertsen first documented the concept in The Principles of Product Development Flow in 2009, and many new thought leaders added to the methodology, such as Fin Goulding in Flow: A Handbook for Change Makers in 2017, Mik Kersten in Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework in 2018, and more recently Steve Pereira in Flow Engineering: From Value Stream Mapping to Effective Action in 2024.

What benefits have we learned are achievable when employing Flow methodology from these experts and from the people who have successfully applied it?

Optimising for fast flow within an organisation offers several known and proven benefits:

Increased Value Delivery: Optimising for a fast flow of value and constant feedback is depicted as essential for building adaptive socio-technical systems capable of thriving amidst rapid change. Work flows as information through value streams, and particularly in knowledge work, value accrues significantly as it progresses through the stream. This value is only fully realised when work reaches production.

The primary measure of success for a product development organisation is happy customers and the delivery of business value. Fast flow is highlighted as a means to unlock this value substantially earlier in the product lifecycle. It ensures a fast flow where it is most crucial. Organizations aiming to double their speed can achieve this. Learn more about increasing value delivery.

Improved Speed and Throughput: Fast flow is directly tied to the speed at which outcomes are delivered to customers. Reducing the size of work batches is proven to significantly reduce cycle time and improve throughput. Batch size reduction alone can shorten cycle time by an order of magnitude or more without needing extra capacity or utilisation. It enables teams to produce higher quality work much faster. This focus on getting work done more quickly and effectively can accelerate teams. Learn about increasing speed and throughput.

Enhanced Efficiency and Productivity: Flow engineering is specifically designed to address impediments to work that “drain the ability to deliver value”. It targets the elimination of toil and delay. Work accumulating as inventory, such as half-finished requirements or code awaiting deployment, represents a cost; reducing this inventory through faster flow enhances efficiency. The “platform as a product” approach, by providing curated self-service capabilities, aims to unblock internal consumers and reduce their cognitive load, thereby improving their flow. Reducing team cognitive load is seen as unlocking blockers to flow related to ownership and dependencies.

While efficiency of internal processes might be an optimisation goal, the overarching focus should be on the swift flow of value to end customers, even if this means potentially sub-optimising internal processes when they conflict with this higher objective. The core of a product development organisation is to satisfy the customer through early and continuous delivery of valuable software. Learn about reducing Cost of Delay and increasing Return on Investment.

Increased Resilience and Adaptability: Organisations that adopt flow and continuous learning principles demonstrate significant business benefits, including resilience. When teams are accustomed to learning, they can address novel problems or alter the company’s direction without requiring a major restructuring. The combination of practices aims to construct adaptive socio-technical systems that can quickly adjust to new circumstances and flourish in the face of rapid change.

This capacity allows organisations to respond effectively to complex situations involving unknown unknowns and potentially instigate future changes rather than merely reacting to those introduced by others. Adaptive organisational design is key to reacting to market changes without constant reorganisation. Learn about creating Adaptive Portfolios.

Competitive Advantage: Directing development efforts towards core domains that provide a competitive advantage is enabled by optimising for flow and establishing clear boundaries. Analysing flow, possibly using methods like Wardley maps, helps identify areas for investment, innovation, evolution, or outsourcing, thereby contributing to competitive advantage.

Organisations failing to keep pace with component evolution compared to rivals risk falling behind in efficiency and competitive standing. Achieving fast flow can facilitate strategic moves like being the first to commoditise components or forming alliances to speed up evolution, further amplifying competitive advantage. Learn about empowering teams and setting up guardrails for innovation.

Improved Alignment and Shared Understanding: Flow engineering, especially through collaborative mapping activities, assists in building alignment and a shared perspective among various stakeholders. This process helps clarify organisational objectives and value, uniting different viewpoints and targets, and bridging divides between different parts of the organisation.

Team Topologies provides a common language for discussing flow, boundaries, architecture, and dynamics across different groups. Working groups, a tactical approach for tackling flow blockages, implicitly foster organisational culture and empathy by revealing micro-cultures and creating opportunities for collaborative interaction across teams. Platforms can also help bring different parts of the organisation together around the ideas of fast flow. Creating a platform manifesto can help bring people from different areas together and share the same approach. Learn about Supercharging Remote teams.

Boosted Engagement and Motivation: Creating a shared view of value streams and flow through mapping can boost engagement by exciting people about collective goals and progress. Fast flow counters the frustration and disengagement that can arise from being blocked by slow, inefficient processes in other parts of the organisation. Working groups are noted as being engaging and enjoyable, stimulating the exchange of ideas and excitement. They also offer growth opportunities and allow leaders to directly experience on-the-ground frustrations. Mapping also helps participants feel heard and part of building a solution, getting them out of friction and pain. Learn how teams improve predictability when they work in fast flow.

Support for Long-term Stewardship: Optimising for flow supports the objective of building excellent products in a sustainable manner. A focus on continuous stewardship entails looking after services over the long term, necessitating ongoing investment in the health of the codebase and aligning funding and supplier contracts to encourage this. This contrasts with contracts that might separate development, testing, and support, hindering long-term stewardship. Learn about creating domain-aligned teams with long-term accountability.

Better Decision Making: Nearly all decisions within an organisation can benefit from being viewed through the twin lenses of fast flow and team cognitive load, leading to more informed choices. Working groups can empower individuals to articulate necessary changes and make better cross-cutting decisions. Learn how Adaptive Portfolios provide better decision-making.

In summary, optimising for fast flow allows organisations to deliver value to customers more quickly, efficiently, and reliably, while simultaneously building resilience and adaptability to respond to and initiate change, ultimately securing a competitive advantage and enhancing internal alignment and engagement. It provides a foundation of value and clarity that is essential for enabling flow.