Recession and Value Stream Management

Recession and Value Stream Management — Is There a Connection?

In Agile Transformation, ConnectALL, Value Stream Management by Andrew Fuqua

At the 2022 agile conference in Nashville on July 18-22, someone asserted that Value Stream Management (VSM) is more important now that we’re in a recession because companies need to redouble their efforts on efficiency. Then the discussion turned to whether or not we are in a recession. I guess that’s what’s on the mind of many, for good reason.

But I argued against the whole premise of the statement, both that it’s important because of the recession, and that the goal is efficiency.

My position was, and is, that the recession is irrelevant when it comes to value stream management.

  • First, companies need to manage their value streams well, whether they are in a recession or not. Competitors are always striving to improve, to better compete. They’ll eat your lunch if you let them, recession or not. Value stream management is forever.
  • Second, the goal isn’t always ‘efficiency’. Many people think lean is just about efficiency, about eliminating waste. While good for that, the goal of every company is ultimately profit. Companies (should) have goals that they believe will help them achieve the profit goal. Value streams should be managed toward those goals. Those goals might be related to innovation, competitive positioning, digital transformation, agile transformation, cost reduction, quality, acquisition(s), etc. You have a better chance of succeeding by agreeing to the goal(s) as a management team, getting alignment across the company, and managing it. How do you do that with VSM? Make goals and KPIs visible; study your value streams, for Kaizen opportunities; and use the Toyota Kata, and the A3 problem-solving approach. Use the 8 steps of VSM (Don Tapping, Tom Luyster, Tom Shuker; Value Stream Management, Productivity Press, 2002) which are to commit to lean, choose a value stream, learn about lean, map the current state, identify lean metrics, map the future state, create kaizen plans, and implement those plans.

Recession or not, someone in your organization should be explicitly, and intentionally managing the value streams. To not be intentional about it would be value stream ‘mis’management.

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