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March 29, 2022

Business and Technology Evolution with The Flywheel Effect

By IT Revolution

This post is a transcript of the 2021 DevOps Enterprise Summit presentation by David Anderson and Mark McCann. You can view the full video here.


David Anderson: Welcome everyone. Today, we’d like to talk to you about using Wardley Mapping with the value Flywheel for combined business and technology evolution. We believe, despite all the change that’s happened, there’s still a wave of transformation on the way for many organizations. We believe that the serverless-first approach will help you and your company ride this wave and succeed. Specifically, we’re going to introduce something we call The Flywheel Effect.

First, let’s do some introductions. My name is David Anderson. I’m an engineer with extensive enterprise, cloud, and leadership experience.

Mark McCann: My name is Mark McCann. I’m also an engineer and cloud architect, and I’m passionately pursuing serverless-first and engineering excellence.

David Anderson: We are both part of the Wardley Mapping community, the service community, and we also have a big focus on product. We’ve been building a body of content around the service over the past year. We have a book coming out by IT Revolution Press next year, along with a third contributor, Micheal O’Reilly. Between the three of us, we have extensive experience in building systems and driving change. We believe serverless-first represents an evolution into a new way of working, that most companies will start using the cloud technology to reduce their time to value and really drive business results.

Mark McCann:

As we said, The Flywheel Effect is the mechanism we are going to describe. It’s a phrase from Jim Collins’ book Good to Great, but it is a very accurate description of what we are observing.

But before we get into that, let’s explain what a flywheel is, because there’s maybe one or two of you that need a refresher on 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 that smooth progress to happen. And that’s where a flywheel comes in. The last thing you want is business, technology, and energy canceling each other out. We’ve seen that many times in our experience.

David Anderson: Yeah, definitely. The thing is we want to help the organization get this flywheel turning, going in the right direction. It’s really about improving your time to the value, ultimately delivering sustainable results. But maybe, there’s probably the flip side. Right? What we have seen a lot over our careers is things like dev versus op silos, tech versus product silos, unclear purpose per technical decisions, and short-term thinking. This all builds business, technical and organizational depth. It clogs up your flywheel.

So I don’t think this sounds complicated, but we’ve seen this a lot. So how do you build that long-term success? Mark and I have seen this in a whole bunch of companies we’ve been speaking to and working with over the years. We’ve got Liberty Mutual, Coca-Cola, Taco Bell, worked with software, iRobot, BBC, Ericsson, Fender, A Cloud Guru, Amazon, Google, Microsoft, and loads of startups have figured this out. Has your company figured this out? The thing I believe is that a lot of companies don’t really know that this flywheel exists. Their caught in the build trap and don’t know their time to value. By the way, “Escaping The Build Trap is a brilliant book, by Melissa Perri. Thoroughly recommend it. Yeah.

Mark McCann: So we believe… In the value flywheel here, we believe that creating and visualizing this 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 this change. We’re going to talk you through this model and highlight it with an example later. But before that it’s important to point out, this is neither a hybrid strategy nor operational efficiency. This is about having a real bias for action, aligned with the pragmatic and proven ways of working that we have seen. This wheel is designed to spin many times, so don’t feel that you need to do everything in phase two before moving on to phase three. Momentum and that bias for action is more important than anything else. Getting moving is really critical. So phase one, it’s all about purpose. It sounds easy, but do you know what you’re trying to do as a team, as a department, as an organization? Do you really know what is valuable for your team, for your org, for your business? Phase two covers the challenge.

Have you created the right environment for success? Is the right environment there to discuss what you need to get to, and to challenge the thinking until it’s good enough for you to succeed. Phase three is about that next best action. You don’t gold-plate or build things you don’t need to. With real focus, you can get results quicker than you can ever imagine. Phase four is about building for long-term value. There will be plenty of opportunities in the future, but you don’t want to close them off because of some decisions you’ve made today. It’ll slow you down later.

David Anderson: So in the past… I mean just thinking, Mark, Michael, and I have been thinking about this for many, many years. I’d always thought of these as building blocks, but I think when you sit and show someone all these building blocks built, it just seems overwhelming and it doesn’t really convey the movement and that rapid iteration as you create each of these blocks and build on it. It does show that bias for action as credit for success. I’m kind of moving away from that these are building blocks. This is a flywheel that you have to keep turning. It’s a nicer analogy, and we certainly find that this works for this type of thinking.

Mark McCann: Yeah. Building blocks are very static. A flywheel conveys movement and that’s critical, because that bias for action, as we’ve mentioned, is critical.

David Anderson: So let’s kind of walk through each of these four phases. The first is purpose. Rather than me rant on, Mark, why do you think the purpose is important?

Mark McCann: Yeah. So purpose… And we’ve seen this time and time again. It’s really critical for that alignment on vision and strategy. So the teams actually know that the work that they’re working on actually makes a difference. It’s actually aligned with the goals and KPIs, and results of your business. We’ve seen too many times where teams hadn’t had this clarity of purpose and they can’t really articulate the thing that they’re working on, how it makes a difference to their overall business. So it’s critical that they have that clarity of purpose. One of the other big things that we’ve mentioned here around the purposes, is about obsessing over your time to value. It is critical that teams have the observability of that. How long it takes for teams to get their [inaudible 00:06:49], and making that really clear, and making that feedback very actionable so that your teams can focus on minimizing and reducing that time to value overall you.

David Anderson: Yeah. The thing is… If I touch on Wardley Mapping for this. So for each of these phases, we have a suggestion on how you Wardley map this. For the first one, you Wardley map to gain situational awareness of the competitive environment you’re in, the market level. You’re putting the product on the market. Who else is in the market? What’s your differentiator? What’s your chance of success? There’s no point in having this fantastic organization with engineering product people going crazy and you’re going in the wrong direction. So that idea of Wardley Mapping to map your market is absolutely critical.

Mark McCann: The next stage is challenge. So Dave, instead of me waffling on, why is challenge important? Why is it critical for success?

David Anderson: The first thing you always see in any team is the environment for success. It’s the people in the teams, it’s the people who built software. So do you have an environment where people can be at their best and they can challenge each other responsibly? The whole argument… I mean, that’s really the thing. Sometimes it’s referred to as psychological safety. There’s no point in knowing the right thing to do, but you’re maybe afraid to kind of say that. If you have that supportive environment, you can build and react to those kinds of loops we’ve been talking about. Then again, this socio-technical phrase is interesting. There’s a socio-people aspect of your system, and there’s a technical. As engineers, we’ll always default to technical, but the big part of that is I would say more important. Then you think about the problem prevention, time to values, you got to look at all this stuff together and figure out what’s the best thing that will work. You can rarely code your way out of a problem, and that’s really what we have seen over the years.

Mark McCann: Absolutely. I think bringing those elements together has been critical. Having that holistic socio-technical view of the system has been critical to getting that flywheel turning. Finally, on challenge, we think mapping is massive in inviting challenge. What we have seen in our experience in Wardley Mapping, people can challenge the map, they’re not challenging the individuals. So it becomes a lot safer for people to bring up new ideas, new topics, because leadership and people that you work with, can challenge that map, they’re not challenging you as a person. So we think mapping is critical here to gain that understanding of your organization, to look at your capabilities, look at your doctrine, to understand. Is it fit for purpose, for where you’re trying to get to? Will it help you get to realize your long term value? Mapping to gain that understanding and that situational awareness of your organization capabilities is critical to really drive the flywheel forward.

David Anderson: And remember, challenge is a good thing. It’s not bad. Challenge always helps you get to a better place. Stage three is next best action. Mark, what’s your thoughts on this one?

Mark McCann: So I think the next best action really shortcuts a lot of the waffly, strategic frameworks that we’ve had in the past. What can you do now for rapid impact? What’s the most important, most impactful thing, you as an individual and as a team can do now for impact. Having that mindset is critical. We believe having that serverless-first mindset and approach really enables your teams to focus on that business outcome and that business impact, but it also has the added benefits. It keeps your code low, keeps your security high, keeps your cost liabilities under control. So we really think serverless-first is a game-changer for helping you move rapidly in the right way and the sustainable way. Removing developer friction is also a massive enabler for being able to execute that next best action. And consistently identifying and removing impediments to your development teams is one of the most effective paths to high performance. Your goal here is fast flow efficiency, from idea to real user value and real impact for your business.

David Anderson: Serverless is a good option to get that next best action, that immediate response.

Mark McCann: Absolutely. I think serverless has been a game-changer in that regard. You can’t move at a rapid speed without compromise.

David Anderson: And you can do this in other approaches as well, but that serverless mindset we have found is just primed to move quickly. You can do it with other things as well, but it’s 10x the user base with serverless.

Mark McCann: One of the big things that we keep reiterating is, it’s serverless-first, it’s not serverless only. If serverless doesn’t set your needs right now, there are plenty of compelling fallback options that you can take advantage of in the cloud.

David Anderson: Again, the right tool for the job. Every time. One way to figure that out, again go back to the Wardley Mapping, is to map out your tech stack and figure out, “Okay, we’ve built this thing. Okay, we have it, but is that a good thing to build.” and look for opportunities for evolution and impediments to remove. As a team sit and figure that out. You always have some tech stack, but decide what’s the best thing to act on. So by Wardley Mapping as your solution, you can figure out, “Okay, we’ll need to build this, because this is the differentiator and we’ll just ram something else.” So again, that’s such a personal technique to kind of get some visibility into this space.

Mark McCann: And then finally, with all of the first three elements of the flywheel turning here, we get into long-term value. Dave, what do you think? What’s the long-term value that we’re going for here?

David Anderson: So I think this is probably the most interesting one for me because over my career, I’ve always had this in mind. You rarely get a requirement for long-term value sitting in a project, but you always know in the back of your mind, it’ll be easier if we just put this thing into place. I was always very popular in teams when I would come up with, “We should do this. Why? Because it’s the right thing to do.” But it’s extra work. But a problem prevention culture means that you reward teams for doing the hard stuff up front and avoiding failure. It’s not about rewarding heroes.

David Anderson: You stay up all night and get the system back online, you’ve already failed by that point. Doing the hard things early, which means your system doesn’t go down, and for us, that’s been well architected. It’s been massive in that. Embracing engineering excellence… Take pride in your engineer, and build things when you have to and don’t when you don’t. Then there’s another part of that, which is sustainability. If you can create low carbon products and services and a sustainable pace for your people, which leads to long-term sustainable business success, that is just the flywheel is really turning around.

Mark McCann: Again, we use Wardley Maps here to identify what those new opportunities are. What were those new emerging areas of value that we should go after as a team, as an organization? What new threats are there that we need to counter? What new players are starting to that emerge? What areas do we need to get out of? Mapping helps you identify the areas that are no longer valuable or no longer core to your business and can give you good insights into where you should extract from. It also gives you those new points of evolution to start thinking about. Well, how do we evolve from some of the custom-built things that we have or the more commodities, so that we can free up our people to work on that long-term value and the higher order of elements of our business?

David Anderson: So we’ve covered the value of The Flywheel Effect [inaudible 00:14:19] Wardley Mapping. So let’s just do a brief intro on mapping. We explain most, but the important part of Wardley Mapping is this value access along the bottom. We’ll describe what that is, but first to illustrate it, if you think of computers and companies… In the 1950s, having a computer was novel, and that was stage one genesis. It was very rare to have a computer in a company. By the seventies, companies built their own computers and got ahead. The custom built computers to give them capability, that’s stage two. Custom built. In the nineties, computers were everywhere. They were getting better, more refined, there was a boom. That’s stage three, getting that product phase. And now stage four, they are a commodity. You don’t even really buy them anymore. You rent them as a utility, which we call the cloud.

Mark McCann: So these four are on the axis here. So stage one is genesis, as is illustrated there. That component that lives here is rare and poorly understood. It has a future value, but it’s uncertain whether we’ll ever make it to commodity. The user thinks of this as exciting and surprising. We treat it with wonder. Stage two is custom built. We know how to build this component here and we’re starting to learn about it. We’re starting to give a form of understanding of 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’re doing pretty well. Stage three is product and rental. Things are starting to heat up. It’s a growing market. It’s getting more competitive. These things are highly profitable and they need to be fit for purpose, as consumption is wide.

Mark McCann: We listen to our customers and make these things better, so that people will buy more of these things that are in the product. Stage four, the final stage, is commodity or utility. This component is widely used in the mature market. Having this is just the cost of doing business and everyone understands it. There’s little profit to be made and the company needs to mass produce these things for big profits. So we’re going to walk you through a worked example here to really bring this to life.

David Anderson: Okay. So super simple example, you’ve got a business who are running a conference. We’re holding a conference today, should be familiar with it. First step with mapping, is the sketch of a really simple value chain. We always start with a customer and the customer need, and they act as the anchor. The customer or attendee has the need for knowledge and knowledge has a dependence on a conference. That’s it. Super simple. Then moving forward, you take that value chain and you drop it into the Wardley map here. So for the first phase, which is purpose, you want to kind of see what that looks like. As I said, the attendee is the value or the anchor for the map. The Y axis here, we should explain that now, represents visibility. Things closer to the attendee are more visible, things lower down are less visible. So as a team, you want to spend more time at making sure that things closer to the costumer are of value and less time in the things that are away from customer.

Mark McCann: And the beauty of maps here is that, the components can move across this canvas here, from left or right. They evolve towards commodity as they become more industrialized. But what does it mean? Quite simply, if there is an advantage to be gained from making something better, then it will move from genesis through to commodity. Market competition will force that to happen, if there’s value in doing so. So you can see here, we’ve placed conference to the left of product, as a physical conference has a lot of unique and specific factors.

Mark McCann: But the disruption that COVID has brought, means that has quickly moved more to the right and become more industrialized in the virtual conference. But the customer need, that hasn’t changed. The need for knowledge is still there. And this is a very real problem, and one that you’re all well aware of, especially as you’re attending a virtual event right now. You all need this knowledge that this conference and this event is giving you, but how many of you would’ve actually traveled to Vegas? We don’t know that, but there’s probably a lot of people here on this virtual event that wouldn’t have been here, wouldn’t have been able or could afford to travel to Vegas today.

Moving on to phase two, challenge. This is an interesting phase as you start to make some assumptions. We accept that the virtual conferences are a commodity and created a pantheon of a platform. So if we decided to custom build that platform, it would be way over to the left, but it’s still not very visible to the user. They don’t care how you deliver the virtual conference experience. They just want to get the knowledge. And at this point, as we talk about this as a team, we can test out the psychological CFD of your environment and the appetite for change. Wardley Mapping is a great way to facilitate a healthy, challenging debate on where this should be and what we should do about the platform, as we tackle in delivering this virtual conference. It really does invite that challenge, because you’re challenging the map, you’re not challenging any individual.

So when you take that next step, any platform you need will need those enhanced audio and visual skills to give that content polish. Now this is a much better investment, investing in those AV skills than it is in trying to custom build a platform to create your own YouTube, for example. There’s no comparable advantage in trying to recreate something that already exists, that is very capable of providing the capabilities that you need. There’s a much better return on investment than in leveraging a platform that already exists out there.

David Anderson: I mean the platform argument… Sorry, discussion. That could literally go on for years. But having a map, the room can sit as you’re walking through this, pause that decision, and move forward. Eventually if they completed the map, the decision makes itself. It’s like, “Okay, now we’ve seen how this is going to play out. It’s obvious where the platform should sit.” But you can get through that in a day, as opposed to three years. The next phase is next best action. Again, with our serverless-first mindset, we’ll rent and not build a platform. Let’s look back at the customer. So the next best action approach, we spot there’s a new need for access, real time and on demand. Real time gives you improved bigger collaboration with speaker chat as a new feature. Again, that’s good that we can look at that from a platform perspective and have real requirements, not just kind of wishlist requirements.

Mark McCann: Remember we’re just mapping here. Right? We’ve built a pretty accurate picture in minutes or hours, as a team. Our investment has been low. Right? We’ve only spent a few hours or minutes even on this and knocking this around. Can contrast that to, “Oh. We’re getting a platform.” and then three months later you realize that, “Actually, we don’t need to custom build own platform.” Mapping brings that situational awareness to bring that challenge, and it’s very quick, and the return of investment is very high for your org. Phase four is long term value. As we are looking at long term value, we can start to look ahead. Once the system is in place, maybe we can start getting clever with some personalization and create some creative content per attendee. This could open up new collaboration channels, and enable things like co-creation of content.

There’s much more access now, because at this event, we’re going to be speaking to you on speaker chat as we are presenting here. So maybe we can use that time to find some of the adopters of the patterns and explore further use cases. Then we can find some minds here who are trying to tease out some capabilities or some terms and we can use that. It’s a valuable capability that has emerged there. It’s not a primary need, but we need to think ahead of these things. We need to start thinking, “What are the new emerging values that we, as a conference provider, can grab.”

David Anderson: Good stuff. As we close at the map example, there’s a couple of things that are worth calling out. This is a template that we’ve been using for a long time. So there’s four elements to this. First, it’s a value chain that we usually put on the left of the whiteboard, or mirror if your doing this online. I’ve removed it from this picture. You got the map in the center, which is your focus of attention. Then the next thing we have here is climatic patterns. These are things that affect the demand, that affect the industry, regardless of this customer, this company, things that are happening in a way. Then finally, there’re observations, which is the north of the map. We’ll come back to those in a second. The climatic patterns for this map, which makes them a few times… COVID accelerates change, speeds it up.

David Anderson: There’s a raised expectation of premium content. People aren’t going to sit at home and watch secondary content. Time and work life balance are important. The barriers to entry have lowered. There’s lots more people that can attend this virtual event. You don’t have to fly to Vegas. Isolation drives the need for more and a different type of connection. It’s harder to connect when you’re remote, so there’s a new need appearing. Then there’s a risk from cyber threats. One attack and your event is destroyed. This is much worse, obviously in a physical… Or in a virtual event.

Mark McCann: Then finally, the observations. We use these observations really to drive, “Well, what are we actually going to do? What is this map telling us? What actions is it compelling us to start thinking about?” The observations we have here around, that increased the attendee-speaker interaction. The virtual platform has created a new value proposition. A speaker to attend the interaction is now easier, so we probably should do something about that and start capitalizing on that. The well architected practice helps problem prevention. Failure isn’t an option on a virtual conference. You need this to be up and resilient and highly available. So the platform needs to be very robust and you don’t want to custom build that for a few extra features. You want to basically leverage and do your homework, but leverage a class capability that already exists out there that has those well architected characteristics that you need to deliver a compelling virtual event.

Mark McCann: Then that need for knowledge has really evolved to being joining in as a community. We’ve always had a small portion of returning conference attendees that would think of an event as a community and more of a community event where they could meet up with like-minded people, and challenge each other, and discuss ideas. But now, that can be expanded greatly. The community can be much more diverse and inclusive and that’s a big selling point for online virtual conferences. We’ve lowered the barrier significantly to entry for people who couldn’t fly around the world to be part of some of these events. Again, that’s something that needs to be explored. Actioned on is that need for knowledge, that need for being part of a community becomes greater.

David Anderson: Good stuff. So Simon Wardley is the guy that created this map and stuff, so we should give him a nod. Simon says, “The idea of future possibilities through stepping stones is an important concept within strategy.” It’s not about drawing a picture in January and forgetting about it. Writing something on the wall. It’s not about what you do every second Friday. This flywheel is a pattern of interaction. It enables a team to map out the journey during execution. You get alignment and challenge in the room and if the map is wrong, just change it. Only if it’s wrong. The map represents a conversation, but it also uncovers very useful value and highlights blockers to your team’s progress.

So that’s The Flywheel Effect. I hope that made sense and raises a few questions. The whole point of this is to map out the journey and it shows the way you kind of need to look forward and use bias for action to test your assumptions. We both think that a version of this flywheel exists in every single 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’ve talked about the importance of next best action and tracking your own time to value. All of this is covered in the book and in the blog. So thanks again for listening to us talk. My name’s David Anderson.

Mark McCann: And I’m Mark McCann.

David Anderson: Again, this is just a tester of the content in our book, which is coming out next year from IT Revolution Press. There is a few case stories of companies in the book that have gotten this model working really well. We have lots of advice, illustrations on how this works. And again, there’s content on the blog. Really value your feedback and please reach out to us, either at this event on chat or on social media at the tags there. We believe that this wave of transformation has still not hit most companies. Yes. You immigrate into the cloud, but have you really thought about how technology will drive your business when you get there? Thanks very much.

Mark McCann: Thank You.

 

 

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