The document outlines the key success factors for value stream transformation, emphasizing the importance of tying transformations to organizational strategy and ensuring leadership involvement. It identifies ten critical aspects, including team composition, the necessity of a skilled facilitator, and the need for a tightly managed transformation plan. The overall goal is to achieve effective, large-scale improvements that align with strategic objectives.

1. Value Stream Transformation:
10 Keys to Success
Webinar
February 3, 2015

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Strategy
Deployment
Value Stream
Transformation
Individual
Improvements

5. Transformation
What problems (gaps) do we need to solve?
What opportunities do we want to seize?

6. VSM Transformation:
10 Key Success Factors
1. Tie value stream transformation to a
larger organizational strategy.
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7. © 2015 The Karen Martin Group, Inc. 7
1. Create a Strategy
2. Define True North Metrics
3. Prioritize Problems &
Opportunities
4. Transform Value Streams As
Needed
Gain Alignment and Focus

8. VSM Transformation:
10 Key Success Factors
2. Must be leadership driven.
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9. VSM Transformation: Leadership Driven
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10. VSM Transformation:
10 Key Success Factors
3. Must be at the right level: Macro.
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11. Work: Degrees of Granularity
Value
Stream
Process Process Process
Step StepStep
11
Macro
Perspective
• Define strategic
direction (“what”)
• Heavy leadership
involvement
• Value Stream
Mapping
Micro
Perspective
• Identify the
tactical “how”
• Heavy frontline
involvement
• Metrics-Based
Process Mapping

12. Value Stream Transformation: Begin at Macro Level
12

13. 13
Visualize the entire cycle of value delivery on a single sheet of paper
13

14. VSM Transformation:
10 Key Success Factors
4. Scope narrowly.
© 2015 The Karen Martin Group, Inc. 14

15. Value Stream Scoping Diagram
Defining Specific Conditions
Golden State
Equipment, Inc.
Capital
Equipment
Catalog
Configure
to order
Engineer
to order
Custom
hardware
Custom
software
Both
New Product
Development
Spares &
subassemblies
Catalog
Engineer to
order
15

16. VSM Transformation:
10 Key Success Factors
5. Team composition & size:
• Leaders with strategic authority
• No more than 10
• Highly cross-functional.
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17. Sample Mapping Teams
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1
2
3
4
5
6
7
8
9
10
Function Name
Hospitalist Physician
ED Physician Physician
Medical Group Corporate Director
Nursing Director
Pharmacy & Ancillary Assistant Vice President
Case Management & Quality Assistant Vice President
Rehab Assistant Vice President
Admitting, Bed Control, UR Manager
EVS Assistant Vice President
Nursing Chief Nursing Officer
1
2
3
4
5
6
7
8
9
10 Order management Director
Logistics Vice President
IS Vice President
Tech support Chief Operating Officer
Sales Director
Implementation Director
Legal Vice President
Strategic operations Vice President
Client services Vice President
Function Name
Accounting, order mgmt Director

18. VSM Transformation:
10 Key Success Factors
6. Sequester the team for
three consecutive days.
© 2015 The Karen Martin Group, Inc. 18

19. Prepare
Understand
Current State
Design
Future State
Develop
Transformation
Plan
Execute
Transformation
Plan
Three Consecutive Days4 Weeks Prior
to Mapping
Following
Mapping
Repeat
Value Stream Mapping Activity
Phases and Timing
19

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21. VSM Transformation:
10 Key Success Factors
7. Hold daily briefings with
leaders in all affected areas.
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22. Daily Briefings
#1 – Reduce resistance
#2 – Build consensus
#3 – Gain commitment 22

23. VSM Transformation:
10 Key Success Factors
8. Use a highly skilled facilitator.
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24. © 2015 The Karen Martin Group, Inc. 24

25. VSM Facilitator: Key Skills & Traits
• Objective; No skin in the game.
• Able to sense posturing and draw out objections from
senior leaders.
• Able to challenge senior leader mindsets and paradigms.
• Highly skilled in measurement, data collection, analysis.
• Highly skilled in time and people management.
• Significant experience with performance measurement
and a wide variety of countermeasures.
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26. VSM Transformation:
10 Key Success Factors
9. Future State: Think BIG!
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27. Sample Future State Decisions
• Replace sales commissions with annual profit sharing.
• Insource an outsourced activity.
• Merge two departments.
• Shift work from one department to another.
• Eliminate a department (with staff redeployment to other areas).
• Build the means for customers to order online.
• Develop, test, and roll out multi-disciplinary bedside rounding.
• Double financial levels of authority.
© 2015 The Karen Martin Group, Inc. 27

28. VSM Transformation:
10 Key Success Factors
10. Transformation Plan needs to be
tightly managed.
© 2015 The Karen Martin Group, Inc. 28

29. J F M A M J J A S O N D
1 PROJ Steve 0%
2 PROJ Steve 100%
3 KE Bruce 50%
4 KE Bruce 50%
5 PROJ Jessie 100%
6 PROJ Sally 100%
7 KE Jessie 0%
8 PROJ Mike 100%
9 JDI Jessie 50%
10 PROJ Steve 80%
11 PROJ Steve 10%
12 PROJ Bob 0%
13 JDI Jessie 100%
14 PROJ Marcia 25%
15 PROJ Tom 30%
16 KE Marcia 50%
17 PROJ Sally 50%
Value Stream Champion Sally Brooks
Value Stream Mapping Facilitator Karen Martin
Value Stream Transformation Plan
Value Stream Product Y Scheduled Review Dates
Executive Sponsor Jim McMahon 2/10 + bi-weekly Thu 10 am
Socialize new criteria for engineering,
quality, & purchasing involvement.
Date Created 1/5/2014
Kaizen
Burst #
Improvement Objective / Hypothesis Proposed Countermeasure
Exec.
Method *
Owner
Planned Timeline for Execution
Status
Create procedure/train GS service engineers to
properly feedback suggestions to engineering.
Create bulletin re: standardized headplate
design to eliminate flange orientation.
Create visual "milestone" timeline to
educate customers.
Define technical info needed from
customer and when.
Signature: Signature: Signature:
Revise standard Ts & Cs to incorporate time limit
for customer approval for final payment.
Error proof P.O. info (correct specs, ship to,
etc.); notify customer re missing info and
drop dead date.
Create criteria for LOI acceptance.
Add initial project release in SF.
Resocialize existing customer-requested
CO procedure.
One piece engineering flow
Agreement
Executive Sponsor Value Stream Champion Value Stream Mapping Facilitator
* Execution Method = JDI (Just-do-it), KE (Kaizen Event), or Proj (Project)
Move to one release (pump & systems)
Date: Date: Date:
Create commodity management team &
supplier SLAs.
Standardize WPS/PQR from suppliers.
Revise proposal template to limit time to 4
revisions.
Create pull signal for invoicing.
Create trigger to release (BOMs) for
purchase.
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30. VSM Transformation:
10 Key Success Factors
1. Tie to a larger organizational strategy.
2. Leadership driven.
3. Macro level (via value stream mapping).
4. Scope narrowly (one product family or set of conditions).
5. Team composition & size: leaders, no more than 10, highly cross-functional.
6. Sequester the team for 3 consecutive days.
7. Hold daily briefings with full leadership team.
8. Use a highly skilled facilitator.
9. Future state: think big!
10. Transformation plan needs to be tightly managed.
© 2015 The Karen Martin Group, Inc. 30

31. Your Questions
• I’d like to see VSM applied to construction, oil
and gas, architecture, education….
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32. © 2015 The Karen Martin Group, Inc. 32
Karen Martin, President
@karenmartinopex
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