The Value Flywheel Effect: Power the Future and Accelerate Your Organization to the Modern Cloud
by David Anderson with Mark McCann and Michael O’Reilly
Recently, a new book came to my attention that explores the intersection of business, technology, and people. This is a great read for anyone who wants to understand how organizations can evolve to maximize the business impact of new technologies and speed up their internal processes.
Last year at re:Invent, I had the opportunity to meet David Anderson. As Director of Technology at Liberty Mutual, he drove the technology change when the global insurance company, founded in 1912, moved its services to the cloud and adopted a serverless-first strategy. He created an environment where experimentation was normal, and software engineers had time and space to learn. This worked so well that, at some point, he had four AWS Heroes in his extended team.
A few months before, I heard that David was writing a book with Mark McCann and Michael O’Reilly. They all worked together at Liberty Mutual, and they were distilling their learnings to help other organizations implement a similar approach. The book was just out when we met, and I was curious to learn more, starting from the title. We met in the expo area, and David was kind enough to give me a signed copy of the book.
The book is published by IT Revolution, the same publisher behind some of my favorite books such as The Phoenix Project, Team Topologies, and Accelerate. The book is titled The Value Flywheel Effect because when you connect business and technology in an organization, you start to turn a flywheel that builds momentum with each small win.
The Value Flywheel
The author describes four phases of the Value Flywheel:
- Clarity of Purpose – This is the part where you look at what is really important for your organization, what makes your company different, and define your North Star and how to measure your distance from it. In this phase, you look at the company through the eyes of the CEO.
- Challenge & Landscape – Here you prepare the organization and set up the environment for the teams. We often forget the social aspect of technical teams and great focus is given here on how to set up the right level of psychological safety for teams to operate. This phase is for engineers.
- Next Best Action – In this phase, you think like a product leader and plan the next steps with a focus on how to improve the developer experience. One of the key aspects is that “code is a liability” and the less code you write to solve a business problem, the better it is for speed and maintenance. For example, you can avoid some custom implementations and offload their requirements to capabilities offered by cloud providers.
- Long-Term Value – This is the CTO perspective, looking at how to set up a problem-preventing culture with well-architected systems and a focus on observability and sustainability. Sustainability here is not just considering the global environment but also the teams and the people working for the organization.
As you would expect from a flywheel, you should iterate on these four phases so that every new spin gets easier and faster.
One thing that I really appreciate from the book is how it made it easy for me to use Wardley mapping (usually applied to a business context) in a technical scenario. Wardley maps, invented by Simon Wardley, provide a visual representation of the landscape in which a business operates.
Each map consists of a value chain, where you draw the components that your customers need. The components are connected to show how they depend on each other. The position of the components is based on how visible they are to customers (vertical) and their evolution status from genesis to being a product or a commodity (horizontal). Over time, some components evolve from being custom-built to becoming a product or being commoditized. This displays on the map with a natural movement to the right as things evolve. For example, data centers were custom-built in the past, but then they became a standard product, and cloud computing made them available as a commodity.
Basic elements of a map – Provided courtesy of Simon Wardley, CC BY-SA 4.0.
With mapping, you can more easily understand what improvements you need and what gaps you have in your technical solution. In this way, engineers can identify which components they should focus on to maximize their impact and what parts are not strategic and can be offloaded to a SaaS solution. It’s a sort of evolutionary architecture where mapping gives a way to look ahead at how the system should evolve over time and where inertia can slow down the evolution of part of the system.
Sometimes it seems the same best practices apply everywhere but this is not true. An advantage of mapping is that it helps identify the best team and methodology to use based on a component evolution status as described by its horizontal position on a map. For example, an “explorer” attitude is best suited for components in their genesis or being custom built, a “villager” works best on products, and when something becomes a commodity you need a “town planner.”
More Tools and Less Code
The authors look at many available tools and frameworks. For example, the book introduces the North Star Framework, a way to manage products by first identifying their most important metric (the North Star), and Gojko Adzic‘s Impact Mapping, a collaborative planning technique that focuses on leading indicators to help teams make a big impact with their software products. By the way, Gojko is also an AWS Serverless Hero.
Another interesting point is how to provide engineers with the necessary time and space to learn. I specifically like how internal events are called out and compared to public conferences. In internal events, engineers have a chance to use a new technology within their company environment, making it easier to demonstrate what can be done with all the limits of an actual scenario.
Finally, I’d like to highlight this part that clearly defines what the book intends by the statements, “code is a liability”:
“When you ask a software team to build something, they deliver a system, not lines of code. The asset is not the code; the asset is the system. The less code in the system, the less overhead you have bought. Some developers may brag about how much code they’ve written, but this isn’t something to brag about.”
This is not a programming book, and serverless technologies are used as examples of how you can speed up the flywheel. If you are looking for a technical deep dive on serverless technologies, you can find more on Serverless Land, a site that brings together the latest information and learning resources for serverless computing, or have a look at the Serverless Architectures on AWS book.
Now that every business is a technology business, The Value Flywheel Effect is about how to accelerate and transform an organization. It helps set the right environment, purpose, and stage to modernize your applications as you adopt cloud computing and get the benefit of it.
You can meet David, Mark, and Michael at the Serverless Edge, where a team of engineers, tech enthusiasts, marketers, and thought leaders obsessed with technology help learn and communicate how serverless can transform a business model.
And of course, if you’re ready to go serverless, we have experts who can help you get started with AWS on your cloud computing journey.