How to involve everyone in (small to large-scale) innovation: a case study about value streams and a pacemaker team in an HR Tech scaleup

Prato, an HR Tech scaleup with over 100 people, organises its strategy in a number of “value streams”. Examples of value streams are: attracting new customers for existing products, building and selling new products, improving customer satisfaction, phasing out legacy software, opening up existing products for integration with 3rd parties, etc.

A dedicated budget (capacity) and strategic goal is allocated to each value stream. All work items on the end-to-end kanban board belong to one of the value streams and the flow is managed in accordance with the policy of that specific stream. Moreover value streams with a focus on innovation (changing the business) and operations (running the business) run in parallel; their work items are pulled by the same teams and each of those teams self-organizes around the different types of work.

Recently a new value stream was introduced, which involves the creation of a new innovative payroll engine system. For a scaleup like Prato this is a large-scale project (10k-20k person days) with dependencies in the entire organisation. From the beginning it was clear that the existing structures alone weren’t sufficient to tackle this challenge: the sheer complicatedness of the payroll engine development requires a coordinated effort of multiple teams and experts. Hence some people advised Prato to form a dedicated project team, separated from the people supporting the existing HR systems - this comes down to Gartner's Bimodal IT approach. However Prato believed that Bimodal IT is an outdated approach that creates conflict and fails to unlock the potential in the entire organisation.

Therefore the Prato leaders decided to involve everyone in the organisation in forming a small but focused “pacemaker team” for the new payroll system. That pacemaker team should give focus to the payroll engine value stream and should set the rhythm for the new product development by the existing teams. So by installing a pacemaker process Prato assumed that it could involve expertise in the entire organisation and could scale the development to multiple teams, without falling in the trap of prescriptive "agile scaling" frameworks. In essence, this approach should ensure that the existing kanban system can be used as a lever to manage the flow of a large-scale project: the pacemaker team plays both the role of splitter (upstream) and integrator (downstream) of work and the existing teams can pull work in parallel with work coming from the other value streams.

Did Prato succeed so far? This and more will be covered in this case study.

 
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Outline/structure of the Session

1) Introduction and short history of Prato

2) Organising the company strategy into value streams

3) Operationalizing value streams by means of an end-to-end (upstream and downstream) kanban system for running and changing the business

4) The challenge of a new large-scale project and why Bimodal IT isn't the answer

5) The Lean concept of "pacemaker" and how Prato introduced a pacemaker team into the organization

6) Implications of the pacemaker approach on the existing organization and lessons learned

7) Conclusions

Learning Outcome

Participants should leave this session with an understanding of why and how value streams and a pacemaker team can be used for changing and running a business.

Target Audience

Senior Leaders, Executives, Change Agents

Prerequisite

A basic understanding of Lean-Agile principles should be sufficient.

schedule Submitted 3 weeks ago

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