## 1. Specify and track value Value is enabled by a flow of work and feedback: *We can only measure value by getting feedback from those experiencing it.* Therefore, you must **design for feedback to enable value**. Value is fundamentally different from physical properties: it is deeply subjective and highly volatile. It is a measure for how positively we feel about something that addresses a need at a given point in time. It is not something that can be measured objectively, like physical things can be. That is why the **value must be specified to create a shared understanding**. In companies, multiple parties are involved in creating value, and each exists in mutual dependence. The optimal solution for creating value is not the absolute maximum for any one party: Delivering value is an act of cooperation. *The Outcome Map is a way to create that shared understanding of the value of a target outcome and its benefits.* ## 2. Provide clarity by mapping the value stream There are virtually infinite ways to improve a system, but unless those improvements target the constraint, they will not lead to a net improvement of the value stream. The **Theory of Constraints** by Eli Goldratt states that flow is always limited by exactly one constraint at a time (as described in his book The Goal). Therefore, system throughout can only be improved if the constraint is improved. We constantly need to reign in activities that do not bring value and eliminate steps that don't add any value. Therefore, identifying where that constraint lies is the best way to provide clarity on the most useful response to improve the system. The effort invested in gaining that clarity allows us to not waste time or energy on things that ultimately matter little or likely not at all. ## 3. Optimize the steady flow of value A steady flow implies that the outflow stays equal to inflow over time. No overproduction waste is happening, even if only temporarily or at some substage. Optimizing for flow requires **systems thinking**: A system is not the sum of its parts, it is the product of their interactions. Therefore, *optimizing for flow is contradictory to optimizing for resource utilization* (known as the "**efficiency paradox**" in the book This is Lean). Having any actors but the ones at the constraint stay busy at all times leads to dramatic increases in lead time and work in progress, and thereby undermining the production of value. The math behind this is known as the [Kingman's Approximation](https://www.allaboutlean.com/kingman-formula/), which states that at the theoretical maximum of utilization you would get infinite wait time. A maximally utilized resource is by definition unable to respond to any kind of variation - unplanned events or work that need to be addressed. Therefore, achieving both high resource efficiency and high flow efficiency is only possible in ideal, highly stable work environments and a trade off must be made to [maximize value generation while minimizing cost](Improving%20Flow%20Efficiency.md). ## 4. Pull (don’t push) and limit work to reduce waste Overproduction creates unnecessary inventory, potentially increasing downstream queue sizes, and is a kind of waste ("muda"). Varying cycle times also are a source of waste, as the value stream now has variance built in that hinders planning and clarity ("mura"). And if there is too much stress (pressure) on a resource to produce, that triggers unexpected faults, leads to downtime, and a reduction in quality ("muri"). A pull-based system triggers work in upstream resources based on customer demand. Therefore, *pull is only driven by an established need for value, creating a direct connection between that need and the delivery of value*. Remember that even in a pull-based system you should [limit the work in progress to maximize flow efficiency](Improving%20Flow%20Efficiency.md). Information among teams in a pull-based system is itself shared the same way: It should be offered in a way that recipients can pull that information as needed. Instead of pushing information into the system, provide dashboards and shared data and documents that recipients can pull as and when needed. ## 5. Eliminate waste through learning and observing Waste is the result of not understanding how or not being able to deliver value (in more effective ways). Therefore, learning is central to removing waste, which in turn requires a strong sense of [Psychological Safety](Management/Teams/Psychological%20Safety.md). That safety is needed to have open communications and encourage reporting of issues while fear of reprisals or public shaming blocks a team's ability to identify and address impediments to flow. A proven approach to learning is the scientific method through testing of hypotheses and their subsequent falsification or affirmation. (Keep in mind that the most reliable tests involve only a single variable at a time.) Learning implies the willingness to be wrong, which requires psychological safety. In other words, **learning is error correction for the mind**, something that is clearly uncomfortable. Learning requires patience, humility, and deliberately putting ourselves into situations where we might discover that we are wrong. To learn means to let go of our current models. We implicitly want the our mental models are true, leading to confirmation biases, oversimplifying the world, and making us ignore information that doesn't make sense. Therefore, we need to go and see the actual place where the work happens, an act known as "**genchi genbutsu**". Genchi genbutsu allows us to solicit reliable information and test our hypotheses.