Value Flywheel Strategy Phase 1 Clarity of Purpose

We are continuing our series about our book ‘The Value Flywheel Effect‘. We’ve been looking at the value flywheel and exploring the model. Last time we spoke about the whole mode

Sep 25, 2024

What are the four phases of the value flywheel model?

The four phases of the value flywheel model are Clarity of Purpose, Challenge, Next Best Action and Long Term Value. In this article, we want to dive deep into each phase of the flywheel strategy, starting with Clarity of Purpose. To show you the value flywheel strategy applied to deliver business value.

What does ‘clarity of purpose’ mean?

Clarity of purpose is knowing where you’re going and setting your goals. Do you understand what’s valuable and what you’re working on?

Remove the coconut headphones. Understand the problems you’re solving and why. It’s about having vital clarity on why you do the work. There’s a need for everyone to understand why they’re doing the things they’re doing. Who are your users, and what are you doing to meet their needs? We talk about this a lot, and we’re well-practised in it. But this is the stuff that people and teams need to ask themselves.

Who is responsible for ensuring clarity of purpose in an organisation?

The phrase rolls off the tongue. But as an engineer, what’s your clarity purpose? Is it going to work? Or is it writing code? What is your company’s clarity of purpose? There’s an onus on senior leadership and the CEO to ensure that ‘clarity of purpose’ is understood. The aim is to determine what your business is going after. And clarity is getting very specific. Is it measurable? There’s a lot to unpack.

It’s vital for several reasons. One of the hardest things in modern software delivery and digital orbs is prioritisation. How do we know we are working on the right thing? And do we understand the current picture? How can we make sure we’re making the right decisions on the approach we are taking? If we don’t have clarity of purpose, we don’t understand the problem we’re solving or our users’ needs. We can’t make good decisions about the work we carry out. Or where we invest our time or resources to meet those needs.

It’s critical if you want high-performance, autonomous teams. If teams don’t align with the clarity of purpose, they will go in different directions. And they won’t have the impact you think they should have on your organisation. So it’s critical that clarity of purpose is understood and clearly articulated at all levels, from top to bottom.

What happens when you need clarity of purpose or a flywheel strategy?

You have to prioritise decision-making because you need more capacity. And alignment to make sure people have the same mindset. It is also an anchor when you’re doing things. You can only have innovation with clarity of purpose. Otherwise, it is just making stuff! And execution without clarity of purpose is just busy work. You will not be able to see a finish line. It’s essential to be clear on the outcome before you start ideating and thinking outside the box.

But if you have clarity purposes, work is meaningful and has an impact.

Being able to pivot is critical. In some companies, they build something because someone else made something. And sunk cost fallacy kicks in. You can measure success with clarity of purpose. But without it, they end up investing in something rather than nothing. Knowing when to stop and when to try the next thing is a core rationale for solid clarity on your purpose.

What are some tools that can help in gaining clarity of purpose and implementing a flywheel strategy?

Situational awareness is critical. Have the data to back up your purpose with crucial metrics you drive towards. You need to make sure that what you’re doing is influencing the right metrics. And all aligned with your goal. As an IT person, you can develop a million good ideas. But you’ve got to be ready to reject the ideas that don’t have any impact or don’t improve the bottom line. Or if they will not manifest as a benefit for our Northstar.

Having the correct data means you can define your North Star and be data-driven. North Star Framework is a technique to structure your data so you’re clear on the goal. And it helps you to measure ‘time to value’. You must be clear on the value if you’re trying to build something. And how long it takes to unlock? There are specific techniques, wuch as wardley mapping and serverless first that help you with clarity of purpose. But what happens if you ignore it? It’s not default or mandatory. You need to talk about why you’re doing stuff. Just mindlessly doing it is not healthy.

It’s about keeping your org healthy.

Organisations need to become healthy places where people want to have an impact. Otherwise, employees will turn up and clock in the hours. They won’t move the org forward.

Teams solve the same problems if there needs to be more collaboration. It becomes difficult to prioritise and organise across groups. You start to guess and build stuff for the sake of building. You move your focus to something else.

Engineers love to build cool shiny stuff. Without purpose and understanding, they will continue to make cool shiny stuff without any real valuable impact on the org. How can an organisation innovate without clarity on its purpose or overall mission?

Flywheel Strategy Applied with The Serverless Edge — *Photo by Jason Goodman on Unsplash*

Is it innovation or innovation theatre?

We talk about ‘innovation theatre’ when the execs wear sandals, sports jackets and no ties! That’s not innovation. It’s also innovation theatre when you start putting stickies on the wall instead of using documents. They are the traps you see people fall into when it comes to innovation.

Another trap is the build trap, when teams build like ‘billy-oh’, but nobody knows what they’re making or why. Except that they have to be ready by Friday.

And then you have what we call gold plating. You get into a big ball of mud where engineers built a complicated system. It’s got duplication and complexity. And then, all of a sudden, you need a simplification programme because it’s too difficult. Or you need a reuse programme because you’ve built the same thing four or five times.

A lot of these are common traps. You see them in big companies that have scaled too quickly, even in the big tech companies you think would be organised. They’ve got the same thing ten different times over. They have the metrics and data points. But they’re not making an impact because they lack alignment with the vision. In other words, they do not have clarity of purpose.

Startups tend to be good at ‘clarity of purpose’. Well, the ones that survive are. The ones that don’t survive may have had a lousy clarity purpose. That’s the conclusion of not having a clarity of purpose. Over time you go out of existence. Inertia takes over.

So that’s the craic. That’s phase one of our value flywheel: clarity of purpose. There’s much more in our book. We’ll hit phase two: ‘Challenged’ in the next episode.