Value Stream Mapping at E-Quality Italia Case Study

E-quality Italia (E-quality) is a training company that specializes in providing new organizational concepts and ideas (we call them ‘organizational technologies’) to corporate customers. These customers come from every industry sector and range in size from very small to very large. Some examples of organizational technologies that we have implemented are:

• restructuring the helicopter maintenance process for the Italian Air Force
• introducing a business relationship management practice and the PRINCE2^® method to Danieli S.p.A.
• introducing ITIL^® to Brioni S.p.A.

For 15 years, E-quality has been helping professionals and the organizations in which they work to develop their skills and achieve their goals. We firmly believe that only those who have fully understood a method are able to teach it to others; as a result, all of our teachers are professionals with years of experience in the IT industry. Because we have real experience with the materials and methods that we teach, we are able to engage our customers with genuine enthusiasm and conviction.

I, Luca Gambetti, am one of the founding partners of E-quality. Before, I worked in a well-known Italian software company for 13 years. I often felt frustrated as one of my strengths is sensing and responding to market needs, but my managers did not leverage this strength. After climbing the corporate ladder, I decided to become the CEO of my own company and use this skill; I was responsible for defining my company’s vision and strategic direction.

The initial purpose statement of the company was to relentlessly search for the best organizational methodologies, adapt them to the Italian market, and transfer them to our customers. To this end, we became an accredited training organization for ITIL and PRINCE2.

After a while, I discovered that my company had some common problems: waste, lack of clarity, and siloed thinking. Worst of all, some employees were unhappy. I needed to fix these problems.

At the end of 2016, I began a change initiative to transform E-quality into a flat organization. I wanted the company to become more flexible and efficient, and I wanted to improve the work culture for all the staff at E-quality.

In 2016, I met Brian Robertson, the inventor of Holacracy^®. I was immediately excited by his ideas. I wanted to learn more about this novel and dynamic way of running an organization.

I was trying to figure out how to enable my small company to run itself, without me having to play the CEO role.

Holocracy

Holacracy is a new way of structuring and running your organization that replaces the conventional management hierarchy. Instead of operating top-down, power is distributed throughout the organization, giving individuals and teams freedom while staying aligned to the organization’s purpose.¹

E-quality formally adopted Holacracy in December 2016. However, transitioning to a flat organizational structure proved more difficult than expected.

Early challenges

Despite my enthusiasm for the transition, we experienced several challenges that severely impeded our progress. For some time, we did not share accountability properly. The mechanisms of Holacracy were often applied in a formal, bureaucratic way. Some employees left the company because they were frustrated or dissatisfied. Something was obviously missing.

In 2019, we identified the main causes of our failure. These were:

• a lack of shared understanding about what is valuable to our customers
• a lack of clarity about how everyone contributes to value creation
• overly complex internal processes
• siloed mentalities stemming from overly detailed responsibilities.

At the same time, we started learning about ITIL 4. It was immediately clear that we could use:

• the service value system and the guiding principles (particularly the principles ‘focus on value’, ‘collaborate and promote visibility’, and ‘think and work holistically’)
• value streams
• value stream mapping
• the service value chain.

We felt that we could easily use these concepts and tools in our company, even though we are not an IT organization, because they are universally applicable and beneficial.

The need for change only became seriously urgent in the beginning of 2020 due to the COVID-19 pandemic. We only had a few weeks to completely change our way of doing business, and I was determined to improve our organization at the same time.

¹ www.holacracy.org/explore/why-practice-holacracy [Accessed 18/08/2020]

The Search for Purpose

The first thing we decided to do was to clearly state our purpose as a company, as is suggested in ITIL^® 4: Drive Stakeholder Value.

“Every organization should have a purpose and a strategy for achieving that purpose. A good purpose will motivate employees, affect how work is done, and provide direction for all service-related questions.”²

We discussed and eventually defined our purpose.

E-quality Italia’s purpose

The Italian school and university systems do not provide the necessary skills for many new professions. As a result, numerous guides and qualifications managed by national and international bodies have become widespread. Organizations and individuals have difficulty understanding what skills are needed and how to obtain them. E-quality is an authoritative and experienced guide that will help users to find the best approach for their needs.

Defining Outcomes

After having stated our purpose, we identified our major stakeholders. This led to our three key desired outcomes:

1. to help our participants become recognized for their skills and competencies
2. to create new, more valuable training products
3. to ensure that the E-quality employees are satisfied with their work and working environment.

When we had defined and agreed our desired outcomes, we started a series of workshops for value stream mapping.

Definition: Value stream mapping

A Lean management technique to visualize the steps needed to convert demand into value, used to identify opportunities to improve.

At the beginning of the first meeting, we introduced all of our employees to ITIL 4’s service value chain and the seven guiding principles to give them some background knowledge of the concepts we would be using.

Defining a Vale Stream: Helping our participants become recognized for their skills and competences 

The next step was using the service value chain to help define our value streams. We followed the ITIL 4 suggestion to describe value streams from the customer’s point of view (outside-in, not inside-out).

Every value stream step was defined in a collaborative way.

When all of the steps for every value stream were defined, our partners described the related activities. We specified the inputs, outputs, and tools used in each step. Figure 3.2 shows how much information came out of this process for just one value stream.

Throughout this process, we kept note of all the inconsistencies, duplications, areas of waste, and so on. We then created a long list of improvement initiatives that we plan to prioritize and implement in 2021.

After we had listed the inputs, outputs, and tools used for each step of the defined value streams, our Holacracy governance became simpler and clearer. During the process, we all learned a lot about the work of our colleagues, which led to greater empathy and understanding.

Many aspects of ITIL 4 helped us in this process, but the highlights are:

• The concepts and discussion around organizational purpose and service culture helped us to understand that our aim is always to help our users reach their goals.
• The value stream concept helped us put ourselves in our users’ shoes and think outside in.
• The ITIL service value chain helped us clarify and classify our daily work and link it to the co-creation of value.
• The guiding principles were used as a compass every time we faced a difficult situation.

Lessons Learned 

During this process we learned that even in small organizations like ours, it is difficult to ask why every activity is done; you constantly risk working on autopilot and therefore losing opportunities to co-create value. Value stream mapping forced us to clarify, challenge, and alter or eliminate aspects of our work that otherwise would have remained part of E-quality for a long time. We still have many improvements to implement, but the changes we have already made have achieved good results, including:

• We were able to quickly transition to a fully virtual company in a few weeks.
• Every role is now measured by key performance indicators, which are directly linked to customer value.
• Turnaround per person is forecast to increase by 15% from 2019 to 2020.
• Earnings before interest, taxes, depreciation, and amortization are forecast to increase by 10% from 2019 to 2020.

The next step in our ITIL journey is, as always, improving. As well as working on our new list of improvement projects, we agreed that everyone should demonstrate a continual improvement mindset, as part of their roles.

We used this metaphor: E-quality is a garden, and each role is responsible for one or more plants. After a few months, all the plants should have grown. In practical terms this means that every role will have objectives and key results that will be measured and monitored to ensure that progress is being made.

We will also use the information collected during the value stream mapping exercise to describe our processes in detail. This will help us demonstrate our service value system’s compliance with BS EN ISO 9001:2015 and other applicable standards.

As a result of our transition towards a flat virtual organization and the value stream mapping project, everyone in the company now understands some ITIL 4 concepts, such as the service value system, and is comfortable practicing methods like value stream mapping.

ITIL 4 helped us understand our organization better, as it clarified how our value streams connected and where there was waste. We learnt that, although we are not strictly an IT organization, ITIL 4 is perfectly compatible with our business and our flat organizational structure.

Axelos. (2020). ITIL^®4: Drive stakeholder value. TSO, London.

Axelos. (2019). ITIL^® Foundation: ITIL 4 Edition. TSO, London.

Axelos (2020). Value streams and ITIL 4 CDS: looking holistically at service management.

Luca Gambetti founded E-quality Italia in 2006, after a spending over 20 years in the IT sector. Today, Luca is accountable for E-quality’s service offering.

Luca is passionate about making people’s life as simple and straightforward as possible. This attitude led him first towards IT systems, then towards organizational systems, and finally towards self-management and self-organization.