Upstream & Downstream

The terms “Upstream” and “Downstream” are important to incorporate into the enterprise vocabulary in order to have meaningful discussions about the entirety of the Value Creation Process. The reason is that upstream processes can significantly impact the downstream processes. But if not considered as parts of the Value Creation Process, they can be siloed in communications, create various bottlenecks along the Organizational Value Stream, and decrease overall system throughput in capacity and velocity.

Upstream – Is the collective of processes that happen prior to acquisition (deal closing date). They are usually similar to a classic sales funnel and have conversion rates associated with various stages. As the hospital progresses through the funnel, it can churn because it does not pass the Strategic Filter of the organization.

Downstream – Is the collective of processes that happens after the Close Date and starts with the integration — proceeding to Stabilization and Change Management. If the Business Development team is not adherent with the Strategic Filter, the practices that get acquired do not fit the Value Creation Plan. Therefore, they are not a candidate for Value Creation with the processes that are established at the organizational level, or have cultural misalignment leading to various triggers of burnout as well as inability to implement change post acquisition.

Another reason to pay attention to the connection between these two parts as one Value Stream is Capacity Management. The capacity could be managed by understanding the bottlenecks in the system and throttle the throughput according to the most narrow part of the Value Stream. One can become concerned that the deals are not able to wait, because someone else will acquire them. This risk is mitigated by creating a buffer state — “stabilization” — in which the practices are “parked” after acquisition with minimally-invasive centralized processes being applied to them.

If the system is not designed for a continuous monitoring of the upstream and downstream connection, this may slow down the acquisitions or fail during integration — all which will lead to inability to implement change downstream. This ultimately leads to failure of creating Value for the enterprise as a whole.