Running a successful organization is to generate multidimensional value to stakeholders. It has to explore both the art and the science of value management discipline.
The value-based management enhances guidance, improves business effectiveness and performance, achieves collective advantage and multi-layer ROIs.
Business Value Model: Business value is an informal term and could mean different things to different people. A "Business Value Model" is used for assessing the value of an investment objectively in order to achieve high ROI. It is neither a model of intent nor a model of actual value creation; it is a model used for assessing the value of an investment, to the business.
Business Value Models are decision aids and investment tools for articulating "what value does the investment provide the business," and how to improve ROI. The whole value chain needs to be aligned, engaged, and contributing so a variety of stakeholders get their fair share, and define the ideal business model, distribution, products & services, and business brand.
Value stream view: Corporate value is multifaceted nowadays, as the value of the firm goes beyond economic value or shareholder value, to include other forms of value such as employee value, customer value, alliance partner value, managerial value, and societal value, etc. The value chain processes produce goods and services and deliver them to varying shareholders. To generate and preserve "business value," you need to gain empathy from various stakeholders about their specific needs; have a very clear idea of the life cycle of "product/service" and the overall "value proposition," in which it fits into the overall business value portfolio.
In specific, value streams break into multiple stages; each stage decomposes into routing maps or can map to a process to deliver products/services and enable value stream stages. With a clear business value stream view, all parties can agree on the common value proposition. The value chain process is the flow of activities, which include what managers, employees and applications do. The whole value chain needs to be aligned, engaged, contributing by sharing the value so customers and stakeholders get their fair share; the value gets measured effectively and makes continuous adjustments to shift context for creating optimal value-delivery.
Value perception and presentation: Good value management improves business performance; great value management accelerates value-added change or innovation. There are hard and soft business values; there are strategic values and tactical values; there are incremental values; transcendental values; some values are long-lasting; other values are intermediate. To perceive and preserve "business value," identify stories on the basis of value proposition, you need to have a very clear idea of the overall "value proposition" as well as the business model, and build a good strategy to drive value-added innovation.
To perceive the value of the business model and make an objective assessment of an investment, you need to have a very clear idea of the new product/service development cycle, the overall "value proposition," in which it fits into the overall "products/services portfolio," the wider competitive landscape and price/business model. When the organization experiments with the new business model that creates the revenue stream, be careful of what cost optimization/ restructuring/performance measures need to be considered while trying to model a particular business growth scenario. Value should be estimated or demonstrated through the rate of productivity increases, the rate of new product, service development, the rate of market share gains, the rate of customer approval and satisfaction gains, or the rate of sales gains, etc.
Running a successful organization is to generate multidimensional value to stakeholders. It has to explore both the art and the science of value management discipline. If there are no values "glue" to keep everyone motivated by the collective endeavor, then you're sunk. If everyone is thinking and behaving in the same way through the same value set then that same stickiness will drain the organization’s energy. Business management needs to understand business value chain/stream from broader lenses, and take the alternative value creation approach to accelerate performance and unleash business potential.
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