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Learn Value Based Management (VBM™)
Value Based Management (VBM™) is a management philosophy targeted to achieve superior results. It is a process that measures performance by the value returned to shareholders. Implementing VBM™ successfully requires a change in corporate culture and in the adoption of VBM™ concepts at all levels and functions within the organization. It includes an integration of performance measurement, compensation, strategic planning, training, and communication. VBM™ translates a value creation mindset into action.
VALUE MAPS™
To help our clients fully operationalize VBM™, a series of Value Maps™ is designed to generate an organizationally holistic solution. Each Value Map™ takes about an hour to experience, and is customized to address the client's unique organizational and operational issues.
The title of the Value Map shown above is "How Economic Profit works". In 90-minutes, participants are engaged in a discussion about the concept of Economic Profit (the generic name for EVA®). The group is asked to consider several operational changes for a fictitious toy company. Using the principles of Economic Profit and maximizing long-term shareholder wealth, the group collaborates to apply the theory of Economic Profit to real operational issues. This "hands-on" process provides the appropriate pace that people need to internalize the concepts of Economic Profit .
HOW DO VALUE MAPS™ WORK?
Each Value Map is designed to engage employees in a small group learning experience. Groups of 6 - 10 employees go through a customized Value Map process with the guidance of a "coach" or facilitator. Employees that experience a Value Map process will typically:
- Challenge their Assumptions - Employees are asked to challenge their own assumptions and attitudes.
- Understand Marketplace Drivers - Review and understand marketplace or internal operating data that supports the need for change.
- Seek Understanding - Seek understanding and collaborate with others in the group to form new knowledge about customers, competitors and what internal changes are required to improve VBM measures and shareholder value.
- Make New Conclusions - Develop conclusions regarding how a VBM measure, such as EVA®, is applicable to the business, their department, and the work they do.
- Clarify their Role - Determine their role in applying VBM concepts to their job and the parts of the value chain they directly and indirectly support.
VALUE MAP™ COMPONENTS
The Value Map process relies on several components working together to create a highly engaging experience for employees from all "levels" and functional areas. Each Value Map is rigorously tested with client employees to ensure that by the time the company wants to roll-out the maps, they are "plug-and-play".
The components of a Value Map process are:
- Large Visual - The map is approximately 3' by 5' and uses a metaphor to integrate all of the learning objectives of the session. The map is designed to be visually fun, engaging, and hold the attention of the employee. Since most people learn visually, the ability for employees to retain the material covered and continue to be able to understand the complex relationships is extremely high.
- Marketplace and Operational Facts - People are most likely to change their assumptions and opinions about an issue when confronted with irrefutable data. Often, employees are not exposed to the type or detail of information that senior executives are. Once the same information is presented to them in a logical and consumable format, they often come to the same conclusions regarding a strategic business issue.
- Collaborative Questions - The pace and direction of the group's conversation is guided by a series of questions that the group is asked to answer. The process of group collaboration is what creates new understanding and shared knowledge.
- Conversation - At the intersection of the map visual, marketplace facts, and collaborative questions is the conversation that is generated by the group.
- Coach - Each group is has a "coach". The coach is not a subject matter expert and is not a teacher of information. The coach's role is to manage the group dynamics and ensure that they answer the Collaborative Questions as a group. By not requiring a subject matter expert to be present, the deployment of strategy and change initiatives can occur at an accelerated rate.
- The Value Map process is customized and focus group tested to ensure that it is "plug and play" for the organization. The deployment of maps to tens of thousands of employees, across a wide geography, can occur within weeks.
- Action Plan - In order to ensure that employees are able to translate their new understanding of EVA® in changed actions, they are asked to articulate the behaviors and activities they will change.
CUSTOMIZED VBM SIMULATIONS & GAMES
The simulations and games are designed to be used in groups. By listening and considering what others understand, people allow themselves to be transformed. The diversity in views is grounded by the use of relevant marketplace data. In some cases, greater learning and collaboration can be achieved by placing the employee in situations where they have a "real-life" experience. Our VBM simulations are typically game board like, and involve employees on teams competing with one another.
Each VBM Simulation process is designed to place employees in the shoes of a decision maker. A situation where the decisions they make impact the business issue being studied. Depending on the design requirements, a simulation may run anywhere from one hour to several hours. It would typically be experienced in groups smaller than 20 employees.
Employees that experience a VBM Simulation process will typically:
- Be asked to challenge their own assumptions and attitudes about Value-Based Management and what is required to create real value.
- Be introduced to the key value drivers.
- Experience the relationship between the key value drivers and how decisions impacting one or more of these drivers ultimately impact the business and value creation.
- Seek understanding and collaborate with others in the group to form new knowledge about VBM.
- Develop conclusions regarding VBM and the most effective ways of going about generating value.
- Determine their role in driving value and what it will take to create success, for themselves as well as for the company and shareholders.
Call us at 610.388.0969 or use our convenient contact form.
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