Value oriented management
- 1. 11 October 2010 Value creation PortfolioManagement Creativity Innovation Business case Net present value Scenario Strategy Value Based Management Decision Style Benefits Cash Flow Value Curve Investment Risk Uncertainty DecisionMakingIntegral Performance Management Learning Motivation PARTNERSPARTNERS Value-Oriented Management A framework for successful business innovations! Edward Koops March 2018
- 2. 21 March 2018© 2018 VBM Partners - All rights reserved PARTNERSPARTNERS Now we have survived the crisis, we must ask ourselves: “How can we create value for our stakeholders in tomorrow’s markets?” § Without valuable innovations in the pipeline, your competitive position will probably erode quite fast § Although an economic downturn puts pressure on investment budgets, innovation is a continuous process to work on - Today’s organizations are working continuously on innovative and better models for tomorrows business world § To be successful, you should pay attention to what customers value most, not just to what you are able to produce - Buying products and services fulfils customer needs, using context mapping you can learn a great deal about your customers needs § Making it happen is still a challenge, as internal and external interdependencies have increased in today's global business world - Initiating and managing change have increased significantly in scale, complexity and riskiness § Without management paying attention to value creation, bottom line benefits are often unclear or lacking - Costly transformation programs are often started to keep up with the competition instead of staying ahead of the competition How to deal with these issues and challenges successfully?
- 3. 31 March 2018© 2018 VBM Partners - All rights reserved PARTNERSPARTNERS Value-Oriented Management defined § Creating Opportunities: Idea Generation and Holistic Appraisal based on Business Cases § Selecting the most promising Opportunities: Portfolio Management § Measuring Benefits Realization: Performance Management of Programmes and Projects § Managing for Value: Sales and Operations Performance Management Managing For Value Measuring Benefits Selecting Opportunities Creating Opportunities A process of facilitation and decision making, focusing on value creation for all stakeholders of organisations, based on their Business Ideas, by Business Idea The strength of the chain is in the weakest link, so they all need to be addressed properly!
- 4. 41 March 2018© 2018 VBM Partners - All rights reserved PARTNERSPARTNERS Investing in Value-Oriented Management will result in a most favourable return for your organisation § Making detailed business cases using Benefits Maps, periodically evaluating projects and programmes in the portfolio and managing the benefits will deliver the following benefits: - More value: solutions will generate more value as performance will be higher and costs will be lower as a result of running interactive, multidisciplinary workshops - Less money wasted: projects and programmes delivering insufficient value will not have a go or they will, as soon as the expected benefits fall below the requirements, be stopped in time - Better control: better insight in the performance of your organisation, less projects and programmes will exceed budgets and time schedules as a result of better managing dependencies and scarce resources, and as a result of early signalling and solving of bottlenecks - Higher benefits: by managing them proactively benefits will be in line with expectations or even exceed them § Estimating the size of the benefits of Value-Oriented Management is not easy - However, practice shows that only paying more attention to value creation during the design process using Value Engineering techniques will easily deliver tenfold the amount of time and money invested To put it briefly, Value-Oriented Management delivers a return on investment to dream of and means an important contribution to your bottom line!
- 5. 51 March 2018© 2018 VBM Partners - All rights reserved PARTNERSPARTNERS Required organisational competences for Value-Oriented Management Being Innovative and Value Driven Strategic Thinking and Decision Making Building and Managing Portfolios Developing and Validating Business Cases Managing the Realisation of Benefits Acting on Integral Performance Views
- 6. 61 March 2018© 2018 VBM Partners - All rights reserved PARTNERSPARTNERS Corporate Social Responsibility (CSR) makes sense within a Value(s) Oriented Management framework as it maximizes value for all stakeholders Economic responsibilities Be profitable Legal responsibilities Obey laws and regulations Ethical responsibilities Do what is right, fair and just Philanthropic Responsibilities Be a good corporate citizen Desired by society Expected by society Required by society Required by society Source: Business and Society: Ethics and Stakeholder Management, Carroll & Buchholtz Demands by society are evolving: ecological concerns have grown the last decades and have become part of CSR. Such concerns have to be addressed in today’s strategic decision making
- 7. 71 March 2018© 2018 VBM Partners - All rights reserved PARTNERSPARTNERS Our Value-Oriented Management offerings Training § Standard VOM training: 3 days - How to create a process focused on value creation, which facilitates innovation and change - How to avoid traps in decision making and build and manage portfolios with valuable programmes and projects - How to develop a good business case and track the benefits § Business Case Training: 2 days - Financial concepts and calculations for business casing - How to develop a good business case § Custom-made VOM training: 1-5 days - Parts of the standard training tailored to the needs of specific groups, e.g. management, programme and project managers, controllers, business analysts etc. - First steps of business case development based on a real case § VOM Introduction Course: 0,5 day - Introduction for managers to the core concepts of Value- Oriented Management: value-creation, portfolio management, business case development and benefits tracking § Performance Management Training : 1 day - How to realize the benefits of innovation and change - How to incorporate change in your planning & control cycle Consultancy § Development of a business case - Support the business case owner in developing a business case using the VBM Partners methodology § Benefits Map workshop - Create a Benefits Map for a business opportunity in a workshop together with the main stakeholders § Audit of the VOM process - Compare current practices with best practices to assess maturity levels and give recommendations for improvement § Audit of a business case - Give an opinion on the validity of a business case, based on an assessment of the process and structure which have been used to make the business case § Portfolio Management Implementation - Develop and implement governance, methods, processes and systems § Performance Management implementation - Benefits Realization Management: design of benefits tracking dashboards and processes - Planning & control cycle: budgeting and forecasting for innovation and change versus operations using operational value-drivers, adapting management information needs
- 8. 81 March 2018© 2018 VBM Partners - All rights reserved PARTNERSPARTNERS To become proficient in Value-Oriented Management, participate in the three day training course of VBM Partners It is possible to organize a one-day follow up training in which experiences can be shared and discussed and some optional modules scheduled for further deepening of insight Learn about… § The drivers of success of an organisation and the connections between innovation, change, decision making and problem solving § Your personal preferences and styles with regard to innovation, change and learning § Value concepts and valuation methods and the information you need to apply them § How to make a Business Case which will be supported by all stakeholders and learn how to make a Benefits Map § How to select the right criteria for decision making and how to define the management information needed to manage the benefits of your investments Get rid of… § Silo thinking § Barriers to creativity § Insufficient support for change § Decision making based on gut feeling § Budget overruns and failing projects and programmes § Badly founded investment budgets
- 9. 91 March 2018© 2018 VBM Partners - All rights reserved PARTNERSPARTNERS Why VBM Partners? Adaptive solutions § Holistic approach of complex business issues § Pragmatic solutions tailored to your needs PARTNERS Connected § Member of the Orde van organisatie- deskundigen en -adviseurs § Member of the Dutch Association of Cost Engineers (DACE) Innovative § Creative problem solving § Applying latest methods Close cooperation § Interactive approaches to consulting § Training and coaching skills
- 10. 101 March 2018© 2018 VBM Partners - All rights reserved PARTNERSPARTNERS References Business Case (training) Integral Performance Management
- 11. 111 March 2018© 2018 VBM Partners - All rights reserved PARTNERSPARTNERS Publications (in Dutch) 1. Waardegericht Management: symbiose tussen management en ondernemerschap/Edward Koops– In: Holland Management Review, nr. 172 2. Grotere rol van de staat noodzakelijk in huidige kredietcrisis / Edward Koops – In: Liberaal Reveil, december 2009 3. Samenwerken aan control is het credo! / Edward Koops – In: CFO Magazine, november/december 2008 4. Geen Governance zonder Integraal Performance Management / Edward Koops – In: CFO Magazine, januari 2005 5. Het speelveld van de CFO: omgaan met dilemma’s / Fred Conijn, Allard Everts, Edward Koops, Rob Uiterlinden - 's-Hertogenbosch: Tutein Nolthenius, 2005 (ISBN 90 72194 73 X) 6. Financiële trends: van hype tot hulpmiddel / Fred Conijn, Edward Koops, Rob Uiterlinden – In: Management Control & Accounting, maart 2004 7. Financiële trends: de scorekeeper voorbij? / Fred Conijn, Edward Koops, Rob Uiterlinden – In: Management Control & Accounting, februari 2004 8. World Class Finance in de praktijk / Fred Conijn, Edward Koops, Rob Uiterlinden - 's-Hertogenbosch: Tutein Nolthenius, 2003 (ISBN 90-72194- 66-7) 9. Cost Management, onmisbaar voor succesvol ondernemen / Edward Koops, Karin Bos – In: Kluwer Praktijkboek Financieel Management, 2002 10. Combinatie van BCS en ABC leidt tot betere stuurinformatie / Edward Koops – In: Management Control & Accounting, 2001 nr. 5 Edward Koops 0 68 333 69 70 PARTNERSPARTNERS VBM Partners Voor succes met Value Based Management! Kuyperstraat 11 3404 HL IJsselstein edward.koops@vbmpartners.nl www.vbmpartners.nl