The Corporate Value Creation Formula
Last month, I talked about how you can use a three-part corporate value creation formula for your clients by asking:
How can our company create value for its customers in a way that also creates value for our organization and its external stakeholders?
Using this formula helps your clients move beyond the backward-looking financial approaches to valuation and focus on the drivers that will improve the financial and operational health of the company.
But your clients are probably like most companies. They aren’t equipped to think or manage their businesses in this way. They are too busy just doing what they’ve always done. They are working on distinct tasks. They lose sight of the big picture. You can help them break through by helping them to creating the foundation to think and work in a value-focused way.
How to Help Your Clients Build the Right Foundation
Here are some samples of how you can help your clients build a foundation to ensure the work everyone in the company is doing every day is contributing to their company’s value creation goals:
Map the company’s operations as a single value creation system including the many subsystems that exist to optimize each of the company’s value drivers (customers, company and stakeholders). Remember what I said above about invisible intangibles? The easiest way to make the value drivers visible is to create a map or drawing that shows how everything fits together as a single system. Start with the customers and work backward. How to create value for them? How to build a company and the stakeholder relationships that help deliver value today and into the future?
Document detail about each subsystem including the processes they use, the internal people who are responsible for the work and resources used. Once you’ve created this, everyone will know where to go to understand how their work is connected with the work of their colleagues…and with the overall success of the company.
Track the key performance metrics, including costs, of each subsystem. This way, everyone will always know how they are doing and will be able to make better decisions about what they should each do next. Here focus on what we call the “dining room” metrics as opposed to the “kitchen metrics,” that is, the truly key performance metrics that should be part of the shared alignment hub.
Work with internal teams to create a cadence of meeting and decisioning to use the new structure and information you’ve helped them develop. This builds on the information developed above. The best way to make sure it gets used (and improved!) is to convene regular group discussions. This ensures that they care continuously analyzing, prioritizing and improving performance at both the system and subsystem level. The cadence we recommend is a Monday morning “commits” meeting and a Friday “wins” meeting. The key is to develop a habit of consistent progress.
Become the Go-To Trusted Advisor
Taking this approach can help you make a huge difference by helping your client maximize their value. , to help them to create the tools and capabilities to tell a better story—and create a system to improve it. This is a great business opportunity for your consulting practice. You can help your clients see and manage in a more efficient and effective way. It speeds your time to trusted advisor status. And you’ll keep getting invited back when client teams identify and tackle new challenges and goals.
About Insights7: Our AlignEX™ aligned execution hub helps companies unify strategy execution data and decision making. Advisors use our platform to win more work with less effort. Using our system as a delivery vehicle for your advisory work positions enables your consulting process move from advising to helping make change happen. It’s a great fit for consultants that work at either the process or the strategy level. Let’s talk! We’ll start with your deliverables and map how these can become actionable in our system. Feel free to message me at XPX or connect and schedule on LinkedIn.
