Value driven management aligns the company’s operational and financial ‘tactics’ with its long-term strategy.
It allows management to focus on what can be done today to create value in the future and adjust the course when needed.
Finally, it serves as a natural prioritisation tool – enabling companies to discern what is important (i.e. what creates more value) and consequently channel the always limited time and resources to the right areas.
Value drivers are capabilities resulting in outcomes that give an organisation competitive advantage to create value over time.
Identifying a business’s key value drivers and acting upon them are powerful tools.
Key value driver analysis can be a powerful way to focus management attention on activities that will have the greatest impact on value.
However, it does involve a significant commitment from management and should be given high priority within the organisation if it is to succeed. Once completed, this analysis can help to ensure that strategies and decision making are aligned within the true drivers of value for the business.
The following checklist can help implement Value Driven Management: