This blog series discusses the use of value management to develop and implement business initiatives (programs and projects) that are well aligned with the strategy, deliver benefits and are achievable. In the previous blogs we talked about the concept of value and how to measure value. In this final blog of the series we will explore the actual process of value generation.
Value realisation is only possible if benefits are achieved, therefore the continuous monitoring of both alignment with strategic objectives and achievability of the initiative are essential to realising value. Value management is based on the balance of alignment and achievability and offers a robust method to combine benefits realisation with risk management to ensure that initiatives undertaken will not only fulfil stakeholder’s expectations, but also be realistic in regards of available capabilities.
The change recipients, sponsors, programme and project managers collaborate to set objectives that are agreed and achievable and align with the organisation’s strategies. Typically, through creative thinking-based workshops a value management facilitator will help elicit stakeholders’ expectations and creatively identify potential alternatives to achieve them.
- The first step of the process is based on sensemaking concepts; it allows different stakeholder with diverse perspectives to agree on a set of common objectives that can be linked to value goals.
- The second step entails the facilitation of an ideation process that consists of identifying as many potential alternatives as possible to achieve these objectives.
- Finally, in the third step, all those alternatives are assessed in regards of their achievability and a choice is made on a set of options that will form the project or program.
During the performance cycle of decision management, value management will consist of monitoring benefits realisation, continual risk assessment and sustaining value targets.
Sensemaking is aimed at identifying, mapping and prioritising benefits. The output will be the benefits map and key performance indicators to measure their achievement.
In today’s VUCA context, organisations must be creative to maintain or gain a competitive edge. Ideation is a creative group process aimed at finding innovative alternatives to achieve the agreed benefits. This process enables a clear mapping of benefits to outputs
The benefits realisation management plan will combine the above elements with transition and integration support activities, their milestones and their ongoing monitoring.
Benefits realisation is subjected to high ambiguity and is a creative team process.
Value management must include an assessment of probability of achieving the benefits and overall value objectives. Risk thresholds define the achievability of a change initiative; once achievability factors are defined they are used to assess the achievability of the initiative.
When the initiative has been approved for execution the team will perform a risk analysis that will lead to the definition of contingency reserves and risk responses. Management reserves are based on the level of achievability, or overall risk.
During execution, risk responses will be implemented, reserves managed, and achievability issues monitored. If achievability, based on the factors used to approve the initiative, is questioned, the initiative’s owner or board could challenge it.
Risk management is subjected to uncertainty and requires an analytic process.
As organisations operate in increasingly complex and volatile contexts the concept of value continues to evolve. The organisations that can strike the right balance between benefits realisation and risk optimisation, whilst fostering adaptability and responsiveness, will deliver value to their stakeholders. Selecting the most innovative business initiatives, based on their alignment to the strategy and achievability is a difficult task which can be supported by the application of a value index.
Value management is an integrating process that enables diverse stakeholders to identify their common objectives. Its creative approach ensures that the solutions they propose are innovative and achievable.