Submit Article | Advertising | Contact Us | Join SAVE
Editor's Message

How is a theory of value used?

The last edition of Value World explored theories of value in order to start a deeper discourse about why the value engineering and value management communities are needed. Let me begin this edition by thanking the UK’s Institute of Value Management (IVM) and authors from Europe for allowing permission to republish their work, originally presented at the joint EGB-SAVE conference in Brighton UK last year.

In this edition of Value World, the intention is to widen our scope of interest from projects to their contribution to organizations; that is, the value projects give to their parent organization. This is an important topic, for just as few military strategists try to win every battle in order to win wars, many project managers are tasked with doing just that. In the UK, we have some projects that were delivered on time, in budget, to spec, and so are examples of well executed project management, but no one cares (e.g. Millennium Dome in London). They were projects disconnected from on-going organizations and the work organizations do. This statement builds on an important assertion Prof. Dan Seni made in the last edition of Value World, that the concern of VE and VM is not “value” per se, but of “technical value” produced by the efforts of organizations.

The first paper in this edition, by leading Portuguese value manager Manuel Teles Fernandes, discusses “value” in a strategic setting and offers a way to engage leaders in conversations about strategic value.

The second paper examines how global manufacturer ITT assesses value and tracks progress through a stage gate process. The Swedish authors, Jonas Klang, Per Lindstedt, and Jan Burenius, also discuss the way an organization works and how that shaped the way they designed their service line. I saw that as recognizing the customer’s situation defines the way they determine the value of proposed consultancy methods.

The third paper from Garance Bundel and Marc Maeseele, who work as Value Managers in Royal Dutch Shell, provides us with an insight into how “value governance” is achieved within large organizations with many projects all seeking to maximize value. This paper seems to complement the previous papers in this edition of Value World as it straddles the gap between enterprise agenda and project imperatives.

The final paper by Jorge Alexandre, Anabela Maia, David Camocho, Fátima Rodrigues, João Henriques, and Justina Catarino, looks at “sustainability”. For me, long term strategies become dominated by questions of moral value in addition to economic and financial value, as the weighting we give choices today influences the outcomes which become the predicament we’re in some time in the future. The authors start a discussion about measuring value in the context of sustainability and I hope this leads to a special interest group setting up a project to arrive at a global position that all value societies endorse.

As always, I hope that Value World brings reading that enthuses.

Best wishes

Dr Roy M. Woodhead
VP Education, SAVE International®
Executive member of the IVM
Director of Society of Organisational Learning UK

EDS - Consulting Services
Hartley House
15 Bartley Wood Business Park
Bartley Way
Hook
Hampshire RG27 9XA
UK
email: roy.woodhead@eds.com
Fall 2007 Vol 30, Issue 3
THE IMPORTANCE OF “VALUE” FOR BUSINESS STRATEGIC MANAGEMENT
By Manuel Teles Fernandes

The Alignments and Paradoxes Model (MAP) comprises six matrixes: the Market; the Value; the Effort; the Product Margin; the Potential Profi t; and, the Strategy. The intra-relation between all of them provides an integrated view of any business. The model allows managers to understand the market potential and the product potential by analysing the perceived value by the consumer, the needed effort to produce the product or service and the potential volume of the business. It also allows managers to create scenarios and evaluate different potential solutions for any business proposition.
HOW TO DESIGN AND IMPLEMENT A GLOBAL VALUE MANAGEMENT PROGRAM TO DRIVE ORGANIC GROWTH
By Jonas Klang, Per Lindstedt, and Jan Burenius

ITT Industries is a $7.4 billion diversifi ed manufacturer with approximately 40,000 employees globally. The company’s Management System is built around several value-based tools, all designed to help the company make decisions, improvements and products that directly support its business goals. One of these value-based tools is Value-Based Product Development (VBPD). The goal of VBPD is to drive organic growth through new product offerings with unrivalled customer value. VBPD was launched in 2000 and has helped ITT move up the list of premier multi-industry companies in terms of new product sales measured as a percentage of overall sales.
INCREASING VALUE OF CAPITAL PROJECTS THROUGH COMBINATION OF CONVERGING AND DIVERGING VALUE EXERCISES
By Garance Bundel and Marc Maeseele

Within Shell there is a drive for increased capital effectiveness. To improve the capital effectiveness it is crucial to assess the project value at several milestones during its development. At these milestones key decisions are made based on the health of the project. On the one hand these key decisions comprise of whether or not it is the right time to develop a project looking at both the market conditions and inter-company competing projects. On the other hand the assessment is made whether or not the project is developed in the right way, by challenging the project (content) deliverables. The company focus is to do the right projects at the right time.
HOW TO MEASURE THE VALUE FROM A SUSTAINABLE POINT OF VIEW
By Jorge Alexandre, Anabela Maia, David Camocho, Fátima Rodrigues, João Henriques and Justina Catarino

Entrepreneurial activities must change when taking into account Sustainable Development paradigm. A new way of evaluating enterprises’ performance which incorporates economical, environmental and social criteria is necessary.