Framework: Value Creation Wheel

©Luis Filipe Lages

[email protected]
DISCOVER VALUE

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Diagnostic
Main Challenge
KPIs Definition
 Analysis of the situation

Exploratory
Problem definition
Research

Statement of objectives / KPIs

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 Which tools/frameworks shall we use?

Problem/challenge: __________________________________________
Phase VCW 1: Which diagnostic tools/frameworks shall I use to address our challenge?
• A
• A
• A
• A
• A
• A
• A
• A
• A

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Phase 1 integrates several models, tools, frameworks and theories
• 5 WHYs • Brainwriting • ANSOFF • Segmentation • 3 Ms
• 5 Cs • Braindrawing • BCG • Targeting • Business
• TOWS • Focus Group • McKinsey • Positioning Model Canvas
• PESTEL • Brainstorm • Cost- • … • Business Plan
• Porter 5 • Design Think. Benefit • Pitch
Forces • … analysis • …
• … • SMART
• …

• Brainwriting
• Focus Group • B2B –
• Interviews RELPERF
• Surveys Socrecard • SCAMPER
• Lag-user • Bal. • Poster
method Scorecard • Samples
• … • … • …

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 Analysis of the situation
5C Analysis Analysis of Micro and Macro Forces
Internal
Situation

External
Situation

Source: Dibb et al. (2005)

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 Analysis of the situation
- Competition analysis (Porter’s 5 Competitive Forces)-

Michael Porter’s Interview:

https://youtu.be/mYF2_FBCvXw

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 Analysis of the situation
- Company -

Vision: Mission:
A view of what the organization wants to A declaration of the current goal or purpose
become. Describes how the future will look if of an organization. Explains the current
the organization achieves its mission. reason for being.
A vision should: A mission should:
• be simple and idealistic, • be a clear and concise statement,
• appeal to core values,
• guide the organization towards realistic
• be challenging but also realistic, objectives.
• serving as a guide.

“CIIM’s vision is to be among the best in Europe” “CIIMprovides an excellent level of

higher education andresearch.”
“The vision of MDH is keeping all “The Minnesota Department of Health
Minnesotans healthy.” (MDH) protects, maintains and improves
the health of all Minnesotans.”

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Analysis of the situation
- Internal & External -

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 Analysis of the internal situation
SWOT: Analysis of Strengths/Weaknesses of several departments
Example of HumanResources Other examples:
– Firm’s organization chart
– Definition of job functions Marketing Strengths Manufacturing Strengths
– Number of workers 1. Well known brand 1. Economies of scale
– Selection and recruiting 2. Strong market share 2. Capacity > Demand
3. Reputation for quality 3. Dedicated workforce
– Education 4. Reputation for service 4. On time delivery
• Employees’ level of education 5. Effective innovation 5. Technically skilled
• Firm’s investment in education and training 6. Low input costs Organizational Strengths
– Policies 7. Low distribution costs
1. Strong through leadership
• Remuneration 8. Low manufacturing costs
2. Capable management
• Benefits Financial Strengths 3. Flexible & Adaptable
• Incentives 1. Low cost of capital
4. Speedy responses to
– Wage costs 2. High profits
change
3. Stable finances
– Relationship with other departments
• Communication procedures
• Speed and quality of shared information
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 TOWS Matrix

Maxi-Maxi Strategy Maxi-Mini Strategy

Strengths can be used to Strengths in the
capitalize or build upon organization can be used
existing or emerging to minimize existing or
opportunities. emerging threats.

Mini-Maxi Strategy Mini-Mini Strategy

The strategies developed The strategies pursued
need to overcome must minimize or
organizational overcome weaknesses
weaknesses or emerging and, as far as possible,
opportunities are to be cope with threats.
exploited.

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Think about your biggest weaknesses at work and in life.
Of the following list, look carefully and choose the three
weaknesses that resonate most with you:

1) Disorganized
2) Inflexible
3) Stubborn
4) Inconsistent
5) Obnoxious
6) Emotionless
7) Shy
8) Irresponsible
9) Boring
10) Unrealistic
11) Negative
12) Intimidating
13) Weak
14) Arrogant
15) Indecisive
16) Impatient
Next, look at the below list, find the same 3 weaknesses, and look
at the traits to the right of each of your 3 biggest weaknesses:

1) Disorganized ---> Creative

2) Inflexible ---> Organized
3) Stubborn ---> Dedicated
4) Inconsistent ---> Flexible
5) Obnoxious ---> Enthusiastic
6) Emotionless ---> Calm
7) Shy ---> Reflective
8) Irresponsible ---> Adventurous
9) Boring ---> Responsible
10) Unrealistic ---> Positive
11) Negative ---> Realistic
12) Intimidating ---> Assertive
13) Weak ---> Humble
14) Arrogant ---> Self-Confident
15) Indecisive ---> Patient
16) Impatient ---> Passionate

To the right of your 3 weaknesses are your 3 strengths.

 Take-aways

Hidden in your weaknesses are your strengths.

Every weakness has a corresponding strength.

Instead of trying to change your weaknesses:

1. accept them.
2. embrace your strengths.
3. build upon your strengths as they will get
you far in your career and in life.
 Analysis of the situation
- External -

Political Economic Social Technological Environmental Legal

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 Problem definition

“The formulation of the problem is often more

essential than its solution.”

Albert Einstein

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Problem definition

Lages (2016), Journal of Business Research, 4849 –4855

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Problem definition
- Type of problems -

http://www.1000ventures.com/business_guide/crosscuttings/problems_4types.html

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 Problem definition
- Cause & Effect Analysis (CEA) -

C ause & Effect Analysis (CEA) was

developed by Kaoru Ishikawa in the
1960s.
This diagram-based approach, also
know as the “Fishbone Diagram” is used
for thinking through all the possible
causes of a problem.

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 Problem definition
- Cause & Effect Analysis (CEA) -
Step 1: Define the problem. Step 3: What are the causes andsub-causes?
For example: “A manager ishaving problems with an uncooperative
branch office.”

Step 2: What are the major factors involved?

Step 4: Analyze the final diagram and all thecauses

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 Problem definition

The 5 Whys
5 Whys was developed by Sakichi Toyoda in the 1930s.
It became popular in the 1970s and Toyota still uses it today.
It is used to find the origins of a problem.

Root Cause:
The fundamental reason for the occurrence of a problem.
Root
This cause is within the control of the key decision maker(s).
Cause
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 Problem definition
- 3Ms Analysis -
Manpower
Every plan/project must include
three key resources: the 3Ms

Minute Money

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 Statement of objectives
Objectives can be defined in the:
• Short, medium and long run.

Types of objectives:
• Business level
o Quantitative: profit, volume, sales, market share, costs,
o Qualitative: perception, image/reputation, customer service, employees satisfaction.

• Department level
o Determined by each department based on organizational vision, mission and company
objectives.
Source: Kotler (2000)

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 Statement of objectives

S M A R T

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Statement of objectives
- Examples -

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What is the difference between
an objective and a KPI?
 KPIs – Key Performance Indicators
What’s the difference between an objective and a KPI?
KPI: the measures that tell you if you are on the way to
Objective: what is expected
achieving your objective or not. They are indicators and
to be achieved.
they give you an indication of what is going on.

Types of KPIs: https://www.youtube.com/watch?v=PID6_YlBjMk

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KPIs – Key Performance Indicators
- Examples -

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KPIs – Key Performance Indicators
- Examples -

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 KPIs – Key Performance Indicators
- Examples -

see: “The 25 KPIs Every Manager must Know”: https://www.bernardmarr.com/default.asp?contentID=1003

see: “The 75 KPIs Every Manager must Know”: https://www.bernardmarr.com/default.asp?contentID=1005
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Phase 1 – Discover Value
DEFINE
Diagnostic
Main Challenge
KPIs Definition

38
Phase 1 integrates several models, tools, frameworks and theories
• 5 WHYs • Brainwriting • ANSOFF • Segmentation • 3 Ms
• 5 Cs • Braindrawing • BCG • Targeting • Business
• TOWS • Focus Group • McKinsey • Positioning Model Canvas
• PESTEL • Brainstorm • Cost- • … • Business Plan
• Porter 5 • Design Think. Benefit • Pitch
Forces • … analysis • …
• … • SMART
• …

• Brainwriting
• Focus Group • B2B –
• Interviews RELPERF
• Surveys Socrecard • SCAMPER
• Lag-user • Bal. • Poster
method Scorecard • Samples
• … • … • …

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 Which tools to use?

Problem/challenge: __________________________________________
Phase VCW 1: Which diagnostic tools/frameworks shall we use to address this challenge?
• A
• A
• A
• A
• A
• A
• A
• A
• A

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Problem definition

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 Develop the challenge

1. Apply the diagnostic tools

2. Validate the challenge via Cause Effect Analysis / 5 Whys Analysis,
3. Define expected KPIs (including 3Ms resources),
4. Define which stakeholders to involve.

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