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Reaching new goals with Value-Based Management

05 Décembre 2017 Par By Arnaud Willems and Mickael Coq
Arnaud Willems, Partner, and Mickael Coq, Director, at Deloitte Luxembourg
Arnaud Willems, Partner, and Mickael Coq, Director, at Deloitte Luxembourg (Photo: Deloitte Luxembourg)

Most business leaders are aware that there is a significant improvement potential within their organizations. Whether we look at operational efficiency, client service level or risk mitigation, even minor improvements can lead to measurable value creation. Why are business leaders then dragging their heels when it comes to implementing operational changes?

Value-Based Management is a different approach to driving a business. The key word is value, and it involves a shift from managing task-oriented teams to inspiring result-driven professionals. The first step of value-based management is to define a clear strategy to increase the value for shareholders and other stakeholders. This strategy is built on pragmatic projects, with concrete actions put in place, leading to measurable results. The strategy is then shared throughout the firm. This shared vision becomes the guiding principle as for how operations are managed, how decisions are made and how operational processes are implemented. All actions, whether minor or major, serve to bring the firm closer to its goals, and create value.

The value-based management approach brings along positive change and measurable results both in the private and public sector, across all industries, services and functions. Value-based management can improve the efficiency, profitability and the overall value of SMEs, small family-owned businesses, start-ups and big organizations alike. It is about keeping the eyes on the prize and everyone’s focus on the organization’s operational and financial objectives. The business goals should therefore not exist separately from the workforce’s own objectives and KPIs, but rather be reflected in performance measurements throughout the organization and allow its professionals to work in the same direction.

The move from traditional management to value-based management involves a full review and diagnosis of the current processes and operations. First, we must identify the quantitative and qualitative improvement potentials, and review all processes to define where efficiency gains can be made. Then, we work closely together with your teams to implement the action plan and improve processes across the organization, making use of recognized methods such as lean management. We apply a participatory approach, and we work in the field to deliver concrete results. This part requires a solid change management and clear operational indicators and reporting tools. Once the objectives have been met, we enter the third phase, which means we ensure the new working habits remain over time.

At Deloitte, we combine our expertise in value-based management with in-depth industry knowledge to respond to the specific challenges and opportunities that apply to you. We can draw on a multidisciplinary workforce, covering a wide array of industries as well as regulatory and technical topics. This makes it possible for us to tailor our solutions to your specific needs. When we take on an assignment to help you improve the operational efficiency and increase the value of your organization, we have common goals. To show you that we are highly committed to reaching these goals, up to 50 percent of our fees depend on meeting the set objectives, in other words, on a happy ending.

To learn more about value-based management, please check out our dedicated webpage.