KVA - Key Value Areas

• EBM provides a set of perspectives (called Key Value Areas (KVAs)) focused on different aspects
  • value
  • the ability to deliver value
• Focusing on these 4 dimensions, enables organizations to better understand where they are and where they need to go
• CURRENT VALUE (CV)
  • current state of the organization relative to those goals
  • PERSPECTIVES ON value
  • Delivering business value
  • What value is currently delivered by the organization?
  • MAIN:
  • The value that the product delivers today (at the present time)
  • it considers only what exists right now, not the value that might exist in the future
  • Questions that organizations need to continually re-evaluate for current value are
    • 1. How happy are users and customers today? Is their happiness improving or declining?
    • 2. How happy are your employees today? Is their happiness improving or declining?
    • 3. How happy are your investors and other SH today? Is their happiness improving or declining?
  • Considering CV helps an organization understand the value that their customers or users experience today
  • Example
    • profit, one way to measure investor happiness, economic impact of the value that you deliver
    • customers are happy with their purchase, tell you about where to improve to keep those customers
    • If customers have few alternatives to your product, you may have high profit even though customer satisfaction is low
    • Considering CV from several perspectives will give you a better understanding of challenges and opportunities
    • Customer and investor happiness also do not tell the whole story about your ability to deliver value: Considering employee attitudes, ultimately the producers of value. Engaged employees that know how to maintain, sustain and enhance the product are one of the most significant assets of an organization, and happy employees are more engaged and productive
• URNREALIZED VALUE (UV)
  • the goals of the organization
  • PERSPECTIVES ON value
  • continually make progress toward their long-term goals
  • what is the potential value that could be achieved?
  • MAIN:
  • potential future value that could be realized if the organization met the needs of all potential customers/users
  • helps to maximize value over time
  • the satisfaction gap between a beneficiary’s desired outcome and their current experience
  • gap between their current experience and the experience that they would like to have
  • represents an opportunity; this opportunity is measured by Unrealized Value.
  • Questions that organizations need to continually re-evaluate for UV are
    • 1. Can any additional value be created in this market or other markets?
    • 2. Is it worth the effort and risk to pursue these untapped opportunities?
    • 3. Should further investments be made to capture additional Unrealized Value?
  • The consideration of both CV and UV provides a way to balance present and possible future benefits
  • Strategic Goals are formed from some satisfaction gap and an opportunity for an organization to decrease UV by increasing CV
  • Example
    • low CV, because it is an early version being used to test the market, but very high UV, indicating great market potential. Investing to try to boost CV is probably warranted, given the potential returns, even though the product is not currently producing high CV
    • high CV, large market share, no near competitors, and very satisfied customers may not warrant much new investment; cash cow product that is very profitable but nearing the end of its product investment cycle with low UV
• TIME TO MARKET (T2M)
  • responsiveness in delivering value
  • the ability to deliver value
  • respond to change
  • How long does it take to deliver new value?
  • HOW LONG TIME TO DELIVER POTENTIAL VALUE?
  • MAIN
  • The organization’s ability to quickly deliver new capabilities, services, or products
  • The reason for looking at T2M is to minimize the amount of time it takes for the organization to deliver value
  • Without actively managing T2M, the ability to sustainably deliver value in the future is unknown
  • Improving T2M helps improve the frequency at which an organization can potentially change CV
  • Questions that organizations need to continually re-evaluate for T2M are:
    • 1. How fast can the organization learn from new experiments and information?
    • 2. How fast can you adapt based on the information?
    • 3. How fast can you test new ideas with customers?
  • Examples to improve T2M
    • Reducing the number of features in a release can dramatically improve it: the smallest release possible is one that delivers at least some incremental improvement in value to some subset of the customers/users
    • removing non-value-added activities from product development & delivery process to improve T2M
• ABILITY TO INNOVATE (A2I)
  • effectiveness in delivering value
  • the ability to deliver value
  • sustain innovation over time
  • how effective is our organization at improving value?
  • HOW MUCH NEW VALUE WE CAN POTENTIALLY DELIVER?
  • MAIN:
  • The effectiveness of an organization to deliver new capabilities that might better meet customer needs
  • The goal of looking at the A2I is to maximize the ability to deliver new capabilities and innovative solutions
  • Organizations should continually re-evaluate their A2I by asking
    • 1. What prevents the organization from delivering new value?
    • 2. What prevents customers or users from benefiting from that innovation?
  • Improving A2I helps an organization become more effective in ensuring that the work that it does improves the value that deliver
  • Example
    • A variety of things can impede an organization from being able to deliver new capabilities and value
      • spending too much time remedying poor product quality
      • needing to maintain multiple variations of a product due to lack of operational excellence
      • lack of decentralized decision-making
      • inability to hire and inspire talented, passionate team members
      • ALSO:
      • lot of time in unproductive meetings
      • developers constantly
        • interrupted
        • switching from one task to another
        • switching from one team to another
    • As low-value features and systemic impediments accumulate, more budget and time is consumed maintaining the product or overcoming impediments, reducing its available capacity to innovate
    • In addition, anything that prevents users or customers from benefiting from innovation, such as hard to assemble/install products or new versions of products, will also reduce A2I