Priorities in the Business Strategy Life-Cycle: Phase 3: Value-Streams

Remember* [see end-note].

Once the Phase 2 priorities have begun to settle and the organization has a modicum of operational stability and revenue, the organization must turn to refining the value streams and making them as lean as possible if they desire to make maximal profit, and to remain maximally competitive.

A value-stream is defined as the set of resources, actions, inputs (technological and informational) and burdens that occur in the production to create value for the value-proposition.

While survival and establishing a viable enterprise is priority in Phase 1, and operational stability and growth are the priorities in Phase 2, it is only natural for the enterprise to focus on the efficiency and effectiveness of the value streams in Phase 3.   This is the time to examine the varying ratios of value-adding, value-enabling, and non-value adding actions and costs.

General management must oversee value-stream refinement; data-mining, analysis, and value-stream improvement activity can be led by mid-level managers and transformation experts.

If the enterprise has multiple products (and value-streams), a parallel priority is the alignment and coordination of the value-streams to eliminate waste and create synergies.  This priority must be thoroughly managed by executive functions, as only they have equal ownership of all value-streams so that they can see beyond parochial agendas to make decisions that are best for the enterprise as a whole.

While the relative stability provided by successful transition through Phase 2 provides opportunity to refine the value-streams, the growth of the organization creates complexity in the human system that also must be addressed.  Thus, executives find they must work harder on the cultivating leadership coherence in hierarchical chain of command, and a self-referencing high-performance culture throughout functional work groups.

Please see posts on “Leadership Coherence” and “High Performing Culture.”

* Remember, that each organization is unique, as is its marketplace conditions.  The phases that are described in these posts can be transitted concurrently, or in somewhat different order than the stated generic model.  For instance, a high-tech company may have to think through the value-stream in Phase 1 in order to have a viable business-model that depends on delivering with such efficiency within the value-stream that a “value-price’ becomes a key differentiator.  Or, Scalability of a value stream may become a major factor in Phase 2 due to the need to assure stabile operational processes during sudden growth so concurrent prioritiy may be placed onValue stream refinement.

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