Strategic Partnering Means Adding Value
I’ve been doing a fair amount of study on creating value over the last few weeks. So, now I can test some of my finding with you, and see what you think. In my searches I came across a lot of support services who speak about creating “strategic partnerships” with the business. I found lots of vague references to “best practices” but actually little as to how these functions would add real value as a business partner. I tend to be concrete, and it really helps me to see practical examples of value added actions. Here’s what I have learned so far.
Value is perceived, and as such you can”t manage it. That’s a very powerful statement. And, I find it irrefutable. What you can manage is Assets. Assets, managed well can add value. So, what are Assets. There are Six categories. They all begin with the letter P. They all exist in the function’s Value Stream, and by working these Assets in a disciplined way, functions can add real value and increase their value as a business partner
Assets:
- People
- Products / Services
- Procedures
- Policies
- Property (Intellectual and Real)
- Price
I also learned about the concept of Wedge Management – the disciplined way of increasing value (and if you are a business and increase in Value means an increase in Revenue! It is a movement away from commoditization!
Below is a picture of the Wedge. To use it, think of one of your Assets, say a particular procedure. Walking through the wedge, it would have Start Value, a certain Wow factor (or not!) It would also have an Identity Value attached to your “internal brand.” Next, your procedure would have Impact Value – its the reason why you created it in the first place. Finally, your procedure would be a way of connecting to your business partners – Relationship Value. Your job in using the wedge is to identify the how your procedure is valued now, and then ask, what actions / initiatives could we take that would increase its value to our “partners.” Pure and simple this is Action Research! It is a very disciplined way of discovering significant areas for improvement, adding value, increasing revenue.
Tomorrow we will talk more about the wedge. For today. Just try to wrap your head around it.
