Value Management evolved from ‘Value Analysis’ pioneered by Lawrence D. Miles in the 1940’s and 50’s as a method of improving value in existing products.
Illustration of 70.71 Group Structure
The value management approach involves three root principles:
- a continuous awareness of value for the organization, establishing measures or estimates of value, monitoring and controlling them;
- a focus on the objectives and targets before seeking solutions;
- a focus on function, providing the key to maximize innovative and practical outcomes.
Value management as implemented by the 70.71 Group rejects the bureaucratic morass common in many organization.
It also borrows from Warren Buffett, where he wants Berkshire Hathway’s managers to think like owners.
Thus it is important that chief executives have significant stake in the ownership, this enables a climate of confidence and freedom that in turn generates better performance rather than one of suspicion and control.
The Benefits of Value Management:
70.71 Group sees the following benefits arising out of the application of a value management model:
- better business decisions by providing decision makers a sounds basis for their choice;
- improved products and services to external customers by clearly understanding, and giving due priority to their real needs;
- enhanced competitiveness by facilitating technical and organizational innovation;
- a common value culture, thus enhancing every member’s understanding of the organization’s goals;
- improved internal communication and common knowledge of the main success factors for the organization;
- simultaneously enhanced communication and efficiency by developing multidisciplinary and multi-task teamwork;
- decisions which can be supported by the stakeholders.