Keynote presentation at the Canadian Value Symposium 2017, hosted by Value Analysis Canada, October 16 & 17 at the Château Vaudreuil near Montreal

1. Strategic
Value Management
Michel Thiry
PhD, PMP, FAPM, PMI Fellow
presents:

2. 2 © Michel Thiry, 2017
Presentation Outline
1. Why Strategic Value Management?
2. Deliver value consistently …
in a dynamic environment
3. Examples of Strategic Value Management

3. 3 © Michel Thiry, 2017
1. Why Strategic Value
Management?

4. 4 © Michel Thiry, 2017 From: Thiry, 1997 & 2004
+ –
Satisfaction of
expected benefits
Required resources
(Capabilities)
Expected Benefits
Offered Benefits
Required Capabilities
Available Capabilities
What is strategic value?

5. 5 © Michel Thiry, 2017
Visions of strategic value
Financial
Shareholder Value
Organisational
Stakeholder Value

6. 6 © Michel Thiry, 2017
Lost Value: The Conclusion
“…what senior executives need is a more
balanced approach to strategic decision
making […] and value considerations.”
Booz&Co, 2012: C. Dann, M. Le Merle, and C. Pencavel
http://www.strategy-business.com/article/00146?pg=all

7. 7 © Michel Thiry, 2017
What drives the quality of
decisions?
 Conscious Judgment
 Clarity on how much we are willing to sacrifice
of one value in order to receive more of another
 Sensible Evaluation
 Based on alternatives, available information,
& expressed value at the time of the decision
 Viable Choice
 Options developed from alternatives following
analysis and consolidation of information
 Not all alternatives can become viable options
Adapted from Spradlin, 1997

8. 8 © Michel Thiry, 2017
Key Issues for SVM
 Generate tangible value for the stakeholders
 Achieve sustainability in doing so
 Develop dynamic structures
 Leverage collaborative relationships
 Support business benefits delivery

9. 9 © Michel Thiry, 2017
2. Deliver value consistently
… in a dynamic environment

10. 10 © Michel Thiry, 2017
The Evolution of Value Mgmt
 “Hard” Value Management (VE/VA)
 Quality/Cost Improvement
 Development of better products
 “Soft” Value Management (VM)
 Focus on stakeholder needs/resources used
 Development of better business solutions
 Strategic Value Management (SVM)
 Best use of resources to gain competitive advantage
 Ongoing development of best portfolio of actions

11. 11 © Michel Thiry, 2017
Potential vs. Realized Value
Run the
Business
Transform
the Business
Value
Planning
Value
Creation
Operate
Integrate
Deliver
Formulate
“Track benefits realization past the end of a project
through operations to verify return on investment.”*
* PMI Pulse of the ProfessionTM 2013

12. 12 © Michel Thiry, 2017
SVM Decision Management Cycle
Thiry, 2002-2010
Ideation
Elaboration
Sensemaking
Learning Cycle
(Capture Expectations)
Choice
Strategic
Objectives
Execution
Planning
Control
Performance Cycle
(Deliver Results)
Expected
Benefits
Expected
Outcomes
Proposed
Actions
Proposed
Deliverables
ValueMgmt
StrategyExecution
ProjectMgmt
Delivered
Outputs

13. 13 © Michel Thiry, 2017
Iterative Value Cycle
Strategic
Choice
Choice of
actions
Development
adjustments
Implementation
adjustments
Benefits
Evaluation
Learning Loops
Learning Loop
Performance Loops
Emergent Input
Plan/Execute/ControlFormulate/Organize

14. 14 © Michel Thiry, 2017
Traditional VM Application (VA/VE)Strategic VM Application
Strategic Value Mgmt in Context
Realized
Outcomes
BUSINESS
‘Capability Cycle’
EXTERNAL OR
INTERNAL
Corporate
Strategy
Expected
Benefits
PROGRAM
‘Learning cycle’
Objectives/
Parameters
PROJECTS
‘Performance cycle’
Planning &
Execution
Deliverable
/ Output
Realised
benefits
Strategic
Objectives
Ongoing
Value
Appraisal
Pressure
to change

15. 15 © Michel Thiry, 2017
3. Examples of
Strategic Value Management

16. 16 © Michel Thiry, 2017
VM as a Structured Decision Process
 Sensemaking
 Clarify needs & expectations of stakeholders
(expected benefits / functions).
 Determine & prioritize Critical Success Factors (CSF)
 Ideation
 Seek alternative means of achieving CSFs
 Elaboration
 Develop alternatives into viable options. Focus on benefits
 Decision/recommendation
 Define optimal combination/phasing/pacing of options
 Mastering
 Ensure benefits delivery &
effective response to emergent inputs

17. 17 © Michel Thiry, 2017
Initial Needs Analysis
ECM Initial
Benefits Map
HOW?
(MEANS)
WHY?
(END)
From multiple stakeholder needs and expectations
To initial consolidation and breakdown of needs

18. 18 © Michel Thiry, 2017
Operations
Program
Benefits Map (BBS)
HOW?
(MEANS)
WHY?
(END)
Operational
ImprovementBusiness Value
Vision
Strategic
Objective
Benefit Outcome Output Capability
Strategy
Grouping into Projects

19. 19 © Michel Thiry, 2017
Example of BBS: Entr. Data Mgmt

20. 20 © Michel Thiry, 2017
BBS helps determine Vision and CSFs
Optimize the
contribution of
enterprise content
to Co. success Maintain Business
Continuity (20%)
Provide capability for
business growth (10%)
Improve compliance
(15%)
Mission
Guarantee content integrity and
consistency (25%)
Empower employees to perform
(15%)
Enable organizational
performance optimization (15%)
Enable business continuity &
growth
Objectives
Vision: The right information to the right people at the right time

21. 21 © Michel Thiry, 2017
Evaluating Expected Benefits:
Prioritize CSFs: Paired Comparison
 Develop program specific criteria (weighted CSFs)
 Compare CSFs in pairs sharing 5 points between them
 Calculate total score and adjust on scale of 100
A
B
C
D.1
D.2
D.3
Score
Weight
A-Empower employees to perform 2 1 3 2 3 11 15
B-Enable optimization of organizational performance 3 1 2 2 3 11 15
C-Guarantee content integrity and consistency 4 4 4 3 4 19 25
D.1-Improve compliance 2 3 1 2 3 11 15
D.2-Maintain business continuity 3 3 2 3 4 15 20
D.3-Provide capability for business growth 2 2 1 2 1 8 10
75 100

22. 22 © Michel Thiry, 2017
Ideation
Empower employees to perform (15%) Increase CM skillset
Increase content availability
Improve information access
Facilitate content management
Enable optimization of organizational
performance (15%)
Optimize CM solution architecture
Improve content processing
efficiency
Guarantee content integrity and
consistency (25%)
Ensure content integrity
Improve content consistency
Enablebusiness
stabilityandgrowth
Improve compliance (15%) Improve content classification
Comply with content management
policies
Maintain business continuity
(20%)
Improve conformity
Improve internal collaboration
Support business processes
Provide capability for business
growth (10%
Enable change
Facilitate access to information
Enable external collaboration

23. 23 © Michel Thiry, 2017
Example of KPIs
 Based on weighted CSFs
 Typically report on 1-3 KPIs/CSF
 Measures can be qualitative (approval, agreement,
alignment, etc.) or quantitative (%, #, $/£/€)
Critical Success Factor Key Performance Indicator Measure
Enable optimization of
organizational performance
5 Increased # of automated processes % Increase
6 Reduction of data processing time Automated rec.
Guarantee content integrity and
consistency
7 Increase in level of maturity in EDM # Training
8 Increased number of new templates % Increase
Improve compliance 9 Reduced # of non-compliant docs. # non-compl.
Maintain business continuity 10 Increased number of docs shared % Shared
11 Improvement in data integration with
other business applications
# Increase
Provide capability for business
growth
12 Increased data exchange with exter.
parties
% Increase

24. 24 © Michel Thiry, 2017
Elaboration: Assess alignment of
program components with strategy
Weighted Matrix
 Qualitative assessment
 Score each component
project against each CSF
 Multiply score by CSF
weight
 Calculate total weighted
score for each Option
 Use for decision-making
0 Useless 6 Important
2 Desirable 8 Necessary
4 Useful 10 Essential
Expected Benefits
=OfferedBenefits
CSFA
CSFB
CSFC
CSFD
CSFE
Total
Weight
Option
40 30 15 10 5 100
4 4 6 3 8
160 120 90 30 40 440
7 4 2 5 8
280 120 30 50 40 520
6 7 3 5 1
240 210 45 50 5 550
4 4 3 9 2
160 120 45 90 10 425
2 7 4 6 9
80 210 60 60 45 455
Comp. 5
Comp. 1
Comp. 2
Comp. 3
Comp. 4

25. 25 © Michel Thiry, 2017
Elaboration: Assess achievability
(Outline Level)
Achievability Assessment Factors High/10 Medium/5 Low/2 Score
A. Financial Factors
1 Project cost /total Portfolio budget* ≤ 5% 5-20% ≥ 20% 5 10
2 Expected Return/Benefits Very short-term Short-term Medium-term 2 5
3 Funding (Financial Authority) Internal to BU Other business unit Outside Org. 5 5
B. Parameters & Constraints
1 Resource Availability (FTE Capacity) ≥ 2:1 (200%) 2:1-1:1 (200-100%) ≤ 1:1 (100%) 5 10
2 Type of project (Authority) BU initiated Org. initiated External/Regulatory 5 2
3 Schedule Acceptable/estimated Tight/negotiated Inadequate/imposed 10 2
C. Human Resources and People Factors
1 Spread of Resources All internal Internal + External PM + External 5 5
2 Dedicated workforce (Fulltime) All most Few 2 10
3 Staff Expertise/ experience  Requirements Sufficient  Requirements 5 5
D. Complexity Factors
1 Type of Work/Innovativeness Known New Breakthrough 10 10
2 Interdependency of projects Negligible Significant Essential 2 2
3 Objectives & Scope Well Defined Unclear Undefined 10 10
Score Total /120 66 76
Achievability Score (Total score/120x1000) 550 633
A1 Budget includes actual and committed (pipeline)
B1 Available resources/required resources for program/project in regards of the workload (actual and committed)
C2 Multi tasking generally leads to a lower achievability

26. 26 © Michel Thiry, 2017
Elaboration: Alignment/Achievability
Matrix
Adapted from Thiry, 2003
Set thresholds
HIGH
PRIORITY
> 0.25
Implement
LOW
PRIORITY
< 0.075
Reject
MODERATE
PRIORITY
Improve and
reassess
0.075 - 0.25
VHI 0.90
801-1000
HI 0.70
601-800
MED 0.50
401-600
LO 0.30
201-400
VLO 0.10
001-200
0.03
001-100
VLO
0.16
101-250
LO
0.35
251-450
MED
0.59
451-700
HI
0.85
701-1000
VHI
ACHIEVABILITY
ALIGNMENT (CSFs)
Weighted
Matrix Scores
Achievability
Matrix Scores
0.03
0.02
0.016
0.050.01
0.060.040.016
0.53 0.770.320.15
0.41 0.600.250.12
0.29 0.430.180.08
0.18 0.260.11
0.090.003

27. 27 © Michel Thiry, 2017
Alignment/Achievability Example
2 options:
Size represents cost
Choice between 2 or more
mutually exclusive options
Prioritisation of initiatives
in portfolio or program

28. 28 © Michel Thiry, 2017
Develop responsive value-based
decision management process
 VM is an ongoing, iterative process
 Look for opportunities to improve value
 Regularly reexamine business context and
stakeholders' needs and expectations
 Define ‘gates’ or ‘gateways’ for assessment
of delivery of benefits (use benefits register)
 Ensure any changes address ‘real’ issues
and are based on value criteria
 Focus of VM evolves throughout process

29. 29 © Michel Thiry, 2017
Strategic Value Management
as a Governance System
Formulate
Strategy
Projects & transition activities
Gather Data
Reformulate
Strategy
Strategic Management
Optimise Effort
Clarify
Actions
Collate &
Analyse
Governance
SystemStructureandcommit
Portfolio
Management
Deliver Results
Current governance
processes mostly focus
on bottom of process
Success ensured by
process integration
Program
Management
Define the vision
SVM Activities

30. 30 © Michel Thiry, 2017
Michel Thiry, PhD, FAPM, PMI Fellow
michel.thiry@valense.com
http://uk.linkedin.com/in/michelthiry
www.amazon.com/author/michelthiry
http://www.youtube.com/user/valensepartners?
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