Value curve with_metrics_190914

Value Curves with Metrics
Low High
Perform ance (Nested Value Curve)
Driveability (Nested Value Curve)
Design
Consum er Survey
Quality (Nested Value Curve)
Consum er Reports Ranking
Operating Cost (except fuel)
cost/m ile
Reliability
Consum er Reports
Maintenance Schedule
# /year
Maintenance Cost
Average cost ($/event)
Range/tank (Range/charge)
m iles/tank; m iles/charge
Supercharging stations
# of statiions, Distance between stations, m iles
Brand Recognition
Consum er Survey
Sustainability
Consum er Survey, C Footprint
Life expectancy
K Miles
Purchase Price
$K
Leasing Options
Yes/No
1.0 3.0 5.0 7.0 9.0
Tesla S Sedan Value Curve
1st Draft Value to Consum er
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
8
4
600E
500
na
8
4
250
90
Yes
8.5
99
1
200E
275
200
7
8
1000
90
Yes
BMW 7 Series Tesla S

Value Curve Genesis
 First used by Accor in 1985
 Kim, W.C. and Mauborgne, R.
Value Innovation: The Strategic
Logic of High Growth. HBR Jan-
Feb, 1997. p. 103-112. Reprint
#97108
 Half million reprints
 “House of Quality”?
Copyright Value Innovations, Inc. 2004-2013. All rights reserved 2

Value Curves
Are actionable
As a result project goals are:
 Quantified and
 Very Clear

Value Curve with Metrics
for the Tesla S
Most Important Customer: The
Consumer

Our first Value Curve
Let’s take a look at it, then
We’ll break it down & explain it

Copyright Value Innovations, Inc6. 2004-2013. All rights reserved
Low High
Design
Consum er Survey
cost/m ile
Reliability
Consum er Reports
# /year
Maintenance Cost
Brand Recognition
Consum er Survey
Sustainability
Life expectancy
K Miles
Purchase Price
$K
Leasing Options
Yes/No
1.0 3.0 5.0 7.0 9.0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
8
4
600E
500
na
8
4
250
90
Yes
8.5
99
1
200E
275
200
7
8
1000
90
Yes

On the left side:
Copyright Value Innovations, Inc7. 2004-2013. All rights reserved
Low High
Design
Consum er Survey
cost/m ile
Reliability
Consum er Reports
# /year
Maintenance Cost
Brand Recognition
Consum er Survey
Sustainability
Life expectancy
K Miles
Purchase Price
$K
Leasing Options
Yes/No
1.0 3.0 5.0 7.0 9.0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
8
4
600E
500
na
8
4
250
90
Yes
8.5
99
1
200E
275
200
7
8
1000
90
Yes
 The Elements of
Performance (define
the product, service
or offering)
 Elements are listed in
rank order

Left Hand Side
Let’s look at:
1. What we mean by Elements of
Performance and then
2. Rank Ordering

Element of Performance
Capability or characteristic of the
product or service that it is important
to the Most Important Customer that
can be performed/observed in a
measurable way.
Steve Schacher, Chevron EPMO

In aggregate the Elements define the
service or product. An Element is:
 A succinct statement
 Not an objective
 Not a feature or benefit
 Measurable

Consider:
 Stella Artois developing a new beer
Objective
Feature/Benefit
Improve taste
Tastes great
Taste

Elements of Performance
Limit to 15
 Use Nested Value Curves to achieve
this limit
 Examples of Nested Value Curves
 Performance
 Drivability

Rank Ordering Tools
Tool Description Time to
complete
You rank
(Delphi)
5 to 10 min.
Pairwise
Comparison
(PWC)
Which is the more
important of the 2
Elements?
20-40 min.
Analytical
Hierarchy
Process
(AHP)
What is the relative
importance of the 2
Elements?
1 to 2h.

Copyright Value Innovations, In1c4. 2004-2013. All rights reserved
Low High
Design
Consum er Survey
cost/m ile
Reliability
Consum er Reports
# /year
Maintenance Cost
Brand Recognition
Consum er Survey
Sustainability
Life expectancy
K Miles
Purchase Price
$K
Leasing Options
Yes/No
1.0 3.0 5.0 7.0 9.0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
8
4
600E
500
na
8
4
250
90
Yes
8.5
99
1
200E
275
200
7
8
1000
90
Yes
On the right hand:
 The values to the
Most Important
Customer for each
Element (low value on
left; high value on right)
 Metrics for each
Element allow you to
define absolute
values

Right Hand Side
Let’s look at:
1. Value delivered – you determine
the value range
2. Metrics – You define initially, Most
Important Customers will critique
in Steps 6-7

Nested Value Curves
 Help you to keep # of Elements to 15
or less
 Allow you to drill into Elements like
Quality, Ease of Use

Nested Value Curve - Drivability
1st Draft Value to the Consum er
17
Low High
Acceleration
0- 60m ph, seconds
Braking distance
60- 0m ph, feet
Safety
Crash Testing, Exceeds NHTSA standards; Yes/No
Top Speed
m ph
1.0 3.0 5.0 7.0 9.0
1
2
3
4
Nested Value Curve - Performance
Value 1st Draft to the Consum er
4.7 4
Low High
Road Handling
Custom er Survey, Consum er Report
Stability
Cornering
1.0 3.0 5.0 7.0 9.0
1
2
3
Copyright Value Innovations, Inc. 2004-2013. All rights reserved

Is Tesla swimming in a Blue Ocean with
the S Sedan?
Copyright Value Innovations, In1c8. 2004-2013. All rights reserved
Low High
Design
Consum er Survey
cost/m ile
Reliability
Consum er Reports
# /year
Maintenance Cost
Brand Recognition
Consum er Survey
Sustainability
Life expectancy
K Miles
Purchase Price
$K
Leasing Options
Yes/No
1.0 3.0 5.0 7.0 9.0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
8
4
600E
500
na
8
4
250
90
Yes
8.5
99
1
200E
275
200
7
8
1000
90
Yes

Critique of the Value Curves
occurs in Steps 6-7
 Elements are vetted by the MIC
 Elements are rank ordered by the
MIC
 Metrics are defined for each
Element
 MIC’s vett the metrics

Comparison with Strategy
Canvases
Elements
 Are not rank ordered
 Do not have metrics
 Are not vetted by the MIC

VC Advantages
 Allows a project team to establish
clear project goals based on MIC
input (rank ordering and metrics
enable this!)
 Engages your MIC’s in the process
 Easy to communicate project goals

VC Advantages
 Clear to Management what’s at
stake
 Sorts out the wheat from the chaff
 Takes the Fuzziness out of the
Front End of Stage-Gate

Value Curves used to:
 Look at companies, business models, services,
technologies, processes, products…if there’s a
customer, you can develop a value curve.
 Stimulate the generation of new ideas
 Help idea generators develop their idea
 Communicate with Key Customers and MIC’s
to solicit their input and win their buy-in
 Define the Value Proposition
 Realize much greater value (several X)

Value Curves featured in:
VIP
Step #
Value
Curve
Description
3 “As Is” Your current offering, or, a
competitor’s offering, if you are
not in the space
3 “Closest
Competitor”
or
“Best in
Class”
One product or service; or the
best value delivered by a product
or service for that Element (e.g.,
Toyota Camry, Honda Accord,
Hyundai Sonata)
5 “To Be” Shows the Value you plan to
deliver for each Element (Defines
the “What”)

Value curve with_metrics_190914

More Related Content

What's hot

Viewers also liked

Similar to Value curve with_metrics_190914

Recently uploaded

Value curve with_metrics_190914