CEOs often face the pressure of simultaneously addressing analysts’ questions about the company’s future while leading execution in-house. Most companies have a large portfolio of strategic projects, but it is often unclear how the projects in the end contribute to the value creation journey the company seeks. Going one step further, very few people among the management typically can quantify what value each strategic project brings, or whether the project has actually resulted in the value creation sought.
Working with our clients we have addressed these issues by introducing a value ladder methodology, that ties together the company’s strategy and overall value creation ambition, the strategic projects, operative budgeting and financial follow-up processes. Leveraging this approach top-down in a holistic manner has proven to have multiple benefits: the overall strategy and value creation path for the company becomes clearer, the priority of various efforts is easier to set, and the goals and results of the projects are more transparent. Most importantly, discussions about strategy and value creation become more focused and to-the-point on all levels, from the Board and the management all the way to the operative frontline.