What is VCM?
Value-Centered Management™ is a business management philosophy designed to help businesses focus all efforts on what their customer’s value and provide that value seamlessly through smooth flowing operations and a unified culture.
Lean Fundamentals
The Lean Fundamentals lay the foundation for the value-centered enterprise. Before we can move forward in establishing the 3 Pillars of the value-centered enterprise we must first understand five key things:
- How to create a stable company environment through the proper use of visual controls and effective workplace management standards.
- How much time is involved in and around all processes that take place within our operations as we work together in harmony to provide value to our clients.
- How to identify the non-value activities that are taking place within each of your processes; while developing strategies for eliminating non value in an effort to maximize value and create new capacity.
- How to reallocate resources to utilize available capacity to create new opportunities for delivering value to your customers.
- How profit can be increased through a continual pursuit of cost reduction that leads you to explore more efficient ways to deliver value.
Customer Value
At the cornerstone of value-centered management is the fact that we must truly understand customer value. We must establish a system to properly assess what our customer values and communicate that this value is available in an irresistible fashion. Listening to the voice of our customers we must evaluate every part of the enterprise and teach all team members to work effectively to contribute to what the customer is asking for.
After truly understanding what our customer is asking for we must also understand how and when they want it delivered. All of this is understood by simply analyzing two types of demand which are:
- Value-Added Demand
- Non-Value Added Demand
Understanding the normal and abnormal demands of our clients is the secret to aligning our organization’s to ensure they fulfill these vital business needs. In the value-centered enterprise we are able to reduce the cost and work associated with trying to guess what our customer’s truly desire. By setting up focused efforts to listen to what our customer’s are really saying and specialized systems to align what they are saying to specific processes that can do something about it, customer satisfaction becomes automatic.
Business Culture
At the heart of the value-centered enterprise is its unique approach and philosophy towards business culture. Value-centered management teaches us that true business culture must create an environment conducive for a team to provide an uninterrupted flow of value to their customers. We must understand the power of attitude and the impact of team-centered behavior. It is mandatory that any organization utilizing value-centered management promote the 7 Cultural Commitments among all team members, which are:
- Attitude Control
- Identifying and Strengthening Individual Weaknesses
- Positive Thought Process
- Effective Communication
- High Tolerance Level
- Ability to Bounce Back
- Respect for Authority
After getting a commitment, value-centered team members begin to move deeper into the culture by establishing cultural improvement systems. In the value-centered enterprise the focus is not continuous improvement instead the focus is cultural improvement systems. In essence, improvement must be built into the culture and implemented systematically.
Finally, value-centered culture cultivates leaders while empowering team members. In the end value-centered culture will equip our businesses with a team that understands how to identify and deliver value to one another, resulting in the seamless delivery of value to our customers with outstanding service.
Value Stream Flow
Once we have identified value and developed a strong team culture with a heart for each other and the customer, we must ensure there are operations that can deliver this value with great precision. The concept of lean flow is built on proven methodologies that focus on eliminating non-value activities in order to maximize the flow of value-added activities across the organization.
It is critical to identify all of the value streams that exist in the organization and utilize lean solutions to create an environment in which value can flow with great speed, at low cost, and with great accuracy. By organizing work based on the needs of the customer and lean principles the business can meet all of its demands while continually reducing cost and creating additional resources.
Utilizing lean flow we come to understand that all work across the organization must be to meet a requested demand of our clients to ensure our activities are value-centered in nature. All operations must be synchronized to move together in harmony while keeping superior quality a mandatory ingredient. By removing all of the barriers that would inhibit the smooth flow of value we are able to ensure value flows to our customers with minimal waste and with optimal service.
Structure & Strategy
The Value-Centered Enterprise is protected by its strong structure and its ability to keep its strategic direction focused on the customer. The value-centered enterprise does not measure itself by the traditions of the past; instead it measures itself by the responses and requests of its customers in an unwavering manner. The value-centered enterprise is an upside down organization that places its most senior leaders at the bottom of the organization where they provide foundation and strength to the business. Those leaders and team members that are nearest to actually touching or communicating with the customer are at the top of the organization, where the customer is located.
Strategically, we must understand that it is extremely difficult for traditional businesses to truly be value-centered because they are based on several departments (key word depart) and divisions (key word divide) that are all seeking to prove their worth to the organization. In addition, each department often seeks to ensure it maximizes all tools, activities, and transactions associated with their business function while being absent of how to work together to properly serve the customer.
By moving from traditional departments to value-centered service teams that work in harmony to meet the customer’s needs, we begin to structure our organization’s to be successful at the highest level. Utilizing new measurement systems, planning tools, and financial management methods, the value-centered enterprise is poised to exceed its competition.
