An Example to Help You


This is a good time to pull out the financial value chains that you created in the exercises for chapters 4 (profit), 5 (position), and 6 (cash). Nonetheless, even if you have created your own financial value chains, it may be easier for you to follow the steps for creating financial value themes if you have an example to follow.

Marcella, the training manager at ABC MediCompany, made a number of changes over the last three years in the contract renewal new hire training for ABC. Some of her changes created great value for ABC; others didn ‚ t create as much. In chapter 8, you saw the impact of Marcella ‚ s assumptions that the value from her interventions would be obvious and indefinitely supported by the managers in her organization. Unfortunately, over the long run, Marcella ‚ s assumptions did not hold up as well as she would have liked .

In chapter 9, Marcella chose to manage her value communication differently. She introduced financial value chains for her intervention and created a financial imperatives scorecard to describe the amount of value she had created for each chain. In chapter 11, Marcella mapped her contributions to the urgent and important of her organization.

To see how Marcella created her value themes, examine Marcella ‚ s financial value chains, which were first introduced in chapter 9. Marcella ‚ s financial value chains are shown in figure 12-3.


Figure 12-3: Marcella ‚ s financial value chains.

In Marcella ‚ s case, all of her value chains use a Senior manager profit measure from the income statement ‚ the CPM ‚ as their starting point. Marcella ‚ s first chain addresses how her intervention helped increase the revenue that goes into the CPM. The next two chains affect COGS and the last affects other sales-driven expenses that are subtracted from revenue to reach the CPM.

Having financial value chains that all affect the same Senior measure isn ‚ t necessarily the case for every situation. It ‚ s possible for multiple Senior measures to be impacted, depending on the intervention. Marcella could also have drawn financial value chains depicting the impact of changes in the contract renewal new hire training on the balance sheet or cash flow statement.

 



Quick Show Me Your Value
Quick! Show Me Your Value
ISBN: 1562863657
EAN: 2147483647
Year: 2004
Pages: 157

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