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Create success with Value-Oriented Management
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Create success with Value-Oriented Management
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Money is not the driver of success

In corporations, it seems that making money is more important than creating value. These two concepts are not two separate things; however, they cannot be considered synonyms either. Value is a broad notion for clients, employees and suppliers alike. People are usually motivated by more factors than money alone. So when it comes to managing organisations we should not narrow down our focus on financial aspects only.

 

According to the vision of VBM Partners, Value-Oriented Management (VOM) is oriented on creating value for all stakeholders in the long term by stimulating entrepreneurship in organisations. Nowadays innovation based on a systematic process is a must for many organizations. This requires a new approach to management in which strategy and performance management are connected with each other via the innovation process.

 

VBM Partners was established in 2009 by Edward Koops to help organisations (re)discover their sources of value creation, build on them and strengthen them though innovation. At first Value Based Management seemed the right concept, but as the focus is often purely on measuring value in money terms, it usually results in practise in management decisions that are too much biased towards profit maximisation on the short term. For this reasons VBM Partners introduced the new Value-Oriented Management framework, which focuses on strategy, innovation and performance management and their interplay. This means successfully initiating, preparing and executing innovation projects that should lead to the realisation of the strategy of organisations.

Value gets created through cooperation

During the last decades rising complexity and uncertainty have made decision making increasingly more difficult, amongst other things due to increased market dynamics and globalisation, advancing technologies, new legal requirements and changing demands in the area of corporate social responsibilities, for instance related to the environment or sustainability. How do you make sure that in your decisions you have taken into account all relevant aspects? Have you paid enough attention to uncertain developments which might have an impact on your assumptions? During the whole value creation process many decisions are being made which can have a major impact on the end result. What can possibly go wrong is illustrated in the figure below.

An important success factor for value creation in organisations is to what extent management cooperates well in decision making. Value-Oriented Management is for 20% about numbers and for 80% about realising behavioural change of employees, clients and suppliers. For this reason VBM Partners stresses in its vision and way of working the importance of transparent decision making processes, in which all stakeholders are involved who will be impacted by a forthcoming decision. The expression ‘success has many fathers’ has certainly an element of truth in it!