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Together we build a brighter futureWe achieve breakthroughs by inspiring and connecting people

Value Creation Cycle

Standard sheets

Value Creation

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Value Creation&samhoud

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Achieving breakthroughsWhat is a breakthrough?

Our higher goal is: Together we build a brighter future. Achieving breakthroughs by inspiring and connecting people. But what is a breakthrough?

A breakthrough is all about creating sustainable and measurable value for all stakeholders. It is about starting and maintaining a cycle of success. The Value profit chain is our philosophy on value creation. This means creating sustainable value for all stakeholders:• Financial Value: more profit and a better PE factor• Customer Value: better service, higher customer satisfaction,

stronger connection between the customer and the organization, higher profit per customer

• Employee Value: stronger connection of employees with themselves, colleagues, and the organization linked to a higher performance

• Societal Value: improving connection with- and contributing to society

Achieving breakthroughs for all stakeholders

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Focus on all stakeholders pays outThe financial value of the Value Profit Chain approach

Companies working with a focus on creating value for all stakeholders, not only for the shareholder, but also for the employees, the customers and the society, perform better, especially in the long run. Value Profit Chain- companies even outperform the legendary Good to Great-companies. Comparing the Return on Investments (ROI)* of Standard & Poor’s-companies, Good to Great-companies and Value Profit Chain-companies clearly demonstrates that living this philosophy creates sustainable and measurable value. Also on the financial side.

ROI S&P 500-

companies

ROIGood to Great-

Companies

ROIValue Profit

Chain-Companies

3 year horizon 38% 75% 73%

5 year horizon 13% 77% 128%

10 year horizon 122% 331% 1.026%

Sustainable Value is measurable

Source: Raj Sidodia, c.s., Firms of Endearment, 2007

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&samhoud Definition of Sustainable ValueDefining value

Defining the different stakeholders for whom we want to create sustainable value is not enough. To understand sustainable value, we need more. In defining sustainable value we distinguish three different waves, each of them giving a boost to the value of an organization. Sustainable value means that all three value waves are in place.

Lead the valueThe first wave is about the process of setting the scene for creating sustainable value. It describes the internal underlying potential value. This wave consists of for example: leadership quality, team quality, employee connection to the organization, the vision, business transformation model and the strategy, feeling a sense of urgency or excitement and also the culture of the organization.

Manage the valueThe second wave that is needed to create sustainable value is about making it happen, really executing the strategy and showing performance. This can be monitored by, for example: profit, customer loyalty, customer value, employee productivity and employee connection.

Market the valueThe third wave is about the future expectations from the outside world, the outlook from the external perspective. It contains for example market trust, brand awareness, brand image, reputation, company attractiveness, potential earning capacity and readiness of (IT) infrastructure. The third wave always has some magical and emotional elements.

Sustainable Value Creation

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&samhoud Value Creation CycleThe path to sustainable value

Starting and maintaining value creation comprises the following aspects:

• Mobilise energy: create the energy for change by a sense of urgency and sense of excitement

• Take ownership: let the right people take their responsibility and engage a critical mass to guide the change

• Set direction: create a vision, brand, business transformation model and strategy that will be the fundament for creating value

• Make it happen and improve: make it happen and improve by living the vision and brand and by executing the strategy in day to day life. But also by empowering people in a way that they are able to act

• Inspire others: show and share your success with all external stakeholders, co-create new opportunities

• Change holistically: all these elements have to be enabled and enforced by good leadership, effective teams, a well managed change process and cultural breakthroughs

Value Creation is a never ending activity. The different aspects together make a circle: they reinforce each other, and it starts again and again. Every single aspect is crucial for creating value. The reasons why can be found on the next slide.

The elements in the Value Creation Cycle

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Value Creation CycleThe path to sustainable value creation

Every single element in the Value Creation Cycle is needed

Sustainable value creation

“There is no reason for change”

“Nobody takes responsibility”

“ It is not clear where to go and how to get there”

“We have good plans, but no actions”

“Everyone is doing something, but there is no alignment”

“We did great things but no one knows about it“

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