The four value chains I’ve identified really are four fundamental value chains which are part of most private sector businesses (public and voluntary organisations will have a slightly different business strategy map and therefore a different combination and / or sequence of value chains.)
This will be a surprising conclusion for many - Porter’s value chain is so well known there’s a tendency to think this is the only value chain around. Well it’s not. So I hope I’ve made a solid case for the existence of the customer, business excellence and organisation value chains. But if not, I don’t mind too much - which the exception of the organisation value chain, it won’t hinder your ability to engage with what’s coming.
But I do want you to feel comfortable with the organisation value chain. Firstly, because it’s important, and secondly, because a lot of my later articles will build upon it.
So, if I haven’t convinced you so far, here’s another piece of support. On your way home, take a look at any book that’s been published by Kaplan and Norton on the business strategy map or balanced scorecard. Select any of the diagrams on either of these two tools and most likely you’ll see lots of arrows between objectives or measures in the operations, customer and financial perspectives of the strategy map or scorecard, but you won’t see any connections drawn between learning and growth and anything else.
Why is this? Despite what some of our critics may suggest it doesn’t mean that HR is disconnected from the business, it means it’s hyper connected to everything else.
Take a look at my post where I introduced the strategy map and you’ll see the same thing. The first objective at the bottom, enhance employ skills, isn’t show connected to anything above. Well duh!, it’s because better skills will enable every single objective above it.
The reason for this hyper connectivity is that we’ve just jumped across two value chains - the organisation value chain creating organisation capability and then the business value chain creating financial success. The outcomes from one informs all the activities in the next.