2.2 – Establishing Value-driver Weights

By establishing a value-driver tree, you have transferred your strategic intentions into operational key targets. However, establishing a laundry list of what you must “get right” does not tell you the relative importance of each of those items. This can be achieved by establishing a value-driver’s relative “weight” in accordance with its importance to realising your business strategy.

The weight of all value-drivers should in combination add up to 100%. As you establish value-drivers, it is not uncommon to come up with quantities greater than the suggested 8 to 12. You may set some value-drivers to weight of 0 in order to keep the number of targeted value-drivers for the following prioritisation activities between 8 and 12. It is recommended that you document these zero-weight value-drivers, as they may become more important if the strategy or business environment change. Figure 2 also shows the weights of value-drivers. Note that figure 2 is an excerpt from a value-driver tree, and thus not all value-drivers are shown.

A practical approach to define those weights is a weighting exercise among the key stakeholders. Each one may get, for example, 8 votes that can be distributed across the value-drivers. The number of votes per value-driver can then be converted into the weights.