To apply CVA in practice, start by visualizing your organization as an ecosystem of interdependent business functions like those shown in Figure D below.
Figure D: Example of an organizational ecosystem, adapted from Highsmith, Lu, Robinson
In order to make the principle work, you’ll need each function within the ecosystem to adopt the CVA principle and mindset.
On the leadership side, this means integrating CVA into the executive vision so that each of the other components in the ecosystem can build on it. Here’s an example of a CVA driven vision from Amazon:
“To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.”
Next, use the business strategy to further elaborate on the vision and articulate how the organization intends to move forward by leveraging its unique sources of power and finite resources and energy to deliver on the vision. By way of example, one organization may decide that their best course of action is to defend their current lines of business while another may choose to disrupt an existing market.
What’s important is that the business strategy ladders up to the executive vision and is centered on creating value for customers, as well as building adaptive capabilities which have potential to mutually benefit customers and the business.
Note: in this context, “customer” encapsulates both external and internal users of any product, service, platform or system used by clients, employees, partners and vendors
Finally, in the portfolio function, the business strategy is distilled even further into time-based, incrementally-funded, hypothesis-driven customer outcomes known as “bets”, which are continually re-prioritized based on business value.
On the execution side, the product function or team pairs with the delivery function/team to transform portfolio “bets” into discrete portions of ‘thin-sliced’ work that can be delivered iteratively and evaluated by measures of success that align with the broader executive vision and business strategy.
Lastly, within the measurement function, there is a continual focus on learning to measure customer outcomes using actionable leading indicators to create strategic insights that guide investment decisions.