I’ve been thinking about how we can bring more practical value to our audience. One idea I’m really excited about is a series on tactics—real-world examples of how different organisations create value and how you can apply these ideas to your own organisation.
Our goal is to create a map of value drivers, levers, and tactics that you can draw inspiration from in real scenarios. Whether you’re leading a startup, scaling a business, or managing a team, I want this to be a resource that helps you to drive value.
In this first post, I’ll break down what value drivers, levers, and tactics are, along with examples to bring these concepts to life.
What is value creation?
At its core, value creation is the reason organisations exist, but what ‘value’ means depends on the type of organisation:
- For-profit companies typically focus on creating financial value for shareholders or owners by generating profit
- Startups might prioritise innovative value, creating new products or services that disrupt industries or solve specific problems
- Non-profits focus on creating social value, aiming to make a positive impact in their communities or causes they support
- Government organisations often focus on creating public value, such as providing essential services or improving societal well-being
What are Value Drivers?
Think of value drivers as the core elements that have a direct impact on your organisation’s ability to create value. These drivers are specific to your industry or business model and focus on the areas that generate the most impact. Let’s look at a couple of examples to make this clearer.
Software Provider
If you’re building software for other organisations (my day job!), value drivers might include:
- Revenue growth through increasing user volume
- Revenue growth through effective pricing
Manufacturer
For a company building and shipping physical products, value drivers could be:
- Revenue growth through sales volume
- Increasing operating margins by managing the costs of goods sold
- Increasing operating margins by efficient service delivery
What are Value Levers?
Once you’ve identified your value drivers, you need to understand the value levers—the actions or initiatives that can influence those drivers. Essentially, levers are what you can ‘pull’ to impact your key drivers.
Software Provider
For the value driver of revenue growth through user volume, some potential value levers might include:
- Product development: Adding new features to attract new users
- Marketing: Running targeted campaigns to bring in more customers
Manufacturer
For the value driver of increasing operating margins by managing the costs of goods sold, value levers could be:
- Logistics efficiency: Optimising your logistics to cut distribution costs
- Design & production efficiency: Developing products that are cheaper to produce
What are Tactics?
Now, let’s talk about tactics—the practical, everyday steps you take to implement value levers. Tactics are the specific activities that drive results and bring value levers to life.
Software Provider
For the value lever of marketing, tactics might include:
- Running targeted ads on LinkedIn to attract new users
- Producing blog content to increase web traffic
- Creating a referral program to incentivise current users to bring in new subscribers
Manufacturer
For the value lever of design & production efficiency, tactics could be:
- Negotiating better deals with suppliers to reduce costs
- Outsourcing production to more cost-effective providers
- Redesigning products to use less expensive materials
So what’s next?
I’ll be writing weekly about different tactics organisations use and how these tactics align with value levers and value drivers. The idea is to explain why organisations are doing what they’re doing, and how it creates value for their business. Over time, I’ll build out a detailed map that you can explore to find case studies and insights that may be helpful for your organisation.
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