Step 1: Set Financial Targets
This section helps define the financial goals and timeframe for your organization’s success. Setting clear financial KPIs and targets is key to aligning your strategy with measurable outcomes.
Select your Financial KPI (e.g., EBITDA, revenue, etc.)
Choose the KPI that best represents your organization’s financial focus. This could be EBITDA, revenue, or any other key metric that reflects your growth objectives.Enter Current Financial Data
Input the current value for your selected KPI (e.g., your current EBITDA) and the year associated with it. This establishes a baseline for measuring future performance.Set a Target Financial Goal
Define the target KPI and the timeline for achieving it. For example, if you aim to increase EBITDA to $200M by 2027, enter those values here.Enter Target Multiple Assumption
Specify the multiple you aim to achieve at exit (e.g., 10x). This helps project potential financial outcomes based on current performance.
Why This Section is Important:
This section is critical because it allows you to assess the value at stake and the value at risk for each value driver. It also helps prioritize key organizational capabilities by their financial impact, ensuring that resources are focused on the areas that will yield the highest return on investment.
Step 2: Define Your Value Drivers
Value drivers are the strategic initiatives that directly influence your financial targets. This section lets you break down your goals into actionable steps.
Add a New Value Driver
Click “Add value driver” to add a new strategic initiative (e.g., "Retain and grow existing customers").Specify Objectives for Each Driver
Define the objectives for each value driver. For example, the objective for "Retain and grow customers" might be: "Increase customer retention by 5% by 2027."Estimate Value Driver Contribution (%)
Assign a percentage to each value driver to indicate its contribution to achieving the financial target. The total of all value drivers should add up to 100%.Value at Stake
The system calculates the monetary value at stake for each value driver, providing insight into its financial impact.
Why This Section is Important:
Defining value drivers allows the assessment to be more focused and tailored to the organizational capabilities necessary to maximize each value driver’s impact. This ensures that your strategy is aligned with the specific initiatives that will drive the greatest financial performance.
Step 3: Leverage the AI Assistant
The AI Assistant provides personalized suggestions to help you define value drivers more efficiently.
Click the AI Assistant Icon
Located in the “Value Drivers” section, the AI Assistant offers strategic suggestions based on the data you provide.Refine the AI’s Suggestions
You can adjust the AI’s recommendations to better align with your organization’s goals.
Why This Section is Important:
Using the AI Assistant saves time and provides valuable insights that help refine your strategy. It ensures that your value drivers are aligned with your organization’s needs, speeding up decision-making.
Best Practices for Setting Objectives & Value Drivers
Be Specific: Objectives should be clear, actionable, and time-bound (e.g., “Increase customer retention by 5% by 2027”).
Balance Your Drivers: Ensure your value driver percentages accurately reflect their importance in achieving the financial target.
Regularly Revisit & Adjust: As your business evolves, review and update your value drivers and financial goals to ensure continued alignment with your strategic priorities.
Common Questions
How do I choose the right value drivers?
Start with strategic initiatives that have the most significant impact on your financial targets. Examples include increasing market share, reducing costs, or improving customer retention.
Can I change the value driver percentages later?
Yes, you can adjust the percentages as your business strategy evolves.
What if I don’t have exact financial targets yet?
It’s okay to start with estimates. You can refine your financial goals as more data becomes available.