Value chain as a basis of critical success factor analysis

A while ago I wrote about strategy execution and mentioned a method I’ve been using for a while. Last week I was asked how to choose factors that will make a difference?

One very good option is to draft a detailed value chain describing all the phases of your markets. It can be based on Michael E. Porter’s generic value chain, but as said, detailed enough to illustrate your markets and steps of your business.

After illustrating the value chain, you have to point out the most important issues to successfully serve customer needs in every step. Depending on the number of phases you may come up with 30-50 important issues. Big number of important issues is not bad at all. Actually, it is quite healthy not to be too critical at this point – filtering comes later.

Next task is to identify factors, where you really have to excel in order to add value. These are the critical ones. You may come up with 5-7 critical success factors that really make a difference. It is good to notice, that all of your competitors are in the same value chain, and may also have pointed out the same critical factors. Therefore differentiation in operative decisions has a great importance. The devil is in the details.

Using value chain analysis has at least two very clear advantages. 1) You focus only to core of your business and 2) You focus to points that add value for all stakeholders in the value chain.

Update July 2, 2009: This recent post is related to the topic above.

Stockholm Marathon 2008

Last weekend I participated the Stockholm Marathon. And what a struggle it was! The temperature was about +25°C during the race.

At the half way (21.1km) I was running about 4:00hr pace, but marathon is a 42km race and I learned it very quickly after half way. At 26km my right leg started to have minor cramps which made me to slow down the speed. Few kilometers later they were more than minor. Just about that point our team coach gave a great and very straightforward advice: “Don’t whine, just run the full speed ahead!“. Heikki was right, whining will not help at all, only pushing forward. All in all, it took 4hr and 23 minutes to reach the finish line.

Though the time wasn’t even close that I was planning in the winter, I’m still very happy. Moving to a new environment and increased travelling made my exercise too irregular. So, running the race through was a great achievement itself.

Other thing that made me really happy was our great support team that helped us during the whole race. Also mainly Swedish and Finnish audience gave a lot of extra strength all the way through. At the 30km point I wasn’t so sure shall I ever run another race, but all the cheers and all the people at the last 2km made me confident that this my kind of sports and I love it.

So, thanks for the great feeling I’m now already planning new races to participate.

Photos on Kakupi’s team and head coach by Clara.