In the extended metaphor “The Allegory of the Cave,” Plato describes chained prisoners who can see only shadows without context or explanation cast upon a wall before them. This viewpoint means the prisoners create a reality based on limited information.
In the business world, we must avoid basing our realities on limited information to best perform our primary activity: driving value in our organizations. Yet, like the prisoners, we cannot always readily see a clear cause-and-effect between decisions we make and the value those decisions add. How should we evaluate our actions and choose those that are most likely to deliver value? How do the different layers within our organizations interact to create value?
To obtain answers to these questions, you must understand exactly what drives value in your organization. Performance measurement plays a key role because it aligns the many individuals within the company toward a common goal—a shared reality. Recognizing how performance metrics and management contribute to your primary goal can then help you identify short-, medium-, and long-term value drivers. However, different levels of the organization require different performance measurements and have different drivers, so you must gain an overall understanding of how each level relates to and interacts with the others.
For example, you must keep in mind that financial performance—such as the return on invested capital—is just one shadow on your value-driver wall. You must also consider nonfinancial value drivers such as employee morale because they act as leading indicators of future performance. As with the single prisoner released from Plato’s cave who went out into the world and then returned to broaden the viewpoint of his fellow prisoners, you must then synthesize the knowledge you obtain to organize your value drivers and create transparency throughout the organization. Your recognition of the various perspectives will help you make stronger decisions and become a leader for process improvement within your organization.
How well can you see beyond the shadows to lead the way toward greater achievements for your business? The Accenture Academy course Exploring the Drivers for Value Creation identifies important value drivers, demonstrates methods to organize them, and offers insight into industry-specific value-adds to help you become a greater asset to your organization.