A road map for the value chain

AN enterprise’s focus on its external value chain must lead to identification of “low-lying fruits” that can be harvested with relatively little effort over a short period of time (say, a year at most). To help in such a harvest, a few external players need to be brought into the fray. No formal alliance with these other external players may need to be forged in the beginning. But clearly, the culture of working together for the common benefit of everyone in the value chain is being initiated.

It is the hope — and expectation — of the enterprise’s officers and members of a select committee of the enterprise’s MSGC that the initial harvest of “low-lying fruits” would give the few external players involved a taste for, and a positive experience e of, working together, in solidarity, to strengthen the seamlessness and possible competitiveness of the external value chain. Such positive experience may lead them to train their ambition over the longer-term horizon.

In other words, the small group of external players, belonging to the same value chain, can ask: what must we do together in order to further develop, and make even more competitive, our value chain? Who would be the other relevant players to bring in? What program can we formulate and pursue together such that in the course of a well-defined period, we can have the value chain that is more in keeping with our joint dreams and expectations?

These are the usual questions that have to be raised and answered in formulating a road map for the external value chain. Perhaps, the road map can be more ambitious; in time, it can cover either the whole industry or even an entire sector. But it is more prudent and advisable to start with the more limited idea of coming up with a road map for the enterprise’s immediate external value chain.

• This initiative can be undertaken under the auspices of a sub-committee or a committee of an industry association or sector grouping. It is a natural add-on to the successful harvest of an initial set of “low-lying fruits.”

• The alliance can cover the initial set of external players, who banded together to harvest the low-lying fruits. However, for the more ambitious follow-up initiative of framing up and actively pursuing a road map, a few other external players may have to be invited and asked to participate. Proper identification of who these other players should be is an important strategic move for the alliance.

• Since a few strategic initiatives would have to be undertaken, with performance measures and performance targets, in time it is essential that a more formal structure has to be set up for the alliance. The structure would enable assignments to be distributed, and a monitoring mechanism to be set up to track actual performance delivered.

The alliance would need to be pragmatic and functional in framing the road map, and arranging for the execution of specific strategies within that road map. While the usual governance disciplines would need to be observed — e.g., a long-term horizon, within which the dream for the external value chain is to be realized; an agreed set of strategic priorities to pursue, with specific strategic initiatives to be undertaken; a distribution of tasks and responsibilities among the different members of the alliance; and a system for performance monitoring is set up — still the road map for the external value chain need not have all the bells and whistles of an enterprise road map. A few bells may not be necessary; and a few whistles may prove to be impractical. Thus, the road map for the external value chain will need to be adapted to its most basic requirements for actually making significant progress in improving the value chain, for the benefit of all.

Who will do this assignment in behalf of the enterprise? The answer is the usual one: a few officers need to be formally tasked to serve in this initiative. Moreover, since this is of such strategic importance to the enterprise, a separate special committee of the enterprise’s MSGC may need to be asked to oversee (and if necessary, bring additional resources and expertise to) the pursuit of this initiative.