What is a Lean Value Tree (LVT)?
The Lean Value Tree (LVT) is a tool that helps organizations share and drive their strategy and vision across all levels and teams. It is a lean approach to portfolio management that focuses on value delivery and encourages collaboration. By leveraging visual work properties, the LVT guides decision-making and initiatives that align with the customer value and corporate vision, avoiding wasteful endeavors that waste time and budget.
The LVT enhances Lean Portfolio Management by providing a framework for aligning strategic goals, bets, value streams, and initiatives with customer value and corporate vision. This approach ensures that initiatives are tightly integrated and drive achievement from the bottom up.
The LVT follows a Top-Down framework that starts with the organization's vision and breaks it down into several strategic goals. These goals are then defined into several bets, which serve as the basis for developing value streams and initiatives with specific, targeted outcomes that drive achievement from the bottom up.
Each strategic goal is broken down into a set of strategic bets, representing value hypotheses the organization believes can help achieve the goal. If a bet does not work, it is removed from the tree, ensuring that time and resources are not wasted on something that is not aligned with the corporate vision.
In summary, the Lean Value Tree is a highly effective tool for portfolio management in business agility and strategic agility. It provides a structured and visual approach that enables companies to align their strategic goals with customer value and corporate vision, manage investments, and encourage collaboration and value delivery. Furthermore, the LVT is well-suited to deal with the complexity and uncertainty that often arise in today's fast-changing markets, as it allows organizations to experiment with different bets and initiatives, gather feedback, and adapt their approach to maximize value and achieve their mission. Ultimately, the LVT supports a culture of continuous improvement and learning, empowering teams to innovate and succeed in today's competitive business landscape.
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