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Power Maps – a unique tool for business strategy

Everybody’s agree that satisfying the customers is the most important goal for any business. The main problem is that just few of top managers really understand their needs. In some companies there is a marketing department which is responsible for the relationships with the customers. But in the majority of the enterprises a sales department is the only one which has any relations with the clients. It is not only a big mistake – the sales department is not interested in satisfying the customers, they are interested in sales and in their own bonuses. The main problem is that people in other departments ordinary know nothing about the clients and their expectations. Moreover, they truly think that their “neighbors” in corporate hierarchy, other departments, are their “inner” customers. If a company is a large enough, people inside it think about one another more than about customers. That’s why big firms are rarely very customer oriented.

But it is fixable. There is a simple and very descriptive tools, which in Eastern Europe is called “Power Maps”, aka Wardley Maps, after their inventor, Simon Wardley. The core idea of the maps is value chain. The whole inner process of value creating is put on a map – but it is just a part of the job.

While mapping, we divide all the parts of the value chain creating process based on two aspects:

  1. Do they create a unique value for a customer?
  2. Are they unique, new or complicated, or one can easily buy them on the open markets? We use the scale from Genesis to Commodity. 

Look at the picture:

This is the Power Map of one of the first online photo services in the world (it was created some years ago, when such services were new). As you can see on the map, some parts of the process, such as data center or platform, don’t contribute a lot to the customer value. That’s way they are put in the lower part of the map. At the same time, things like power or computing could be easily bought on the market, so that we put it in the right part of the map.

On the opposite, things like online image manipulation were brand new for those days. They were very important for the customers (which means they contributed a lot to the final value) and they were unique. This is the reason why they are in the upper left corner of the map.

This is an easy and very illustrative way to show top managers following:

  1. What is really important for a final consumer;
  2. Which things make serious contribution to the final value, and which things don’t;
  3. Which parts of the process are unique, so a company should invest in them to keep competitive advantage, and which part could be outsourced.

The Power Maps have a lot of useful features, and this is just one of them. We will tell you about the rest in the next articles. But, as an expert in corporate strategy, I know very well that the first step it is to achieve unity of opinion among the team members. And the PM is a very useful and efficient tool to make it.

To be continued. 

Svyatoslav Biryulin,

KVAN Svetovanje, Ljubljana.

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