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	Another common mistakes many companies do is mixing different customer maps into one common profile. Project manager will struggle to identify which customer’s jobs, pains and gains are evaluated. Furthermore, it is even more difficult to evaluate the jobs, pains and gains with the highest priority out of one huge customer profile. Mixing the customer maps prevents the project teams from designing a compelling value proposition. Instead of mixing the customer profiles, the project team should rather work through one customer map at a time. Instead of one value map to serve all the customer profiles, there should be various different value propositions for each customer profile creating a perfect fit.<ref name="(Garner, 2015)">Garner, B. (2015). 5 Common Mistakes to Avoid When Using the Value Proposition Canvas. [online] Strategyzer. Available at: https://blog.strategyzer.com/posts/2015/2/19/5-common-mistakes-to-avoid-when-using-the-value-proposition-canvas [Accessed 3 Mar. 2019].</ref>		Another common mistakes many companies do is mixing different customer maps into one common profile. Project manager will struggle to identify which customer’s jobs, pains and gains are evaluated. Furthermore, it is even more difficult to evaluate the jobs, pains and gains with the highest priority out of one huge customer profile. Mixing the customer maps prevents the project teams from designing a compelling value proposition. Instead of mixing the customer profiles, the project team should rather work through one customer map at a time. Instead of one value map to serve all the customer profiles, there should be various different value propositions for each customer profile creating a perfect fit.<ref name="(Garner, 2015)">Garner, B. (2015). 5 Common Mistakes to Avoid When Using the Value Proposition Canvas. [online] Strategyzer. Available at: https://blog.strategyzer.com/posts/2015/2/19/5-common-mistakes-to-avoid-when-using-the-value-proposition-canvas [Accessed 3 Mar. 2019].</ref>
	One occurring challenge for companies when working with the Value Canvas could be that their employees cannot block out the already existing ideas, products, services or technologies. Once the project team members start to complete the customer profile, they only list the jobs, pains and gains that their value map can already solve. Therefore, employees fail to identify what customers really need. To overcome this obstacle, employees are advised to put themselves in the position of the customer. Once they can block out the existing offered value map, and manage to think beyond these specific jobs, pains and gains, they manage to pin point what actually motivates and drives their customers.<ref name="(Garner, 2015)"></ref>		One occurring challenge for companies when working with the Value Canvas could be that their employees cannot block out the already existing ideas, products, services or technologies. Once the project team members start to complete the customer profile, they only list the jobs, pains and gains that their value map can already solve. Therefore, employees fail to identify what customers really need. To overcome this obstacle, employees are advised to put themselves in the position of the customer. Once they can block out the existing offered value map, and manage to think beyond these specific jobs, pains and gains, they manage to pin point what actually motivates and drives their customers.<ref name="(Garner, 2015)"></ref>
−	When identifying customer’s jobs, project team members tend to label all of them as functional jobs. Although these are obviously the most visible ones, social and emotional jobs are also driving customers. Project managers should pay special attention to elaborate the “minority” of customer’s jobs. The related pains and gains have often a stronger impact on the customer’s behaviour and therefore special attention is required..<ref name="(Garner, 2015)"></ref>	+	When identifying customer’s jobs, project team members tend to label all of them as functional jobs. Although these are obviously the most visible ones, social and emotional jobs are also driving customers. Project managers should pay special attention to elaborate the “minority” of customer’s jobs. The related pains and gains have often a stronger impact on the customer’s behaviour and therefore special attention is required.<ref name="(Garner, 2015)"></ref>
	Last but not least, project managers should be aware of the fact that it is almost impossible to link every single customer job, pain and gain to the offered products and services, pain relivers and gain creators. To save time and resources, project manager should focus on linking the highly prioritised factors to the Value Map, otherwise organisations will leave their customers unsatisfied. Organisations and project managers need to realise that trade-offs are essential. Once these prioritised factors are identified and addressed, the project team will perform better.<ref name="(Garner, 2015)"></ref>		Last but not least, project managers should be aware of the fact that it is almost impossible to link every single customer job, pain and gain to the offered products and services, pain relivers and gain creators. To save time and resources, project manager should focus on linking the highly prioritised factors to the Value Map, otherwise organisations will leave their customers unsatisfied. Organisations and project managers need to realise that trade-offs are essential. Once these prioritised factors are identified and addressed, the project team will perform better.<ref name="(Garner, 2015)"></ref>

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Revision as of 22:28, 3 March 2019

Developed by Sebastian Walther

Contents 1 Abstract 2 The Value Canvas Process 2.1 Customer Map 2.2 Value Map 3 How to create Value 4 Value Canvas in Project Management 5 Advantages 6 Limitations 7 Conclusion 8 Annotated bibliography 9 References

Abstract

Everyday companies design products and services to make their customers’ lives easier. Due to the fast-moving world, technological progress and other aspects, most of nowadays markets are very competitive. On the one hand, this high competition provides a huge selection for customer to choose from, but on the other hand, companies need to figure out exactly what their customers want and need. The Value Proposition Canvas as part of the Business Model Canvas helps and supports companies to design the right products and services to meet their customer requirements. This approach was introduced for the first time by Alexander Osterwalder in the 2000s as part of his work on Business Model Ontology. ^[1] Similar to the Business Model Canvas, a given template guides the project manager or other employees aligned to the project through the two “maps”, namely the “customer profile” and the “value map”. The customer profile is divided into three sub sections – jobs, pains and gains. The second part is the value map, including the company’s products and services, pain relievers and gain creators. ^[2] In the following article the overall Value Canvas process is described with its roles, meetings and application. In addition, some helpful considerations regarding project management when using the Value Canvas in new projects are provided. Furthermore, the benefits as well as limitations of the Value Canvas methodology related to project management are discovered and critically analysed.

The Value Canvas Process

One of the main tasks of each company and hence, their project leaders, is to design and develop products and services to facilitate their customers’ lives. However, 72 percent of newly developed products fail. That means, customers do not care about 7 out of 10 products introduced to the market.^[2] Global players such as Nintendo experienced failure by launching its first gaming console, namely the Famicom console. Further gaming consoles, such as the Atari or Nintendo NES also did not convince the customers. Nintendo was not the only one who struggled to offer the right products to an emerging market, other big companies, such as Apple, launched a number of failures to the market.^[3] However, it should be the aim of every company not to waste its valuable resources on introducing a failure to the market and hence launch a product not belonging to the 72 percent mentioned above. As already mentioned before, the pace of change in technology, business environment and other areas accelerates each day and organisations need to keep these fast-changing factors under control. Prince2 depicts two key challenges for organisations to survive in nowadays society. Firstly, enterprises need to maintain their daily business operations, such as customer relationships, brand loyalty and productivity. These aspects are beyond the scope of this article. Secondly, it is highly recommended to focus on the transformation of business operations in the future to remain competitive.^[4] This future change is implemented by various projects. Newly introduced projects are the main trigger for change. PMBOK and Prince2 describe a successful project as temporary, meaning it should have a clear start and end date. The project is terminated when the objectives are reached, or it failed to achieve its aims. Another reason for an early termination of the product is its redundancy.^[5][4] Furthermore, Prince2 argues that cross-functional teams should be aligned. Due to their different backgrounds and skills, organisations hope, that team members work more efficiently and implement a change that affects others outside the team. In addition, every project is unique. It might be the case that some projects are quite similar, but different team members, different customers and other factors distinguish a project from others. Unfortunately, every project comes with a potential risk of failure.^[4] Due to fast pace of change and the uncertainty of the near future, potential threats could appear. However, a project could also be a success and bring opportunities with it. To make use of these business opportunities, organisations set highest priorities on a successful project management. Therefore, organisations choose and select very wisely their project managers and the assigned team members. To avoid introducing a poor product, project managers play a critical role identifying and recognising the right approach in order to achieve the project’s objectives. Project managers occupy an important position as leaders in project teams which is clearly visible throughout the whole project.^[5] According to Prince2, project managers are responsible for setting up a clear plan indicating the sequences for the upcoming steps. Without having a plan, control over everything is not guaranteed.

It might be possible to accomplish somehow this new project by himself or herself, but especially in project management it is crucial for the project manager to delegate tasks to team members to make use of the synergies and cross-functionality as well as reducing risks at the same time. Furthermore, it is the project manager’s responsibility to monitor the delegated work and if necessary, take a supportive role for occurring obstacles and emerging problems. In addition, if the project team is way ahead of the schedule, the project manager ought to find ways to speed up the closing of the projects or save costs.^[4] According to PMBOK various specific factors, such as market, stakeholder and social demand are leading to the creation of a project. Another very important impulse leading to the creation of a new project is customer requests. For example, a new industrial park was built and therefore power is needed to run the different machines. The local electricity utility agrees on a new project to build a new substation to supply the newly built industrial park with electricity.^[5] This article pays especially attention to the customer needs and how organisations can benefit from understanding them correctly. The following steps of the Value Canvas tool help to visualise, design and test how to create value through a new product for a company’s customers. Therefore, it is highly recommended to first identify the customer requirements through the introduced steps of the Value Canvas and starting a new project based on this elaboration. Afterwards, a base for successful project management is created to meet the tailored needs of this new project. However, other strategic management tools and processes can also be used. Furthermore, it is worth mentioning, that the conduction of the Value Canvas works best in conjunction with the Business Model Canvas, but it is not a necessity. Figure one shows the Value Canvas embedded into the Business Model Canvas.

Customer Map

The Value Canvas is composed out of two parts, namely the customer profile and the value map (Figure 2). Within the customer profile, the jobs the customer wants to get done are specified. Professor Clayton Christensen provides a very good example about figuring out the customer’s jobs. Mc Donald’s aimed to increase their milkshake sales and asked customers for feedback. Afterwards, they improved their milkshakes based on these dimensions and however, it had no impact on sales or profits. Consequently, they continued investigating the situation and came to the conclusion that it is not as important to understand the customer, but the job they want to get done. The research team concluded that there is a job needed to be done that is causing people to buy this milkshake to get this job done. Therefore, the real challenge is to figure out what the actual job is. The job this milkshake is getting done for customers is them engaging in life whilst driving to work in the morning and not falling asleep.^[6]

However, these jobs can either be functional (e.g. Getting a project done by a specific date or getting from point A to point B), social (e.g. Impressing your surroundings like family members, friends or colleagues) or emotional (e.g. Gaining a piece of mind). In the second step, customers’ pains should be highlighted. These pains prevent customers from getting their jobs done and are perceived as annoying and frustrating. The desire of customers is to avoid these pains as much as possible. Typical examples of pains customers experience are dissatisfaction of existing solutions or jobs. In addition, challenges, risks or obstacles for future projects can be recognised as typical pains. In the last part of the customer map, the gains are outlined. These gains describe how customer measure and perceive a job well done. Customers hope to achieve this outcome when getting their jobs done. Examples for gains could be concrete results, benefits or aspirations.^[1] This customer map is very valuable for project manager, because due to its visualisation of jobs, pains and gains, they are able to understand the customers the organisation is trying to create value for. The more the company learns about its customers, the clearer the map can be developed and hence, the better internal projects can be started to develop the best fitting product or service for its customers.

Value Map

Managing a project successfully includes considering various factors. In the customer map, the customer needs, concerns and expectations are depicted. The value map (left side of Figure 2) evaluates more the internal factors of a project, such as scope, schedule, costs, quality, resources and risks. Balancing and prioritizing these project circumstances will influence the outcome of the created value map. The second part of the Value Canvas is the “Value Map” including the companies “products and services”, “pain relievers” and “gain creators”. In the product and services section, the company lists all the products and services they provide to their customers. These products and services aim to deliver the maximum value to their customers. For example, a service of an energy supplier is providing energy to its customers. In the next step, the possible pain relievers are described. Project manager should think of possible features and opportunities of the company’s product and services and describe them in this section. The aim of these pain relievers is to eliminate, reduce or minimise pains customers care about and make their life easier. In the last step of the value map, project managers need to consider possible gain creators through the offered products and services. The outline of this section is to describe the benefits the company’s products or services intend to deliver, which the customers expects, desire or would be surprised by. Most of these gain creators have either a functional utility, a social gain, positive emotions or are save costs. The value map explicitly shows the project manager how future products and services can create gains and relief pains.^[1] The overall aim for project managers is to achieve a matching fit between the two maps. This perfect connection is achieved by figuring out what matters to customers, how the company’s products and services relief pains and create gains. A well elaborated value proposition targets essential customers’ requirements, jobs, pains and gains. There might be numerous pains and gains on the customer side, but the value map clearly describes on which the new product will focus on.^[1]

How to create Value

When starting a new project, the following steps are a helpful guideline to determine whether the future product or service is going to be successful or a failure. If the company is able to answer the following questions with yes, the organisation is on the right path to create a compelling value proposition and therefore an successful product or service for its customer. The following “4Us” are of great help to evaluate the internal part of the organisation.^[7]

• 1. Is the problem unworkable

The assigned project team working on this problem should scrutinise whether there is a business process that needs to be fixed. Possible consequences through a broken business process could be redundancies. If the answer is yes, the company managed to figure out their internal champion for this problem.

• 2. Is fixing the problem unavoidable

By figuring out this question, the organisation considers heavy impacts associated with governance or other regulations. For example, the company should examine consequences for their accounting department. If the answer is yes, the company recognised the group that will be the champion.

• 3. Is the problem urgent

This question addresses the urgency of the problem within the company. Global players and big size enterprises struggle daily with various problems. Therefore, commanding the attention and allocating the resources might be not that easy. However, if the answer is yes, the management board will pay attention and consider the problem as urgent.

• 4. Is the problem underserved

The organisation should pay high attention to this sub question. By answering this question, the enterprise will find out whether there is noticeable absence of valid solutions for the concerning problem. After answering the questions above, project managers need to qualify the evaluated problem. If the problem is blatant and critical, it will hinder organisations from business to business operations. The next step that needs to be conducted is to evaluate whether the generated breakthrough is fulfilling the criteria of being worthwhile enough for a new project initiation. Therefore, the created value should be unique and introduce a change to an existing problem. When these requirements are met, the newly created value is worth to be considered from the company’s management.

Value Canvas in Project Management

The strategic management tool Value Canvas helps to master new challenges occurring during the fast pace changes on the market. Especially in starting up a project process as well as in the initiating phase, the usage and implementation of the Value Canvas is beneficial for the organisation. The Value Canvas answers crucial questions such as whether the project is worthwhile and whether it delivers any value to its customers. Considering the project life-cycle as a standard tool to deliver a successful project in today’s competitive markets, the Value Canvas is ought to be used in the first stage, namely the Initiation phase.^[8] Value Canvas is of great help for project managers and their teams to develop a product or service tailored precisely for customer needs. Thanks to the Value Canvas, the final product or service the customers want is already known. Therefore, project managers can avoid initiating poorly conceived projects and when starting the project, the needed resources to meet the customer requirements are depicted. Initiating the right process group is a key challenge in Project Management. PMBOK describes that sponsors, customers and other stakeholders, who can influence the success of a project, need to be considered and elaborated carefully.^[5] Furthermore, due to the in-depth analysis of the customer requirements, the Value Canvas encourages a clear and straight forward project strategy and can help develop guideline formulations for the upcoming steps. Based on the conducted in-depth customer map, the customer requirements are analysed, and the project team can start working on the best fitting solution. The lessons learned and the gained knowledge from the initiating phase can be implemented into the planning and organising phase.^[5]

Advantages

The strategic management tool Value Canvas delivers various advantages when applied. One of the main advantages of the Value Canvas is a very clear overview of the customers’ requirements, needs or desires. If the project team research in depth about these needs, a clear customer map can be created which indicates exactly what the customer wants. Furthermore, the customer profile provides numerous pains and gains, which are listed and described in great detail in the Value Canvas. Once the internal “value” is created, the Value Canvas ultimately connects the internal generated value with customer requirements. All in all, a comprehensive and easy understandable overview is provided.^[1]

Another benefit of the Value Canvas is gaining a competitive advantage compared to competitors. By explicitly identifying the customers’ requirements, companies can design and develop new products and services tailored precisely to these needs. Therefore, the company can allocate resources more efficiently, assign the right project manager and employees for the new product development, and develop products and services that perfectly match the customers’ needs. Due to the collection of customer information and their specific requirements, companies using the Value Canvas do not waste any time on developing ideas, prototypes or products customers are not interested in. This will improve the customer understanding and engagement, increase the profitability in the long term, introduce a more effective business model and optimise the allocation of valuable resources.^[1]

Based on the customer profiles, the company’s marketing department can focus and concentrate on specific activities generating the greatest results for the company. Once the company truly understands its customers’ needs, they can focus on the most relevant channels to communicate benefits, solutions, pain relievers and gain creators to their customers.^[4]

According to a Project Management Institute’s (PMI) study in 2007 about seven causes of project failure, the main failure factors can be grouped in three main categories; (1) people factors, (2) project process factors and (3) project communication factors. One of the subcategories of why projects fail is the exclusion of customers from the beginning of the project. To avoid any misunderstanding of the customer requirements and hence avoid creating a core problem for the upcoming project, the Value Canvas provides meaningful input from the very first beginning. It is highly recommended to involve the customer not only at the initiating phase of a project, but also in the product description and later implementation.^[9]

Limitations

One of the main limitations of the Value Canvas is the exclusion of any outside factors. The strategic tool purely focuses on the customers’ requirements and the internal values a company can deliver. Possible competitors, market forces or any other external forces are completely excluded. In addition, the Value Canvas is only present oriented as it considers only the company’s current products and customers. The Value Canvas does not provide any future orientation, excludes possible potentials and assumes that the company stays in the same business. Another common mistakes many companies do is mixing different customer maps into one common profile. Project manager will struggle to identify which customer’s jobs, pains and gains are evaluated. Furthermore, it is even more difficult to evaluate the jobs, pains and gains with the highest priority out of one huge customer profile. Mixing the customer maps prevents the project teams from designing a compelling value proposition. Instead of mixing the customer profiles, the project team should rather work through one customer map at a time. Instead of one value map to serve all the customer profiles, there should be various different value propositions for each customer profile creating a perfect fit.^[10] One occurring challenge for companies when working with the Value Canvas could be that their employees cannot block out the already existing ideas, products, services or technologies. Once the project team members start to complete the customer profile, they only list the jobs, pains and gains that their value map can already solve. Therefore, employees fail to identify what customers really need. To overcome this obstacle, employees are advised to put themselves in the position of the customer. Once they can block out the existing offered value map, and manage to think beyond these specific jobs, pains and gains, they manage to pin point what actually motivates and drives their customers.^[10] When identifying customer’s jobs, project team members tend to label all of them as functional jobs. Although these are obviously the most visible ones, social and emotional jobs are also driving customers. Project managers should pay special attention to elaborate the “minority” of customer’s jobs. The related pains and gains have often a stronger impact on the customer’s behaviour and therefore special attention is required.^[10] Last but not least, project managers should be aware of the fact that it is almost impossible to link every single customer job, pain and gain to the offered products and services, pain relivers and gain creators. To save time and resources, project manager should focus on linking the highly prioritised factors to the Value Map, otherwise organisations will leave their customers unsatisfied. Organisations and project managers need to realise that trade-offs are essential. Once these prioritised factors are identified and addressed, the project team will perform better.^[10]

Conclusion

Based on the existing literature about The Standard for Project Management, this guide provides key concepts, methodologies, tools and techniques on how to conduct and succeed a project. However, specific factors leading to a new project such a customer request are listed in the literature, but management tools to tackle these driving factors are not provided.^[5] For a project manager, the Value Canvas could be of great help to consider the customers’ requirements, desires or needs. Due to the flexibility of the model, small, medium or big enterprises as well as start-ups can make use of this management tool. In my opinion, this tool should be implemented whenever the company wants to launch a new product or service to avoid introducing a failure to the market. Thanks to that, the project manager can have a clear overview of the Customer profile and can start finding solutions through the Value Map. In addition, the company saves valuable resources, reduces costs and does not give a bad impression to the customer. Finally, this management tool should not be seen as a strict format every project manager needs to follow. It should rather be understood as a guideline that project managers can use to orientate themselves to get a better understanding of their customers. Considering the fast pace changes in nowadays society, companies strive to remain competitive and aiming to understand as much as possible about their customers. Therefore, this simple tool provides the perfect base to build a successful project.

Annotated bibliography

• Osterwalder, A., Pigneur, Y., Bernarda, G. and Smith, A. (2014). Value proposition design. Hoboken: Wiley.

Provides a very detailed inside about the method and the background of the Value Canvas. The two maps are described in great detail and further examples are provided for a better understanding.

• A guide to the project management body of knowledge. (2017). Newtown Square, Pennsylvania, USA: Project Management Institute.

This book provides an excellent inside about all relevant topics concerning project management. Part 1 Chapter 1 describes project management with a general point of view. Furthermore, in Part 2, Chapter 2 describes the initiating process where the Value Canvas could be implemented.

• Kyhnau, J. and Nielsen, C. (2015). Value Proposition Design How to create products and services customers want. Journal of Business Models, 3(1), pp.81-92.

Two independent authors analyse and evaluate the Value Canvas. This article provides a second opinion about the tool as well as providing a summary of the steps through the Value Canvas.

References

1. ↑ ^{1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7} Osterwalder, A., Pigneur, Y., Bernarda, G. and Smith, A. (2014). Value proposition design. Hoboken: Wiley.
2. ↑ ^{2.0 2.1} Strategyzer, (2017, March 7). Strategyzer's Value Proposition Canvas Explained. Available at https://www.youtube.com/watch?v=ReM1uqmVfP0 [Accessed 3 Mar. 2019]
3. ↑ Patel, S. (2015). 8 Successful Products That Only Exist Because of Failure. Forbes.com. Available at: https://www.forbes.com/sites/sujanpatel/2015/01/16/8-successful-products-that-only-exist-because-of-failure/#43f187d31c8c [Accessed 3 Mar. 2019]
4. ↑ ^{4.0 4.1 4.2 4.3 4.4} Axelos, A. (2017). Managing successful projects with PRINCE2. 6th ed. United Kingdom: The Stationery Office Ltd.
5. ↑ ^{5.0 5.1 5.2 5.3 5.4 5.5} A guide to the project management body of knowledge. (2017). Newtown Square, Pennsylvania, USA: Project Management Institute
6. ↑ Strategsys, (2017, March 17). Jobs to be done-Prof. Clayton Christensen. Available at https://www.youtube.com/watch?v=Q63PZR7mG70&t=188s [Accessed 3 Mar. 2019]
7. ↑ Skok, M. (2013). 4 Steps To Building A Compelling Value Proposition. Forbes.com. Available at: https://www.forbes.com/sites/michaelskok/2013/06/14/4-steps-to-building-a-compelling-value-proposition/#500157eb4695 [Accessed 3 Mar. 2019]
8. ↑ Dempsey, B. (2018). Council Post: Business Life Cycle Spectrum: Where Are You?. [online] Forbes.com. Available at: https://www.forbes.com/sites/theyec/2018/01/11/business-life-cycle-spectrum-where-are-you/#7b696a0eef5e [Accessed 3 Mar. 2019].
9. ↑ Discenza, R. & Forman, J. B. (2007). Seven causes of project failure: how to recognize them and how to initiate project recovery. Paper presented at PMI® Global Congress 2007—North America, Atlanta, GA. Newtown Square, PA: Project Management Institute.
10. ↑ ^{10.0 10.1 10.2 10.3} Garner, B. (2015). 5 Common Mistakes to Avoid When Using the Value Proposition Canvas. [online] Strategyzer. Available at: https://blog.strategyzer.com/posts/2015/2/19/5-common-mistakes-to-avoid-when-using-the-value-proposition-canvas [Accessed 3 Mar. 2019].