Yesterday I spent a very enjoyable evening playing with Michael Porter’s Value Chain (and my colouring pencils – I’m finding it difficult to suppress that creative urge at the moment!) I’ve always maintained that there are very few business theories that can’t be applied to schools just by swapping profit for results.
It is important to note at this point that by “results” I don’t just mean exams. Schools add value to the whole individual and results should reflect the growth, behaviour, health, attitudes and learning of the student, whether they be nursery, primary, secondary or FE.
Anyway, Porter has always been my favourite with the Value Chain, in my opinion, more interesting than his 5 Forces in promoting debate surrounding a company (or in my case, school) strategy.
The Value Chain looks at the functional process of a business, and accepts that every business takes something in (be it components, elements of a service, or child) and processes it, adding value along the way until the product, service or student leaves the business, (perhaps then giving the company an opportunity for after sales service, accessory sales or alumni events feeding back in to the school.) These are the Primary Activities of a business and their aim is to add value to the product that realises more in results or margin than has been spent on its conversion into something that the customer desires. The Primary Activities also provide the strength and stability needed by the business to maintain its place in the market.
Along the top of the Value Chain model are the Support Activities. Without these functions the company couldn’t perform the Primary Activities but they do not, for the most part, directly effect the end product. From a value point of view the Support Activities are important in that they offer the business an opportunity for competitive advantage and differentiation.
So, how to use this in a school? The Value Chain helps focus strategic improvement in its activities by enabling the user to consider each activity and how it links to other activities. To look at whether these links are as effective as you would want and whether there is anything that would improve the link or the activity.
For example, to take it from the top, how does the administration function support the Primary Activity of admissions? How important is that link? Would it be an improvement priority for your school? How would you improve it? And if that link was improved, would that have a knock on effect to the marketing function or an aspect of HR? With the assumption that most activities link in some way to each other, there are a considerable number of links to develop and prioritise.
For me, there are two very interesting things about the Value Chain. Firstly, the combinations are endless and every school, business, situation and team are going to look in a different way at the functions that are important to them, consider different links and efficiencies and would, naturally, prioritise them differently. Secondly very few schools consider the value that the procurement process (for example) adds to the end product and the ultimate satisfaction of the customer. The Value Chain encourages thinking that, usually for a school, is outside of the norm.
Exciting stuff! (Or is that just me?)