THE VCW METHOD FOR INNOVATION,
PARTICIPATIVE DECISION MAKING, AND OPTIMAL SOLUTIONS

(VCW Lab version: 14/07/2019)

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Hundreds of organizations in more than 20 countries have applied the VCW to solve multiple challenges

Over the years, several organizations have developed multiple VCW projects to address different organizational challenges. For example, this was the case of Elecnor-Deimos which has developed in a period of 4 years (Set 2015-June 2019) a total of eleven VCW projects (lasting in average 4-5 months). Other organizations which benefited from multiple VCW projects include Airbus,  Eurocopter / Airbus Helicopters, Gemalto,  GirlMove, Jerónimo Martins, Liga Portugal, Lufthansa Technik, Marseille University, MIT, Montepio Acredita Portugal, Nova University of Lisbon, and Refood.
Additional organizations which have implemented solutions emerged from a VCW project include: Aga Khan Foundation, Altran, AstraZeneca / Santis, AXA, Bank of Cyprus, Babson College, Bébécar, Casa Menino Jesus de Praga, Cathay Pacific Airways,  Claranet, Cyta-Vodafone, Credit Suisse, Crowne Plaza, DNS.pt, Eurolife Insurance, Everis-NTT Data, Fundação Ageas & Impact Hub, Flying Tiger, Forbach city, Four Seasons, GDF Suez, G.H.B., IGT, INCM-Casa da Moeda, InvestLisboa, IPO Porto, ITER, Healthcare City, Mastercard, McDonald’s, OKTAN, Otis, Piraeus Bank, Renova, Rio Tinto Alcan, Sagrado Coração de Maria, Santander, Santa Casa Misericórdia Lisboa, Technik, Thomson Reuters, Uniplaces, UNOX S.p.A., UPS, Vienna International Airport, among many others. 

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Who Cares about the VCW method?

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The VCW is frequently used by leaders, managers, and their teams for better judgment and decision making, and complex problem-solving. It is a requirement of the VCW method to engage key decision makers (KDMs) and leaders in participative decision making (Lowin, 1968; Black & Gregersen, 1997)

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 Leaders applying the VCW, tipically have the following attributes:

  • Embrace creativity, innovation and change,
  • Are involved and involve other stakeholders in the decision-making process. These are leaders who:
    • have the capability of “(d)istributing responsibility among the membership, empowering group members, and aiding the group’s decision-making process” (Gastil, 1994),
    • believe in participative leadership, which is “defined as joint decision making (Locke & Schweiger, 1979) or influence sharing between hierarchical superiors and their subordinates (Mitchell 1975)” (Lam, Chen & Schaubroeck 2002); it is “characterized by a leader who consults with subordinates, solicits their suggestions and takes these suggestions seriously into consideration before making a decision” (House & Mitchell 1975: 3).
  • Recognise the value of working with a wide range of people from different backgrounds,
  • Encourage stakeholders’ participation in the decision making process and are willing to (Lages 2016):
    • support collective intelligence for optimal decision making and complex problem-solving,
    • encourage creativity, innovation, co-creation, and debate.
    • share their challenges with (internal and/or external) stakeholders,
    • invite stakeholders to voice their insights and opinions relating to possible solutions and criteria to be considered,
    • promote cooperation among employees, creating a welcoming organizational culture that people like to be a part of,
    • promote participative decision-making from those with opposite perspectives, such as the skeptics, resistant and late-adopters of innovations (Jahanmir & Lages 2015; Jahanmir & Lages 2016).
  • Have the power to take decisions or influence those who take decisions namely by (Lages 2016):
    • having access to resources (3Ms: money-financial, manpower-people, minute-time), and/or
    • influencing those who have the resources.

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Why do Leaders and their teams Care about the VCW method?

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Leaders who apply the VCW tipically have the following needs:

  • Must solve complex problems/challenges and manage paradoxes, which require:
    • a large amount of information,
    • different perspectives,
    • different criteria, pros/cons, and many factors to be considered,
    • to involve different stakeholders (internal and/or external).
  • Require a systematized innovation process for innovation and problem-solving, because are often involved in the resolution of several complex challenges,
  • Must solve critical challenges, which require significant resources (3Ms),
  • Need to engage people with different backgrounds and perspectives,
  • Look for transparent and participative decisions,
  • Like to present the reasoning behind their decisions next to other stakeholders,
  • Need to embrace in explainning the why and the story behind their decisions.

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Why does the VCW mitigates the drawbacks
of participative decision making?

It might be argued that sometimes participative decision-making process is not an effective process and does not lead to efficient solutions, creating feelings of skepticism from the different stakeholders towards democratic leaders. Reasons typically presented against participative decision making (PDM), are that PDM might:

  1. take much more time to come to a decision when using several minds instead of one,
  2. stimulate idea generation (e.g., via brainstorming, design thinking, lego) but do not implement ideas,
  3. discuss the criteria to select the best ideas, without presenting any conclusions,
  4. involve too many stakeholders:
    • who do not have the knowledge, skills or expertise to discuss or provide high quality ideas,
    • leading to an increase in the complexity of the decision-making process.

However, we argue that these drawbacks only occur when participative collaboration is not supported by a systematized process for decision-making and problem-solving. The VCW can be this process.

Through the VCW method it is possible to address these drawbacks because the VCW can help management to integrate in a structured and agile manner the required skills of decision making, complex problem solving, critical thinking, creativity, people management, and capability of coordinating with others (WEF, 2018). Through the VCW method, leaders are capable of dealing with the paradox of choice for selecting the best ideas and systematizing the output of collective intelligence into implementable solutions. Through the VCW, the different stakeholders are able to express their ideas and criteria, and leaders can transform those ideas into effective solutions in an efficient manner. In sum, the VCW might be used to help leaders achieving good results, even when speed or efficiency are essential.

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VCW FOR LEADERSHIP WITH IMPACT

The wheel that creates value for companies.
It is called Value Creation Wheel …”
Jornal Negócios

“Would you like to put your business to innovate and create value?
Use this management tool.”
DN- Dinheiro Vivo

“One of the advantages of the VCW is to help to anticipate, identify and evaluate impact.”
João Viana Ferreira, Director of Everis-NTT Data. He was highly involved in the Implementation of a VCW Innovation Ecosystem at INCM

The decision making process of Leaders and Key Decision Makers (KDMs) is expected to have an impact while:

  • having a clear rational supporting the process, which leads to the most appropriate solution.
  • having access to information to solve their challenges (e.g., info of the organizational and external context),
  •  involving others in the problem-solving process, in order to build solutions which are understood , accepted, and “owned” by others.
  • sharing the options and criteria behind his/her decisions and this way get shared ownership for the final solutions.

The VCW can be used to support leadership. By following the VCW process, now “Great Leaders” have a path which might be used to:

  1. Follow a both agile and structured problem-solving process, and allow others to better understand and accept their decisions, namely:
    a. the Why?
    b. the How?
    c. the What?
  2. Gather information before solving a challenge, namely:
    a. start from a wide range of ideas,
    b. consider different pros and cons (criteria/filters) of different options,
  3. Co-create and incorporate different perspectives into problem-solving, such as from:
    a. other key decision makers
    b. different internal and external stakeholders
    c. skeptics, laggards and the devil’s advocate in the decision making process
  4. Share the reasons and support the “Why” of his/her decisions, and this way involving the community and, consequently, gettting shared ownership.

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HOW CAN THE VCW BE USED BY LEADERS AND KEY DECISION MAKERS TO TAKE BETTER DECISIONS?

“In an increasingly complex and rapidly changing world, managers face ever greater challenges in order to make decisions. Uncertainty and volatility make strategies that were based on some predictability more sensitive today. The manager is often trapped in the so-called “paradox” of choice. Therefore, a Portuguese researcher has just presented a new management methodology, called VCW-Value Creation Wheel. Luís Filipe Lages, a NOVA SBE professor, project leader, explains the new paradigm: “Managers need tools to help them decide in a world that is no longer linear.(…) The VCW is a process which helps managers and public policy makers to make decisions.”
OJE- O Jornal Económico

The VCW is a powerful tool for Leaders who wish to involve others to gather insights to find reliable and supported solutions. The great majority of Leaders decisions require an investment in terms of 3M resources (i.e., manpower, minute and/or money). The VCW might for example help the Board to take hard (investment) decisions because after applying the VCW tool, Leaders will have reasoning behind their decisions, and consequently will be able to present a rational for the WHY. This way the VCW allows providing structured information in a flexible way, will be very useful in reducing the risks associated with making resource allocation decisions.

In sum, the VCW builds in the power of co-creation and systematizing collective intelligence, in order to help Leaders to solve a problem/challenge, present the reasoning (i.e., the Why), and consequently find support for the final decisions.

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The VCW Method and the Required Skills for the 4th Industrial Revolution

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The VCW is a method which supports leaders to make better Judgment & Decision Making (JDM). JDM is considered to be among the top skills that the world needs for the fourth industrial revolution. Some even considered it to be the #1 skill for modern times, followed by fluency of ideas (HolonIq, 2019). In addition to JDM, the Future of Jobs Report published by the World Economic Forum (WEF, 2018) indicates that other critical managerial skills include complex problem solving, critical thinking, creativity, people management, and coordinating with others. All these critical skills are addressed during the implementation of the VCW method.

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Business Cases

VCW Method for Innovation and Participative Decision-Making

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“Knowing our ability to innovate, we needed to industrialize innovation. Professor Luis Lages (…) helped us with his VCW methodology to manage this process internally and industrialize innovation.”
Gonçalo Caseiro, Board Member of INCM-Casa da Moeda (an Industrial Firm)

“We’re normally subject to putting out fires here in the office, and don’t usually have time to think about and debate ideas such as these (…) in the last couple of minutes we’ve managed to have an effective and efficient discussion that we haven’t been able to have for months.”
Country Manager of a Fortune 500 in Financial Services

The VCW process does not waste time and benefits from the support of several people and different stakeholders, the more inputs the better. It allows reaching a consensus on which ideas have more potential for the topic you are dealing with, without having to walk around in meetings after meetings, without reaching any results. We focus on the ideas achieved by consensus. The VCW can help Key Decision Makers (KDMs) to take a decision and focus on stakeholders’ input to discover the actions that will have the most impact, based on the criteria KDMs have emerged and validated. (…) Congratulations on the VCW methodology because it really helps a lot to focus on the output and manage time. It does not leave much space to disperse in the final results and have the infinite meetings that we had before the methodology.
António Gutierrez, Head of Ground Segment Business Unit at Elecnor Deimos Group. He was highly involved in six VCW projects: VCW for New Market Applications for GNSS, Market Selection and Internationalization of GroundStations, Internationalization of MyFarm, New Market Applications for Sensyf, Finding New Partners and Funding, Improvement of Employee Experience and Employee Retention.

“It did help to manage the consortium (…). The VCW is very powerful for boards because they are effectively engaged, have opportunity to give inputs without a big waste of time, avoiding long board discussions. It is about efficiency, but shared ownership. If you have a negotiation between board members for a decision, you are very likely to have conflicting points of views. Here, since you typically have a more junior person conducting the process, you don’t have any conflicts. You avoid all the conflicts and put all of them into the VCW process.”
Nuno Catarino, Division Head Payload Data Ground Segment at Deimos Elecnor Group & Senior Project Manager at Deimos Engenharia. He was highly involved in seven VCW projects (Global Navigation Satelite SystemMarine-EO, MyFarm, NextGEOSS, Sensyf, VCW for New Partners and Funding, & VCW Innovation Ecosystem at PDGS Division)

“VCW is a very sound methodology for dealing with issues that are sometimes not sufficiently structured. A great VCW end-result is that it provides a very solid foundation for building and promoting the solutions that come out of it. It has a great advantage of involving a large number of stakeholders in a natural way, without creating chaos in the process, because they participate in the formulation of ideas, in the formulation of the filters, and it incorporates their inputs in a transparent and rational way, until we reach outputs which have their contribution. The VCW process is very democratic. (…) We are taking rational options which are completely agnostic to hierarchical positions, positions of influence, and preconceptions. We can come up with solutions that are real. Everyone accepts them because they have been engaged in a very balanced process. At the time of implementation, the VCW makes the supported solutions very robust. (…) We have every interest in continuing to use the VCW.”
Nuno Ávila, Country Manager of Deimos Engineering. He was highly involved in four VCW projects: VCW for Internationalization of MyFarm, Deimos’ HRM Recruitment, New Markets for Sensyf, Improvement of Employee Experience and Employee Retention.

I consider very interesting the existence of tools to support managers in decision making to create the maximum possible value, as is the case of Value Creation Wheel created by Professor Luis Filipe Lages and his team. The VCW helps to think innovation and value capturing in companies and organizations in sectors as diverse as aerospace, biology, energy, etc.
Ana Teresa Lehmann, Secretary of State of Industry of Portugal

sats

Which market application for big data?

VCW applied to SenSyf-Earth Satellite Observation

Deimos is a R&D company composed fundamentally by top-engineers that are specialised on the development of technological solutions within the space engineering sector.  For many years, the main sources of funding for Deimos were the European Space Agency (ESA) and EUMETSAT. However, in order to receive EU funds, the European Commission is asking from companies to identify the most promising markets for their technologies. This tech-led company is now facing a major challenge: How to bring breakthrough technologies that are in the shelf to the market?
In order to solve this challenge Deimos applies the VCW to identify the market application with the highest potential for SenSyf, a system that has the potential to use earth satellite observation data for a wide range of purposes.

farm

Which international market for a technology? (HBR Case-Study)

VCW applied to MyFarm irrigation system

MyFarm irrigation management system allows maize producers to monitor vegetation’s growth and diseases. In addition, through the use of satellite images, it becomes possible to provide weekly information on the amount of water to be applied by pivot or sprinkler. MyFarm service was provided for free to the Portuguese irrigation association in Vale do Sorraia and their farmers. This service ended in December 2015 because users in the domestic market revealed no interest in paying for this new service. They were conservative and sceptical towards new technologies.
In order to address this challenge, Deimos, the owner of this service, decided to apply the VCW in order to discover what would be the international market with more potential for MyFarm application.

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How to create an Innovation Ecosystem?

VCW applied at INCM-Portuguese Mint

The Portuguese Mint (INCM-Imprensa Nacional Casa da Moeda) is the oldest manufacturing establishment in the country, operating since the end of the thirteenth century. During the last seven centuries the company had the capability to reinvent itself. In order to address the new challenges of the 21st Century, INCM has applied the VCW Innovation Ecosystem in order the systemathize the innovation process and develop an innovation culture inside the organization.
In order to engage different stakeholders in the new innovation ecosystem, the VCW developed a pilot project in partnership with Everis with the goal of finding out how to cut costs while creating value and making this organization more efficient. This pilot project led to the implementation of four new projects and creation of a VCW Ecosystem inside the organization.
Read more about this project
Read more about this project
Read more about this project

VCW-Value Creation Wheel: Why? What? How? (business cases)

Impact on business and government

Examples of problems & challenges previously addressed by the VCW

The VCW’s TIAGO is as a chameleon framework completely customized to each specific case and problem, which allows the easy integration of existing practices within the organization, functional specialized tools, and existing strategies.

In order to arrive to the final solution(s), VCW’s TIAGO involves the key decision makers (e.g., C-Level and/or Director-Level) in analyzing and selecting the input of different internal and external stakeholders.

The VCW’s TIAGO uses the inputs from over 20 years of accumulated knowledge acquired during the development of over 250 business projects across more than 20 different countries to answer concrete organizational problems (see examples below).

Challenges by field

Governance Model:

How can the VCW be used to create a governance model for our organization?
How to create an innovation ecosystem which allows to create a systemathized innovation process for problem-solving?

Growth, Strategy and Marketing:

How can our subsidiary get more attention from the headquarters?
Which new market segments to enter?
Which new international markets to enter?
How to grow via existing customers?
How to grow via new products?
How to increase our market hare?
How to educate and motivate consumers to order the original brand instead of a white label?

Mergers and Acquisitions:

How to keep the previous clients before the merger and before changing our brand?
How can we ensure standardized reporting and increase acceptance for an imposed group wide project reporting tool?
How to grow via acquisition of new brands?
Which companies shall we acquire in the long-term?
How to manage change and growth in a fast growing organization?

Financial Services and Funding:

How to create, develop and mantain an Innovation Ecossytem supported by the VCW?
How to cut costs while increasing value?
How to get funding to finance the expansion of our business?

People and Human Resources Management (HRM):

How to build the best team for our X department?
How to attract the top engineers from the European market?
How to attract the best employees in the market, knowing that we cannot offer competitive salaries?
How to retain talent inside our organization?
How to involve and motivate our employees, knowing that they are under stress and it is impossible to increse salaries?
How to create a marketing and communication department transversal to the whole group of companies?
How to improve human resources efficiency while having all stakeholders aligned with the organization’s vision?
How to obtain gender balance?

Industry-specific challenges

Tech and Innovation-Driven Firms:

How to integrate the inputs from techies, majority and late-adopters into the NPD process?
How to ensure customer loyalty in the presence of constant tech-innovations?
Which one is the most attractive market for our breakthrough technology?
How to increase the number of daily downloads and percentage of retention for a mobile app?

Service Companies:

Which new service can we introduce in our compay to increase revenue?
Which one is the most appropriate solution to overcome the seasonality of our services and products?
How the ATSC (Air Traffic Control Service) can reduce airplane delays?
What is the value proposition for our agro-tourim project?
How to keep the classical image of our law firm,  while not ignoring the most innovative practices of international law firms?
How to optimize time and costs, and simplify efforts required in processing legal files?

Hospitals & Healthcare Companies:

Which new international market is more attractive for our medical app?
Which new market is more attractive for our medical products/services?
How to involve doctors in the outcomes research lab of our hospital?
How to overcome barriers to adoption of an innovative service for cancer prevention and diagnosis, in a society with low cancer awareness and screening?
How to cuts costs while increasing value in our healthcare services?
What is the most attractive market application for our lab discovery?

Retailing & Distribution:

How to attract new agents and/or distributors into our business?
How to increase the sales of frozen food in a market that values fresh food?
Since customers are already buying directly from other suppliers, how can we change how exclusive B2B business model, to a both B2C and B2B market?
What is the most effective way to promote our product online?

Government, Arts/Culture, Foundations, & NGOs:

How to identify the right partners for our organizations?
How to convince authorities to become quicker in providing Visas to highly qualified individuals?
How to find highly qualified volunteers to help us to join our not-for-profit organization?
How and where to find funds to support our mission?
How to develop a cultural project supported by independent and diverse financial sources?

Cooperation > Companies

Cooperation > Universities