The primary goal of every organization is to create value for stakeholders. At the same time, the organization’s value creation potential is the function of two components:
The primary sources of efficiency and productivity in the 21st century are intangible assets. Those must be integrated into a coherent system to be able to create value. In our approach, this system is called the “Leverage Circle” (see the figure on the right).
The LEVERAGE methodology consists of assessment of quality of specific parts of the Leverage Circle and of the degree of their synchronization. What follows is the design and implementation of solutions to improve global efficiency and productivity of the system. Preliminary assessment of a company’s ability to create value takes place using the LEVERAGE INDICATOR (LI), which is the composite of efficiency and productivity:
LI = Productivity x Efficiency
Effectiveness = level of synchronization of the organization’s core components,
Productivity = the company's skills in management of all resources, with special consideration of achievements in the following fields: supply chain, processes, technologies, and organizational development.
A company evaluated with the LR factor is then qualified to one of four available categories:
Fig. Components determining the effectiveness (success rate) and productivity with which the organization achieves its goals.
Each category requires a different scope and methodology of design followed by implementation of LEVERAGE solutions.