The Value Case method
There are an abundance of sustainable ideas, technologies, and innovations on offer. But how do you reach the best decision together with several other parties? Sometimes, you’re working with large consortia, especially if you’re helping to address a major societal issue. Each party in the decision-making process has its own interests and considerations. You can come to an agreement using the Value Case method.
Deciding on investments
If the future prospects of a transition project are still unclear, there is often little appetite for investment. This is because in many cases, no agreement is reached. Reasons may be, for example, that the risk seems to be higher than the return, or it could be due to financial considerations or closed negotiations, or there may be a lack of clarity about the value that an investment in sustainability will bring.
The Value Case method offers a solution. With this method, we meticulously, independently, and objectively identify the values of all parties in the consortium. We also align all the objectives. This enables you to arrive at a broadly supported decision on investment in a joint project.
Deciding in 4 steps
The Value Case method has 4 steps. After each step, you can go on to make a decision. If you’re not yet ready to make a decision, you proceed to the next step.
Step 1 is Design. You discuss with each other who will do what, which party will take on which part of the costs and benefits, and who will bear the risk. This brings clarity about the goal of the project, for yourself and for other parties.
Step 2 is Quantification. We provide insight into the value you will achieve in relation to your objectives. Together, we quantify the impact of the decision against objective measures, such as financial effects, social effects, and environmental impact.
Step 3 is Valuation. In this step, you consider what is important to you. This is always subjective, which complicates matters. A housing association, for example, has different wishes from those of a tenant. Therefore, we ask stakeholders for their different objectives and translate these into a single combined value for each party, which is called the economic utility.
The final step is Negotiation. In step 1, the costs and benefits are divided among the parties in the consortium. In step 2 or 3, a decision-maker may decide that the roadmap does not contribute sufficiently to achieving the objectives. For example, because it becomes too expensive, the environmental impact is too limited, or independence is at stake. In step 4, we guide you in the process of exchanging values through negotiation and help you arrive at a plan that is feasible for all parties.
Value Case method in practice
We’ve already applied the Value Case method in practice. In one project, for example, we investigated how profitable it is to store energy in an underground car park. This can be used to respond to the increasing number of electric vehicles and opportunities to generate sustainable energy locally. Cities are promising locations with many electric cars, but the interests of several parties soon come into play. This concept also requires new partnerships between mobility service providers and energy companies.
In addition, there’s uncertainty about how mobility will develop. What percentage of drivers will continue to use petrol-fuelled cars or opt for hydrogen or electric transport? And who will maintain the battery? Using the Value Case method, we worked out a number of scenarios. We showed what the relationship between the parties would look like in the future and indicated which parties and developments are crucial to this concept.
Would you like to know more or contribute?
The Value Case method helps consortia make decisions in sustainable innovations and transitions. The method is constantly evolving. We’d like to take this further by collaborating on a project in the field. We have experience with investment issues and decision-making processes related to the energy transition. We’re also moving towards a circular economy and mobility.
Can we help you by identifying the opportunities for value creation, so that you can make an informed decision? Or do you want to know more about the methodology? Then don’t hesitate to contact us.
Claire StolwijkFunctie:Principal Consultant
Claire Stolwijk is Principal Consultant in the Strategy & Policy department, focussing on digitalisation of the manufacturing industry, digital sovereignty, data spaces and industrial innovation policy. She combines her scientific work with a practical approach and coordinates various national and European projects on these topics.
Frank BerkersFunctie:Senior scientist at TNO and Professor at Rotterdam University of Applied Sciences on business for societal transition
My expertise is on design approaches for business models and decision-making for business models and innovations involving multiple organizations. This time of major changes, especially in business, requires good and reliable support for collaboration, e.g., Value Case Methodology and Collaborative Business Modelling and Orchestrating Innovation.
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