If people are skeptical about VBM then a pilot study is preferable. If people are on board with the VBM concept, then a companywide roll-out tends to work better. Providing sufficient education and communication about VBM and then implementing it usually takes about a year, says Kenney. If decision- makers wait too long and tie VBM to next year's compensation program, staff will get tired of hearing about VBM and may lose enthusiasm. However, employees will know the company is serious about VBM if senior management has given it their blessing, which is another critical factor for success.
Some companies are more likely than others to succeed with value- based management.
VBM may result in major changes within the company, such as downsizing or spinning off a division. So it's not only education that's important. Ongoing communication about your company's VBM initiatives is another key element, so people aren't left in the dark about VBM developments, or why the company is doing what it's doing. Poor candidates for value-based management include companies with strong earnings and stock prices. Implementing VBM can be difficult because people will continually question the need for such an initiative.