What are value driver trees?

Value Drive Trees (VDTs) are the main type of diagram used as part of VDM. VDTs are basically a picture of the ‘gears’ or ‘value drivers’ that power a business. Here we have an example of the basic building block of a VDT.

This building block forms part of a much larger VDT, which in this case is for the productivity of a dozer. The individual elements of this building block are simple. It has a heading, units, and a value. The definition of value in this context, is the amount of hectares cleared per annum.

Now if I expand the tree, we see more elements to the VDT. We see that the boxes are connected in a relationship, and that that relationship is described mathematically, in this case, with multiplication signs. It’s apparent that these lower levels elements multiply together to equate to our starting element. This is the fundamental function of a VDT, to transparently show the relationship between different elements of value.

It’s possible for this tree to keep breaking down into ever more detailed steps. What’s important to remember is that we are interested in those elements that are directly contributing value to the final outcome of the VDT.