STEPS IN IMPLEMENTING EVA

The implementation of EVA is a four step process which includes:
Measurement

Management system

Motivation

Mind set

MEASUREMENT :- Any company that wishes to implement EVA should
institutionalize the process of measuring the metric, regularly. This
measurement should be carried out after carried out the prescribed
accounting adjustments.

MANAGEMENT
SYSTEM The company should be willing to align its management system to the EVA process. The Eva based management system is the basis on which the company should take decision related to the choice of strategy, capital allocation, merger and acquisition, divesting business and goal setting.

MOTIVATION The companies should decide to to implement EVA only if they are prepared to implement the incentive plan that goes with it. An EVA based incentive system, however, encourages managers to operate in such a way as to maximize the EVA, not just of the operations they oversee but of the company as whole.
MIND-SET The effective implementation of EVA necessitates a change in the culture and mind set of the company. All constituents of the organization need to be taught to focus on one objective –maximizing EVA. This singular focus leaves no room for ambiguity and also it is not difficult for employees to know just what action of their will create EVA and what will destroy it.