Now that we have a sense of why you have decided to work with Value Creation Associates, it is time to delve into the factors that resulted in the existing condition of your company. In a broad sense, we refer to these as the “Influencing Factors” and there are a few ways to uncover them. But first what do we mean when we say influencing factors?
These factors are those outside and inside circumstances that set boundaries, place limits, offer opportunities, and create the conditions the company must deal with as it seeks ongoing success.
One of the best ways we’ve found to approach this is by addressing these factors as seen through the eyes of your employees and by various disciplines or departments.
Some examples might be: what does the engineering team believe are the key influencing factors? They may say the customer specs are too tight or the package required for the design is too small. Quality may say the equipment is too old or incapable of holding tolerances or the material supplied varies too much. The manufacturing floor personnel may say the lighting in the building is too dark or the tooling is worn out. Purchasing may say the suppliers are always late and the customers’ schedules are unrealistic. You get the point. We are trying to paint a picture of the conditions the company is faced to operate under both from a perceived and a factual basis. In many cases we’ll find the list is long but when boiled down to truly influential factors can be a real eye opener.
Allowing the personnel in each department to make their own list, in some cases with very little restriction on what can be mentioned, can be a real learning experience. The real question is often whether the personnel feel comfortable sharing their thoughts with management. We’ll need to assess this with you to help make sure the information we gather is more than just the gripe of the day versus the actual longer term details.
Once we have this list of factors we’ll then discus each in detail to determine the source, the impacts and the results created by its influence. In some cases we will not be able to change them but once identified and understood be better able to deal with them. Those that can be changed will be identified and contribute to the strategies we help establish to move the company forward.
In our next article we’ll talk about Hurdles and /Roadblocks – Real and Perceived. Knowing or being able to determine the difference can be crucial to breaking new ground in performance and growth of the company.
Call today to begin our process FREE.
Value Creation Associates LLC
Gary Gauthier-Chief Insight Coach 248-672-1943
Dave Gingrich-Chief Innovation/ Implementation Coach 248-446-2626
Why wait any longer to begin your future prosperity? A simple call to Value Creation Associates LLC for a complementary FREE consultation can make an enormous positive difference to your bottom line by the end of 2010.
Our unique 3 phase approach is guaranteed to produce results fast. We begin by “baselining” your present situation and documenting just how you got here. Then we develop a strengths and weaknesses matrix. After thorough discussion and brainstorming, we develop a thorough review of market potentials for either new products or new customers or both.
Generally Innovating new products for current customers is easiest. We’ll help your thoughts and maybe ask your customers how and where we might be able to help them grow through the use of your existing capabilities. This virtual partnership approach develops a strong sense of Team and is very productive right out of the box.
Our next activity will be to take our skills matrix and look into the future and into new markets to devise a range of potential new opportunities that will be evaluated and ranked for both size and time potential for return.
Once a definite direction is selected and prioritized, we assist with Implementation by developing a list of whatever skills and training might be needed to fully realize the desired outcome. Our final help is to develop a fully internalized process to conduct these three phases continuously.
Call today to begin our process FREE.
Value Creation Associates LLC
Gary Gauthier-Chief Insight Coach 248-672-1943
Dave Gingrich-Chief Innovation/ Implementation Coach 248-446-2626
After we have completed the steps required to assess the level of insight you have into your own company and the outside world in which it functions daily, our next step will be to work toward establishing “Clarity of Purpose”.
This defines what you are really trying to do with your company and how Value Creation Associates can assist you to get there. We all know how easy it is to get caught up in the day to day grind of running the business. It is exhausting in many cases in good times and worse in the economic climate we are now facing. It is crucial that we take a step back away from these daily tasks and put time and effort into visualizing the future state of the company. This comes from our definition of what we want the company to become and where we want it to go.
As the tag line from Albert Einstein on our business cards reads; “Insanity; doing the same thing over and over again expecting different results”.
If we spend 80% of our time attending the daily needs of the company and the other 20% looking back on what might have been there is obviously no time left to chart the course for change in the future.
It truly does turn in to a rat race when we are pulled and tugged in every direction daily to get through the day; stuck as a slave to reaction rather than plotting the course to be proactive. This may sound a lot easier than it really is but stop and think about it; when was the last time you and your staff actually spent quality time doing any type of assessment on what is driving the company today and how it can be changed? My bet is not recently and not with any preparation to maximize the outcome potential. The use of outside experienced advisors such as Value Creation Associates can help turn this scenario around.
To be effective it takes a real commitment on the part of the management team to be open to outsiders evaluating the company’s performance and the organization’s effectiveness. There is little doubt that some will have difficulty doing this but it is not our intent to point fingers at anyone, all of your team contributed in some way to the current state both for the better and the worse.
Your company must have the courage to be realistic about the situation. Facts, data and reality must replace conjecture, opinion and speculation. It is unfortunately entirely normal for a company that has exhibited some degree of success to go through a period when it becomes too introspective and isolated from the outside world because it is focusing on the effort require to maintain the success.
When this inward focus happens the organization becomes vulnerable to competitors who are expending the effort to stay actively engaged with the needs and actions of their customers’ businesses.
So what’s next?
Now that we’ve contemplated a dose of reality, in the next article we’ll discuss one of the beginning stages of strategic planning; “Influencing Factors”, what internal and external actions, events, pressures are the most influential in the success and ongoing health of your organization.
Until then, we urge you to call us at:
Value Creation Associates LLC
Gary Gauthier: Chief Insight Coach 248-672-1943
OR
Dave Gingrich Chief Innovate/Implement Coach 248-446-2626
Is it just me or does it seem we business owners spend way too much time, like maybe a month or three, developing a detailed business plan and budget for next year (and maybe a few years after that).
It also seems that by January’s end, the plan is either obsolete or no longer thought to be possible, and we have already blown the budget. Why do we go through such a futile effort every year when we know it won’t do any good anyway?
A better way to operate a business might be to spend this scarce time and energy creating extra value for your customer by following a robust process that institutionalizes the constant identification and evaluation of new products, services and niches for your business. Remember that only those companies that continuously increase their value to their customers more than their competitors will survive an economic downturn such as the one we are in today. Creating this increasing value for your customer is the ONLY way to prosperity.
REMEMBER IT IS IMPOSSIBLE TO CUT YOUR WAY TO PROSPERITY!
Business papers are full of sad stories of a company, the best maker of widgets in the world, that went bankrupt from an intense focus on narrow excellence rather than striving to diversify the business by finding alternative uses for unique and highly valuable skills already part of the business’ portfolio.
Our program starts by teaching businesses how to do careful, in depth introspection to determine just what skills, talents and passions are present TODAY as a baseline for going forward. This INSIGHT then forms the detailed starting point for a process that uses these skills to INNOVATE alternative customers, industries, and products or services that can be launched quickly and inexpensively to broaden the business’ revenue stream and fatten the bottom line.
It may be seem strange that we insist on looking inward before the any look outside to determine what market opportunities may be present that can be exploited with existing capability. Indeed without a detailed skill inventory, any outward look is futile because it is impossible to be selective when there is no agreement on the best target for your present weapon because you don’t know what that weapon is.
You could be trying to kill an elephant with a pee shooter or a mouse with a howitzer. Both are exercises in frustration and sheer nonsense.
Call us to find out how we can assist your introspection TODAY so your 2010 can be better than your 2009!
Call Dave at 248-446-2626
or Gary at 248-672-1943
CALL NOW!
Do you really know what you think you know?
Far too often your business’ managers are unaware they are using obsolete, or incorrect, information about your customers, the markets you deal in and your competitors.
In many cases your management team has focused inward with such intensity on improving the performance of your business within the building you have become disconnected with the influences outside the building. Often you are operating under incomplete or false information and making critical business decisions that are flawed from the start.
As noted in our last article: “The First Step To Value Creation: Internal Awareness” it is critical to invest the effort, time and energy necessary to stay up to date with what is really happening out there in the “outside world”.
This not only assures important decisions are made with accurate information but also serves to create new lines of communication and stronger business and personal relationships that can play a vital role in your future success. After all business is always person to person.
Two important aspects of any piece of information are credibility and timing. We use the example that it may be more important to rely on information from an entry level engineer received yesterday than information from the general manager 6 months ago. One method to gage both aspects of validity and timeliness is by confirming the details with multiple sources. To do so obviously requires having a number of relationships within your customer’s business, your markets and your competitors. In most cases these take time and patience to develop. Every company should have a contact plan in place to support this important effort.
The internet has opened a whole new channel for staying abreast of what’s happening outside your walls. This is not to say it should be the primary or sole source of information. Personal relationships should be the backbone of your intelligence network.
The internet can also be quite useful for confirming information, seeking entry points and background information to new opportunities and staying aware of competitors’ activities.
We’ll cover the next element of our value creation process “The need to focus – clarity of purpose.” in our next post. Watch for it soon.
As always your comments are welcome.
If you want to explore these concepts further, please call Gary Gauthier at 248-672-1943 or Dave Gingrich at 248-446-2626.
When we talk about gaining “Insight”, we mean researching, openly discussing and reaching agreement on both internal and external knowledge of your company and it’s environment.
Developing internal knowledge involves first gaining a detailed understanding of the company’s history leading to the current state. In other words: “Where are we right now and How did we get here?
The external knowledge is an understanding of what you and your company know about your customers, the market places you deal in and your competitors. To gain this knowledge it can ONLY follow the internal knowledge development process. You gotta agree on where you are BEFORE you can plan a route to where you wish to go.
Value Creation Involves External Focus ONLY After Introspection
In many cases what we find are companies that have reacted to outside influences to become who they are today instead of developing and following both short and long term strategies to influence their own destiny. An in depth assessment of the company’s history and evolution can be very useful in identifying critical junctures that have shaped the nature of the current business.
Introspection Is Difficult And Often Emotional
Analysis of the actions your company took at these junctures, through the use of our WITH³ process, can highlight strengths, weaknesses and other key factors that influence and shape the business. This creates your internal awareness profile. This process can be straight forward but more often than not can also be difficult due to changes in personnel, conflicting opinions and a general difficulty with recollecting the past, especially in the areas of poor performance or failure.
These are the critical areas of introspection essential to your future success with our process. No matter how painful this process becomes, the information gained can be critical to your company’s future success. The more open and frank your organization is about its past, the more knowledgeable we all become in identifying areas for action for the future.
We’ll discuss the external situation analysis in our next post “What do we really know about the outside world or do we really know what we think we know?”
As always your comments are welcome.
If you want to explore these concepts further, please call Gary Gauthier at 248-672-1943 or Dave Gingrich at 248-446-2626.
Research shows some of the biggest, most successful companies were started during an economic downturn. Some of these were IBM, GE, GM, Chrysler, and General Foods.
(True, some have failed spectacularly during the past 80 years, but that is another subject for the future, but that is my point that everyday value creation is critical.)
In fact, if you give the subject some thought, when would it be a better time to start providing problem solutions than when there are so many problems that require solutions?
As we have pointed out in past posts, NO business can prosper WITHOUT providing products or services that provide superior value to the marketplace. Each of these outputs of production MUST excel at solving a very specific customer problem. The key area critical to success is to determine the highest value solution that you can provide because your business is unique and is THE ONLY business that has the ability to offer your unique solution to your customer. The easiest way to determine what value the customer needs the most is to ask open questions and listen carefully to the answers.
Please leave us your comments so we can tune our posts to your needs. That way we can provide maximum value for your time and attention.
Thanks for following our advice.
Contact us at 248-446-2626 with further questions or needs.
Here is a favorite quote from Napoleon Hill. Enjoy!
BEFORE WORRYING ABOUT HOW TO GET MORE PAY,
TRY THINKING HOW YOU CAN DO A BETTER JOB AND YOU MAY NOT NEED TO WORRY.
When you devote your time and efforts to doing your best at every job you do, instead of developing persuasive arguments why you should be paid more for what you do, the pay raises will take care of themselves. When you approach every job enthusiastically in a spirit of friendly cooperation, you distinguish yourself from the vast majority of people whose primary concerns include breaks, benefits, paychecks, and quitting time. Don’t complain about your status or your pay to anyone, not even to your best friend. Word will eventually get back to the boss. Which type of worker would you rather have on your team: one who complains constantly or one who is always helpful, cheerful, and reliable? This positive message is brought to you by the Napoleon Hill Foundation. Visit us at http://www.naphill.org.
We encourage you to forward this to friends and family. They can sign up for this free service at our web site. If you would like to stop receiving these thoughts, please go to http://www.naphill.org.
We are constantly amazed by the number of companies we find that work so very hard to become textbook examples of a commodity; something readily available from a number of sources. They assume that if they do everything their customers ask them to do their future is secure. It couldn’t be farther from the truth.
They spend a significant portion of their customer “face time” with their customers’ purchasing department personnel developing relationships rather than engaged in broad communications to the whole organization to uncover opportunities to develop unique value. They find themselves constantly struggling to reduce their product selling price (and cost) when it should come as no surprise that commodities are driven by the customer to be the lowest price through competitive bidding.
The reality is that although personal relationships are certainly very important to establish and maintain, it is the ability to differentiate and create value that leads to growth and longevity. Most purchasing department personnel have a goal to make virtually everything they buy a commodity to reduce the price, increase quality, broaden availability and reduce lead times.
So the same people most businesses focus their energy on are the people intent on driving them to be a commodity.
So what do we mean by differentiation and value and how are they developed? Early in my career I spent a few years dealing in “commodity” products for the automotive industry. There were numerous sources capable of providing the same capabilities and products. It was a cost reduction war purposely developed by the customer and bought into by the majority of the supply base.
So how did we differentiate ourselves and gain market share?
At the time, scheduling logistics were handled by the production control department of the customer. This was a department separate from purchasing, with hundreds of people, whose job it was to assure the assembly lines were never short of parts. The focus on quality had just begun and the ability to provide quality parts was a major requirement from the customer. Rather than just complying with the production schedules as they were released, we educated ourselves on the ordering process from the assembly plants all the way back to the production control departments. We were one of the first companies in the industry to create a department whose only job was to visit and stay in close contact with the personnel at the plants who were responsible for calculating and managing the flow of parts to the assembly lines.
How did this allow us to create value and increase our market share?
We understood the dynamics from start to finish on how our parts were used and controlled and through our visibility to the manufacturing plants we were also aware of when, where and how our competitors had quality or delivery problems. Having this information we were able to selectively build inventory on competitors’ troubled parts and ship our alternate whenever an emergency and the immediate need for another source arose.
We grew 15% in one year simply from this ability and knowledge!
There are numerous ways to differentiate and create value if the business has the will and commitment to do so. The nature of the conversation with the customer must change to be successful. It needs to move from personal relationship building and discussions on day to day issues to an ongoing open dialogue on how to improve the performance of the customers’ business, not yours.
Your business will naturally benefit from the superior customer value you provide by doing so.
The moral of the story:
Spend at least as much time understanding your customers’ business as you do your own and find and fill the needs they are not expressing on a daily basis.
Next: How to develop the dialogue and create the environment for successful fact finding.
Please join our mailing list so we can keep in touch. Thanks
For more information, call Gary Gauthier at 248-672-1943.
Customer Value can be found and created with every contact you have with a customer, starting with your marketing before the prospecting stage to the order follow up and beyond stage of the relationship. The primary focus must be; “how can we improve your business”? It is important to remember that in many cases what the customer states they want is not necessarily the best solution to what they actually need.
Our analysis leads us to structure the relationship into 3 phases: Insight, Innovate and Implement. Without these three sets of activities taken approximately in order, we have found clients fail to comprehend true customer needs and consequently cannot diversify effectively or to find lasting ways to grow their businesses.
Insight consists of those processes that look outward to the general business environment to determine why the customers you have now buy from you and what needs you are not currently addressing. What we are trying to find is the market’s perception of your core capabilities and how those capabilities can be leveraged to provide new and lasting value to the customer. For some companies the core competence will be delivery in least time, lowest price, best quality or the ability to build strong and lasting relationships with the company’s ownership.
For others the answer will be that they have instilled evolution as a core tenet of the business. These kinds of businesses are expert at creating a series of evolutionary and, in rare cases, revolutionary products and services that their customers need, want and value.
Most often these new products and services result from a business that asks itself “What can I do TODAY to become more valuable to my customers and…How do I start RIGHT NOW”?
Innovate, the next phase of customer value creation, begins with a detailed analysis of these core characteristics, strengths and abilities that come from inside the enterprise. This introspection can be painful but must be completed in a brutally honest manner to be of maximum benefit. These characteristics would include any organizational, technological or equipment uniqueness or special methods used to produce your offering in a faster or higher quality manner than your competitors, etc., and then leveraging these capabilities to create new value for your customers. In some cases the capabilities required may need to be developed or acquired for success.
Implement, the final phase is to develop the NEXT valuable product or service in the most time and resource efficient fashion and to produce and deliver this new item to meet or exceed the customers’ expectations.
So, OK, Let’s get started.
Select a small number of stakeholders, who could be owners, general managers, line clerical and plant floor workers who will form your pilot team. This team should be as diverse as possible for best results but must be led by senior management that is truly committed to the process and open to allow the team to chart its own course.
The mission statement of this team is:
First agree who your top 5 (or 10) customers are and call or (preferably) visit them in person. During your contact, seek honest discussion as to what your company provides them beyond merely the products or services they pay for by creating an open dialogue around what might be currently happening with their business that your products are used for.
An example might be that that the customer believes we have the best quality or delivery or return policy or other characteristic important to the relationship but your team must determine how the customer values each of these characteristics?.
If “lowest price” or “cheapest” show up in their answers, your company is in imminent danger of extinction because there will ALWAYS be someone that can (or will) provide a like product or service for a lower price.
True lasting customer value is only created by your ongoing ability to anticipate and deliver on the customer’s unstated and unmet needs.
We have a framework for these outside analyses available on request. Please e-mail for one today!
Call us at 248-446-2626 if we can help.
E-Mail: Dave.Gingrich@valuecreationassociates.com
Value Creation Associates’ goal is to provide leadership and assistance to change failing companies into good companies, good companies into better companies, and better companies into great companies. To do so we believe there are 4 primary tenets that must be followed; (1) Commitment from the top down in the organization, (2) Focus on the target opportunities that are identified through the process, (3) the Discipline to stick with the process in light of whatever else is going on in the business; and (4) the willingness to uncover and face Reality regarding the true capabilities and competencies of the business.
If we cannot establish the first three with the owners and management team, Commitment, Focus and Discipline, it is virtually impossible to deal in the fourth, the Reality of the situation. Our objective is not to placate management by telling them what they want to hear to gain long term consulting agreements. We get to the facts/reality rather than dealing in speculation and opinions.
The process is not for every company and is not easy in many cases because it requires a good long look in the mirror at the true value of the company to its customers. Once we successfully uncover value opportunities, if they exist, we can then work with the company to develop strategies and action plans to attack the opportunities.
If we are unable to clearly indentify new opportunities, you will at least gain an experienced outside perspective on the true strengths and weaknesses of your organization with possible means to improve the status quo.
We also realize that some companies will choose to only engage us for the initial assessment and then develop strategies and action plans on their own. That is fine with us but understand that you will not be taking full advantage of our many years of experience in doing so.
So how does the Value Creation Associates process work?
As noted in a previous article, early success by a company can lead to being influenced by customers to do what they ask, not what they need. To put value versus product and services in perspective it is important to review the history of the company to uncover where today’s strengths and weaknesses are and how they evolved.
A tool we use is a process we’ve developed called WITH3 or What In The Heck Happened Here. We use a 2×2 matrix with elements of control or uncontrolled and planned or random to map the evolution of major developments from the company’s history. The quadrants then range from being in unplanned chaos at one end of the spectrum to being strategicly successful at the other. When the additional dimensions of scale, duration and timing are added the driving factors of the company’s growth are uncovered.
Once the history and evolution are better defined the strengths and weaknesses become apparent as they relate to the key matrix elements of control and planning. This also makes evident points of differentiation to competitors if the competitive landscape is understood. If not another phase needs to be completed to determine and measure the strengths and weaknesses of competitors.
The matrix can also highlight organizational issues that may be impeding or accelerating growth.
With these details in hand the next phase of the process, Market Sensing, can be initiated. We will discuss this phase in a future article. We hope to hear from you soon.
