With the world of business changing faster and becoming more complex every decade, organizations today have to adapt, reinvent, differentiate or die. Over the past few years, the nature and intensity of these changes in the business landscape has created organizational disruption and a realistic need to redesign organizational strategy and leadership approaches.
The process is not easy, and this is why many executives in organizations decide to stay the course, bury their head in the sand, and copy and paste what others are doing. Today, businesses are realizing that they cannot cut their way to prosperity and that their growth potential has been severely reduced due to the continued recessionary trends.
They are starting to look at their business models and are reinventing their value propositions in order to generate customer excitement, boost value-creation programs and capture value through value-based pricing. These companies get it. Many, though, do not.
The following are tips on how you can embrace the value imperative and design and implement leadership initiatives to place customer value at the center of business.
Organize a series of off-site meetings with key people to have a realistic, candid and mindful conversation about your value proposition: Why are customers buying from us? What makes us truly different? Are we paying enough attention to our business model? Are we working on the right projects to support our value proposition?
This meeting should be led by top executives to demonstrate the importance of the process. I recommend you avoid the use of consultants, keep the agenda semi-structured to create conversational flow and reinforce that this is a confidential and safe environment.
Define your core
Identify what your true “core business” is that brings most of your revenue and profits: Are we bringing enough value to customers? Are we losing steam in our differentiation? Are competitors catching up on us? Does the core business need to be reinvigorated? Defining the true core business might end up being an interesting process as a team.
I recommend you avoid the use of the constraining and sterile strategic analysis tools such as SWOT analysis, market forces analysis and others. Start with a white sheet of paper and see where it takes you.
Find ‘hidden assets’
Identify your “hidden assets” that are creating excitement with customers and generating profit but that you have taken for granted, not paid attention to or underestimated. List these assets, celebrate having them and evaluate their contribution to the overall value proposition.
The definition of what a hidden asset is might get tricky, but it is worth having it. Launch the conversation of what-if scenarios: What if we had more of this or we did more of that? What would be the impact on customers?
Based on the previous steps, start redesigning your core business and value proposition by reinforcing the strengths you clearly have identified and by leveraging your hidden assets. While it is important to fix gaps or work on weaknesses, leveraging strengths and hidden assets might have a greater return.
Eventually, the result of this business model redesign process will need to be integrated in the strategic planning process. This process is critical to re-energize your value proposition and your overall business model. It is also a great opportunity to emphasize with your leadership team that all you need to do is create customer value and increase loyalty.
When times are tough, customers will make quality/performance sacrifices, will try other alternatives to reduce costs and will challenge your value proposition. My view is that the best defense is a calculated offense. ?
Stephan Liozu (www.stephanliozu.com) is the founder of Value Innoruption Advisors. He specializes in disruptive approaches in strategy, innovation and value management. He is also a Ph.D. candidate in management at Case Western Reserve University and can be reached at firstname.lastname@example.org.