3 Critical Identifiers of Business Value

3 Critical Identifiers of Business Value

The real role of any business leader is to ensure the longevity of an organisation.  This means creating enduring value for the enterprise.

After all, strategy development is really about value creation.  Unlocking the valuable assets and resources (eg: people, equipment, processes etc) in an organisation and leveraging them, so that the organisation realises maximum benefit.

What makes value creation difficult is that the majority of organisations are blind to their strengths. They don’t really know themselves.  Yet, it’s these strengths that can be used as a powerful force to drive growth.  Over the years, I’ve worked with countless organisations that didn’t see the same value that their customer saw in what they offered. Often, the value was much greater and even more valuable than what the company realised (or sometimes – not so much).

Most individuals are blind to their strengths and weaknesses.  The same goes for companies.  It’s only until someone points it out to us, that we can finally see what everyone else can, but us.  It’s totally true that you can’t see the forest for the trees because you’re too close.

Take an example of a mid-market construction supplier company with $100 million in revenue with account managers that excelled in face to face customer relationships.  The organisation was rightfully proud of this and thought it was their strength.  They commissioned my company to create some marketing videos that focused on their customer service.  Yet, after I conducted a few depth interviews with customers it quickly became apparent that while customers liked the account managers visiting them, they were not faithful to them.  Yep.  That’s right.  They cheated on them frequently and didn’t feel guilty.

Despite the close relationship and great advice they received from the account manager, they would still order from the competitor because they had the cheapest price.  When the competitor couldn’t deliver (because they couldn’t handle short lead times), only then would they order from my client knowing that they would have to pay more, but they would get their delivery on time.  In fact, customers would receive two quotes and put my client’s price into their spreadsheet, but hope that the competitor would deliver on time, so they’d get a good saving.

There are many issues with this example.  The first one is that customers didn’t appreciate advice and high touch customer service, as much as my client believed.  What they really valued were the short lead times, so they could get product when they where in a pickle.  And by pickle, I mean, liable to face exorbitant late fees from their client that could totally put their construction project in the red.  Even picklier, the competitor was renowned for not delivering on time, so they were frequently putting their projects at financial risk.  Further, customers were (frustratingly) price driven.  Our marketing strategy was to focus on the benefits of the advice that saved time and money during the construction process, but of course, emphasise shorter lead times that averted expensive delays.  By pivoting the marketing message, so that the actual value customers saw was transformed into what they wanted (short lead times, time and money saving related to customer service), the company increased sales by 11% in a competitive market.

Unfortunately, this client didn’t see the issue in the gap between what they perceived customers valued and the reality.  Another option the company could have chosen was to provide a discount for those who ordered early, thereby reducing the frequency of competitor orders. The company chose not to test that option.

Value Proposition

Despite what most people believe, what drives their buying decisions is based on emotion.  Being able to emotionally connect your messages to customers, helps them instantly understand why they need your product.  My client wasn’t telling people why they needed the advice and the associated benefits, so companies were accepting free coffees and chit chat without seeing any real advantage.

Yet, the truth is customers are only price driven when they don’t see value.  Rather painfully, sometimes companies that don’t see your value aren’t the right ones, particularly when they like to cheat on you.

That’s why it’s so important to be really clear on who the right customer is for you.  And by that, I mean profitable customers that value what you do and refer you.  And they’re faithful.  Identifying and defining your customer is so important, if you want to communicate to them in language they understand.  The result is that it helps you create the right foundation to enable growth.  Creating a strategy based on customers that don’t value you is always risky.

The most important step is to get really clear on why you do what you do and how your company makes the world a better place.  Knowing your core purpose, your why, is critical.  That’s why it’s the starting point in my Perpetual Cycle of Value Creation (see below).

Value creation cycle

The cycle is all about the emotional connection between you (the company), your employees and customers. At the same time, it’s about value – what customers value, and your employees, and linking them all together.

When creating your next company strategy, it’s important to identify, define and deliver within each of these three steps.  The process of “naming and claiming” helps you see who you really are, when in the past you were shielded from your truth.  All three elements feed into each other.

1. Clarity of Purpose – Get clear on your why.  Your core ideology.  A mounting body of research suggests that why we work — impacts how well we work.  Get clear on this and you improve workplace productivity.

2. Customer Value Proposition – Who are the right customers?  What do they want and how do you best deliver that?  What do they value from you?  Attracting the right customers is key (that you like working with).  Being all things to all people is a self-destructive policy.  Get this right and you can improve how you brief marketing and PR companies.  Most companies get poor results in marketing because they suck at writing briefs and knowing what they want.  Your customer requirements will change over time, so it’s important to do work on your customer value proposition every couple of years.  Woolworths supermarket was caught out by this recently with the CEO claiming “we failed to realise customers were disappointed by high prices and were leaving in droves.”  He’s now no longer the CEO.

3. Employee Value Proposition – Once you know who the right customers are, you can then attract the right employees who can deliver the right service to your customers.  What do your employees value from you and do you value them?  When you really know this, then you really know and understand your culture.  Disseminating employee engagement surveys will enable you to assess your cultural readiness that measure the extent to which vision and values are shared.  These surveys qualify and quantify the fit between culture and strategy and identify where change may be necessary.

Essentially, to execute on your strategy, you need the right organisational environment that nurtures appropriate behaviours that get the right outcomes.  The right culture supports business processes that drive customer value and create competitive advantage.  In other words, it ensures your strategy gets executed.

Since the 1970s, the market capitalisation of companies on the sharemarket has changed from around 75% of their value based on tangible assets such as equipment and land to now more than 75% of the value based on intangible assets such as intellectual property and brand.  Intangible assets are created by people.  The collective intelligence of your workforce is now more important than ever before.

Unlocking your value proposition by truly understanding your hidden value, what your customers value and your employees is key.

Unfortunately, most companies don’t go into the depths required for each of these factors, creating strategies with limited value.

If you feel that you need help in getting your dark shades removed, so you can see the real value that your company provides, send me an email at marie-claire@trustologie.com.au.



Marie-Claire Ross is the Founder and Chief Corporate Catalyst at Trustologie. She is a workplace sociologist, author, speaker and consultant focused on helping leaders put the right processes in place to accelerate trust during change and growth. She does this through strategic diagnostics, roundtables, workshops, coaching and consulting. Marie-Claire is also the author of the number three ranked book on Amazon, Transform your Safety Communication. She has been interviewed on “Technology Behind Business” for Sky Business News and regularly contributes articles to FM Magazine and LogiSYM on company culture. She is also a Graduate of the Company Director’s Course and is on the SME Committee for the Australian Institute of Company Directors.


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