Kicking your value up a notch

For many owners and department managers, focus represents the biggest roadblock to corporate growth.

It is not exactly a lack of focus, while this does plague some serial entrepreneurs (wink), it is more the tendency to unintentionally focus on the wrong things.

Because successful growth comes from focusing on the right things, it is helpful to keep what your customers value, or pay you for, in the forefront of your company's activities.

Unfortunately, the term "value" is one of those undefined and nebulous business concepts.

It sounds good, and important, but not easy to get your arms around.

It's the thing that makes something sweeter, better, stronger, faster.

You can have pancakes without syrup, but what is the point? It's the icing on the cake.

The result of providing superior value is wildly satisfied customers who keep coming back again and again with their friends.

When the benefits of a product or service outweigh the costs, you have value.

If providing more value and better value has such great returns, why not kick your value up a notch? To do so, you need to create value for your customers better or differently than your competitors do.

You do so by executing a clear organization-wide strategy that is based on your specific value proposition.

There are three generally accepted value propositions:

* Providing the lowest cost through operational excellence,

* Providing the best products/services through continued innovation, and

* Providing complete customer solutions through intimately knowing their needs and wants.

In case you are tempted to execute all three, think again.

That's called "stuck in the middle." Executing a stuck-in-the-middle strategy is like being in the middle seat of a five-seat row on a 747.

You don't know whether to crawl over the mom with her sleeping baby to the right or over the guy with his laptop to the left.

It's not a good place to be! Companies that find themselves in this position usually end up in a crisis or reorganization.

That said, this does not mean you don't do the other activities well.

You just don't focus on them as much as the ones that are central to your value proposition.

Selecting your value proposition really comes down to this: What do your customers value the most about what you are providing them? The low prices? Your cutting-edge products? Your ability to deliver a service that fits their needs exactly? Take a look at each option to see which strategy is the best fit for your company.

Creating value through excellent operations Companies that continue to offer the best buy or lowest cost through their excellent internal operations include Wal-Mart, Southwest Airlines, Dell and Ikea.

An operationally excellent value proposition sounds something like this: "We offer, produce and services that are always consistent, on-time and at the lowest cost." To get there, you need to master your operational processes.

This includes outstanding supply-chain management, super efficient operations to control costs, reduce cycle time and increase quality as well as manage your inventory ruthlessly.

A plumbing, heat and air conditioning company creates outstanding value through a real-time data system.

All of the company's technicians have powerful PDAs that allow them to accept service orders, respond to them, and close them all in one smooth process .

Through this data system, the company cuts down its operational costs by reducing drive time, service order data entry, error rates due to lost orders and billing costs.

Its customer satisfaction has soared because most service orders are responded to on the same day as requested; there is no surprise bills and its prices are the lowest across the board.

Creating value through innovation Companies that are always on the cutting edge of their industries include Intel, Mercedes, Sony and Salesforce.com.

A product/service leadership value proposition sounds something like this: "We offer products and services that expand existing boundaries past what was thought possible." To get there, you need to master your innovation processes and develop an innovation culture.

This includes a pipeline full of new ideas, a conversion rate of ideas to production, excellent and quick product development processes, and marketing and sales departments that can bring the product to market quickly.

Instead of learning Spanish by going to classes or hiring a tutor, for instance, Speak Shop created a web-based application that allows students to learn from Spanish tutors in Guatemala through video and voice conferencing.

The company was first to market with this innovative method to connect students and tutors in their homes or at work.

To maintain its first-mover position, the company continues to add functionality such as quizzes, lesson plans, curriculum and discussion boards as well as enhance the core product.

Creating value through really knowing your customers Companies that are providing complete customer solutions include Nordstrom, Goldman Sachs and Cabela's.

A customer intimacy value proposition sounds something like this: "We provide the best total solution to our customers because we make a practice of know exactly what they need." To get there, you need to master your customer processes and develop a customer-focused culture.

This includes offering as many products and services that your customers are looking to you to provide.

That means you solve the problem or need that your customers have, completely.

JotSpot, a rapid software development company, develops tools for online collaboration.

Based on customer feedback, the company develops additional tools and online applications specifically to meet the needs of their growing client base.

In fact, JotSpot is so focused on its customers; it provides an online forum and training for customers to develop their own collaboration tools using its platform, for free! Talk about getting real-time customer feedback, the developers at JotSpot use customer-developed applications to build new tools for everyone's use.

Your company is operating in its sweet spot when you are focused on what you are good at doing, what you like doing, and what the market values you for doing.

Connecting the dots between these three elements is critical because without it, organizations can easily lose focus on what their customers and the market really value.

Erica Olsen (Erica@m3planning.com) is a principal of M3 Planning, a Reno-based company that operates MyStrategicPlan.com, a web-based strategic planning site for small and medium businesses.

She is also the author of the upcoming book "Strategic Planning For Dummies."