Volume 90, September 2008: Value Management

Keyzine: An E-zine for Leaders about the People Side of Business

This is a monthly electronic magazine for anyone who wants to be a better leader, coach, facilitator, or simply, to tune up their people skills. It is a complimentary publication, devoted to the next evolution of Quality Thinking.

Publisher: © Key Associates, LLC, 2008 ISSN # 1545-8873

“Price is what you pay. Value is what you get.” — Warren Buffett

“Try not to become a man of success, but rather a man of value.” — Albert Einstein

“Our value is the sum of our values.” — Joe Batten

“You build on cost and you borrow on value.” — Paul Reichmann

IN THIS ISSUE:

  • What’s Hot in Leadership
  • Maintaining Yourself as a Leader
  • Frequently Asked Questions from Leaders
  • Educational Opportunities
  • Useful Websites & Newsletters
  • Articles/Publications

What’s Hot in Leadership

  • Using value as a decisive measure of worth.
  • Managing customer experience along the dimensions of cost, quality, and service.
  • Removing non-value-added work (e.g., errors and waste in processes).
  • Doing away with layering of initiatives.
  • Seeking lifetime relationships with customers.

Maintaining Yourself as a Leader

Every business seeks to create something of value in today’s competitive business environment. Those that survive do so by acquiring the right customers, building a relationship with them, and keeping valuable customers (repeat business) for a long time.

Several methodologies exist for putting measures onto business economics – value management, for one. Improving the performance of processes begins with an understanding of customer needs and requirements. Embrace your book of business to learn everything you can about adding value.

Frequently Asked Questions

“How do we know if we add value?”
Ask:
  • Does our company have the right strategy for attracting and retaining customers?
  • Are we certain that our company provides better value than our competitors? Do our customers agree?
  • Does our company have programs entitled “customer satisfaction”, “customer loyalty”, “customer delight” or “customer relationship management?” Are they are paying off?
  • Does everyone in our company understand and agree on how they contribute to the markets’ perception of the value of our products and services?
“Is there a formula for value?”
Every customer does a mini-cost/benefit analysis, when choosing a product or service.
Value = Outcomes + Customer Service/Cost
Value is Quality relative to Price. In marketing terms, a “Value Proposition” consists of the sum total of benefits which a vendor promises that a customer will receive, in return for the customer's associated payment or other value transfer (Wikipedia). In other words, what the customer gets for what the customer pays (payment and access costs).
“Is there a way to better manage the customer experience?”
One of the best ways is to be a customer yourself or to shadow another. See your processes through your customers’ eyes. This is sometimes called “The Walk of Shame.” Do their outcomes include innovation or other results that improve the quality of their lives? Does their service not merely satisfy, but delight? Does the cost include more than the price – e.g., inconvenience, discomfort, time? Count the steps, the barriers, the number of staff encounters, the pointless efforts.
We need to study processes from the perspective of removing waste or CRUD™ – Complexity, Redundancy, Unnecessary Steps, and Delays. These are non-value-adding components that drive customers to the competition. This is the core of the LEAN movement.
“How do I view processes and their improvements?”

Exercises and Action Items

  • Pin down exactly what “value” your business banks on. Where are you “value-adding?”
  • Mystery shop or otherwise shadow your customers’ experience. What is their “cost” to do business with you? Where are the waits, delays, redo’s, aggravations?
  • Become a “CRUD-Buster.” Remove one piece of waste every day.

Education

Managing the lifetime profitability of your customer base: Customer Value Management.

Blogs about Customer Value Management (CVM).

Key Associates offers Customer Service and Value Management training, facilitation, and consultation: Contact us.

Useful Websites & Newsletters

The value creation process: Deep Insight.

The voice of the customer in value measurement: Market Value Solutions.

Keyzines on related topics: Lean Does Not Have to Be Mean, Bureaucracy, Whither Quality, Picture of a Process, Lean Organizations, and Balanced Scorecard.

Articles/Publications


 

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