Posts Taged value-creation

The One Year, Thirty Minute Challenge :: Week 49 :: Leadership :: New Supervisors

Some of the most important work in your company is the work that happens on the front line – when your team members interact with customers. That work drives lifetime customer value – the total revenue available from a customer over the course of their relationship with your company – plus the referrals they provide. Many times, you entrust that work to the lowest-paid person in your company. Someone with the least amount of experience, the least amount of training, and sometimes, the least amount of problem-solving skills.

That’s what makes your front-line supervisors so important. They schedule, train, and manage these key players in creating value for your customers. Many times, these are folks who have been promoted to supervise their former front-line coworkers. They’ve distinguished themselves by selling more, building greater rapport with customers, and/or solving problem better than their peers.

This week’s One Year, Thirty Minute Challenge is devoted to crafting a framework that will maximize their effectiveness in their first supervisory role. If your company is committed to promoting from within, this is the feeder system for your future leadership team.

I want you to craft a plan that equips your newly minted supervisor for success. It needs to strike the right balance between developing supervisory skills and mastering new operational details required for their increased responsibilities.

For this week’s exercise, I’d grab the people to whom your front-line supervisors report. Depending on the size of your organization those could be your executive team or they could be lower-level managers. Spend the thirty-minute exercise focusing on three essential skills for new supervisors – personal growth, position mastery, and employee development.

Personal Growth – It might seem a bit daunting after being promoted to their first supervisory role, but lead the new supervisor to, as Stephen Covey reminded us, “begin with the end in mind”. Here are some questions to answer (in no particular order).

  • What will the exit from this supervisory role look like? What is the typical career path next step for someone in this supervisory position?
  • What skills will the new supervisor need to access those future opportunities?
  • How will their supervisor help them transition into this new position, hone the skills needed for the position, and build skills for future positions?
  • How will their performance be measured in this position?
  • How will the new supervisor identify and develop candidates that will ultimately become their replacement?
  • What existing skills can they leverage and grow?
  • What existing weaknesses can they shore up?
  • How can they get sufficient knowledge in areas in which they are deficient – maybe not resulting in mastery, but at least in becoming “BS-proof”?
  • If your organization has an employee development program (which I believe every organization should), much of this should be included there. Use the link above to see the One Year, Thirty Minute Challenge devoted to employee development programs. However, the development of new supervisors deserves special attention in the organization.


Position Mastery – If there’s one activity that consumes a front-line supervisor, it’s problem solving. So equipping them to become better problem solvers automatically makes them better at their job and move valuable to the organization. Effective problem solving involves empathy, knowledge, creativity, and authority.

  • Give your new supervisors policies that empower them. Front line employees without the authority to solve problems frustrate customers. Supervisors without the authority to solve problems frustrate them even more. If you don’t give your employees and supervisors the ability to solve problems, the problems are going to land on your desk. If that’s happening, what exactly are you paying those employees for? Good policies are like guardrails on a highway. Your employees are on safe ground using their creativity to solve problems as long as the solution is anywhere between the guardrails.
  • Give your new supervisor principles that keep them focused on the outcomes you want. What does the ideal customer experience look like? How can they engineer a resolution that delivers that outcome? What communication would be consistent with the company’s brand promise? How can the resolution of a problem help execute the company’s mission? How can the resolution of problem help the organization reach their vision?
  • Help your new supervisor gain a bigger perspective. Front-line employees almost exclusively work “in the business”. An employee’s first supervisory role might represent their first opportunity to work “on the business” albeit in a very limited way. Help them tie their new supervisory responsibilities to bigger ideas like lifetime customer value, employee development, teamwork, organizational health, and value creation. Some employees will “get it” immediately. For others you might have to connect the dots. For example, explaining how taking an extra 5 minutes to email a customer a summary of the steps you took to replace their faulty, but technically out of warranty, widget will result in boosting their lifetime customer value because they’ll be more likely to purchase from you in the future – and encouraging them to do similar things with their new direct reports.


Employee Development – For some of your new supervisors, they’ll be “boss” to the people with whom they used to work shoulder-to-shoulder. Some of those people might have been up for the same position and were passed over. And those passed over might still be convinced they were the most deserving candidate. It’s a transition that a lot of new supervisors struggle with. There’s not a magic bullet that causes the disappoints to subside and harmony to magically return. Some sage advice from Zig Ziglar applies here, “You can have everything in life you want, if you will just help other people get what they want.” Instead of turning his/her attention to “bossing”, I’d suggest the new supervisor turn their attention to employee development. Early and often, they should demonstrate their commitment to growing that staff and you should help them do it.

  • If your company has a formal employee development plan, get the new supervisor up to speed on how to utilize it as a supervisor (they should already understand how it works as a subordinate). Have them review the already-in-place plans for the staff they are now supervising. If your company does not have an employee development plan, work with the new supervisor to create a framework the supervisor can use to document the goals of their subordinates, the milestones to reach those goals (with timeframes), and the steps to reach those milestones.
  • By your example and by specific instruction, show the new supervisor how to explain the “why” behind company policies. Employees who understand the “why” make better decisions and talk more intelligently with customers than those who repeat policies by rote with no understanding of the underlying reasoning. Let the supervisor know it takes longer but returns outsized rewards.
  • Help the new supervisor build a unified team with a solid operational framework. Tools like 4DX, OKRs, EOS or my Business Framework, get teams aligned, pulling together, and tied to overarching company initiatives.


Of all the things that go on inside an organization, very few, if any, are more important that employee development and very few employees have a more pivotal role in value creation than front-line supervisors.

As you work through this week’s exercise, identify the activities that are most applicable in your organization. You might end up with a couple of variations based on the departments or divisions where the new supervisors are working. Then work to flesh out the framework with tools, checklists, and activities.

The One Year, Thirty Minute Challenge :: Week 34 :: Strategic Planning :: Creative Destruction

Someone else would like to take your customers. Any time an industry, company, product or service attracts a crowd (and the revenue the crowd generates), there will be host of fast followers who show up and try to siphon off some of that revenue for themselves or try to grow the size of the market so they can have a piece of the market share and revenue.

Those fast followers have a few options – create a better version of the original product or service, create a cheaper version of the product or service, create a product or service that is complimentary to the original product or service or re-solve the original problem in a radically different way – rendering the original product or service obsolete.

Let’s illustrate with personally curated portable music. For years, portable music took the form of radio. Other than choosing a station that played the genre of music you liked, you were unable to curate your own listening. Then, in the mid-1960s, Bill Lear (of Learjet fame) invented the 8-track tape player (I had one in my first two cars). You were able to choose albums produced by your favorite artists. It was subsequently replaced by cassettes (again complete albums), then CDs (still complete albums), then downloadable digital songs (on iPods and similar MP3 devices) and now streaming online music (the latest two both offer choices of mingling genres, albums and individual songs). Each of these successor technologies destroyed the commercial viability of the previous technology. Companies that failed to embrace the successor technology became irrelevant and, in some cases, closed their doors.

Recent history is loaded with companies that failed to re-invent their value creation proposition and paid the price – Blockbuster, Kodak, Polaroid, MySpace, Yahoo, Blackberry – just to name a few. These all have a tech component but there are plenty of non-tech related companies that have failed to remake their value creation activities – Toys R’ Us, Sears, Radio Shack, Borders, Circuit City.

Joseph Schumpeter popularized the term “creative destruction’ in his 1942 book Capitalism, Socialism and Democracy. According to Schumpeter, the “gale of creative destruction” is the “process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one”. This is what makes capitalism an engine for creating wealth for those who identify a problem and find a commercially viable solution to that problem. At the very same time, those who cling to solutions that are no longer commercially viable will find their ability to create wealth wiped out.

Let’s jump into this week’s One Year, Thirty Minute Challenge. I have three goals for this week’s exercise –

  • I want you to examine your value creation activities for your existing product or service.
  • I want you to ponder successor products for your existing products or services.
  • I want you to examine the competitive landscape for someone who is introducing a product or service that poses a threat to your existing products or services.

Value Creation for your Existing Product or Service

Your existing product or service might be in demand and effectively solving a customer’s problem. That’s great. But what if a competitor could introduce a similar product, but at half the price due to a new manufacturing technology? Not all creative destruction means retiring or remaking an existing product or service. It might mean destroying and remaking the methodology for creating or delivering your product. Are there new technologies, new contract manufacturers, new materials or even streamlined processes that would allow you to manufacture your product or service faster, with higher quality or cheaper? Are there new delivery channels or options that would allow you to get your product or service in the customer’s hands faster, cheaper or with a better customer experience?

Successor Products or Services

When you’re pondering creative destruction, the goal is not always a better mouse trap. Before cars were introduced, people just wanted faster horses. They never envisioned a “horseless carriage”. You’re after a better solution to the problem you’re solving for your customers – think digital camera vs traditional film or Netflix vs Blockbuster. Is there a better way to solve the same problem for your customers? Can you piggyback on other infrastructures or technologies? Can you partner with another company to create something that neither company could do on their own? Is there a methodology from another industry that’s never been used in your industry, but could be leveraged to solve your customer’s problem?

Surveying the Competitive Landscape

The worst place to be in the world of creative destruction is behind the curve. Someone else has already solved your customer’s problem in a better way and they’re already eating into your customer base. The early adopters have switched to the competitor’s product or service and it appears to be going well. One quick warning – the scrapheap of failed businesses is primarily populated by companies who got to this point and stuck their head in the sand – “Nobody wants a computer in their house”, “The internet is just a fad”, “People want real pictures they can hold in their hands”. Don’t be that company. Take competitive threats seriously. So, what do you do as you survey the landscape? If you’re still strong and the successor product is just getting out of the gate, they might be an acquisition target. In the right circumstances, you might be able to buy them outright. If they’re undercapitalized, they might need some cash to grow and you might be able to buy a significant stake and ride the elevator up with them. In other cases, you might be able to create a competitive product and leverage your brand, bigger war chest and existing customer base to beat back the new entrant.

The big idea in this week’s exercise is to never be lulled into complacency. Great companies earn it every time they go into the marketplace. They reexamine their products, services and delivery methodologies to make sure they are always solving the customer’s problem in the best way possible.

The One Year, Thirty Minute Challenge :: Week 11 :: Value Creation :: Experiential Value

If you or I were swinging through a fast food drive through and placed an order for one of their value meals and the voice on the speaker announced they’d be collecting $25 at the window, we’d put a quick halt to that order. Why? Is it because we’re opposed to paying $25 for a meal? Probably not. We’ve most likely paid $25 or even more for a meal at our favorite restaurant. We’re just opposed to paying $25 for “that” meal, because the value proposition doesn’t work for us. $25 should buy us a better dining experience than a burger wrapped in paper, fries in a tiny cardboard box and a soft drink in a paper cup.

Experiential Value is the gap between what the customer pays for our product or service and the worth and enjoyment the customer experiences from the purchase. We want the gap between what the customer pays and pleasure they derive from the purchase to be as far apart as possible. We’ve already visited value creation in the short history of The One Year, Thirty Minute Challenge, but we’re going to touch on it again – this time, exploring steps to maximize the customer’s experiential value.

We’re pretty good at calculating Economic Value because the math is very easy

The math for calculating Experiential Value is a bit more squishy because it involves the sometimes subjective value that the customer assigns to his or her experience with our product or service.

How do we do build the experiential value? I think some of the best advice comes from an extremely practical book by Rich Karlgaard, The Soft Edge. In the chapter he calls “Taste”, he reminds us that we can interact with every purchase on three levels. Unfortunately, we rarely do. Let’s talk about them.

Function – Form – Feeling

Function is the most rudimentary level. I purchase an oil change for my car and I get an oil change – new filter, new oil – very transactional. I got the service and I paid the bill. Even if the product or service is a bit more sophisticated, it can still be only transactional. It could be a new computer, a medical procedure or meal at a sit-down restaurant. As long as there’s an equitable trade, we’re satisfied with the transaction. Clearly if we get less than what we bargained for, we going to feel jilted. We might ask to speak to a manager, leave a one-star online review or most likely, never return. But, if the transaction works, we might come back. Nothing special, but not a disappointment either.

Form is the next level of engagement. Was the item we purchased not only functional, but beautiful? I not only got a good diagnosis and treatment in the medical office, but beyond that, it was a bright, cheerful waiting room, it was easy to check-in and the magazines were from at least this decade. This level of engagement made the transaction easy and even pleasurable. Next time I need this product or service, I’m likely to return because both the product and the delivery were great.

The last level of engagement, Feeling, is hard to find but it cements customers to the company that provides it and it even forges personal bonds between the customer and representative of the company. It imbues the transaction with meaning. The customer connects with the company over shared values and the customer feels validated for choosing this company to provide the product or service. Simon Sinek might call this finding customers that share your “why” or Seth Godin might call it finding your tribe. Whatever it is, it’s a connection that turns customers into brand ambassadors. It’s the company that you tell your friends about. It might be the great meal delivered by a friendly, attentive server. It might be the doctor who delivered bad news, but sat there in the treatment room until your last question was answered and seemed totally unhurried even though you knew other patients were waiting. When customers connect on feeling the bond is strong – loyalty is high and can drive premium pricing – because the relationship has moved beyond transactional to a desire to repeat that feeling. Any employee can deliver feeling with the right amount of coaching and the right support from the organization.

Why have I gone to great length in talking about delivering function, form AND feeling before kicking off this week’s exercise? Because measuring the distance between what the customer pays and the enjoyment they experience is hard to do, but the payoff is big and the payoff is long. Here’s another important thing to know about experiential value – it buys you a mulligan or two. If you fail, you’re most likely going to get a chance to make it right – maybe multiple chances. But, like all business transactions, you ought to work like crazy to earn it every time you get the chance.

So, let’s jump into this week’s exercise.

This is getting mentioned almost every week – gather your most trusted team members and work through these topics. Doing this with your team allows you to mentor and to see the strengths of various team members as they embrace the subject matter. It might also allow you to identify topics for employee development. Keep notes, create action items and assign them to specific people to carry them out. In a couple of weeks, reconvene and check on progress.


How does your product (list the factors) deliver the basic functionality that your customers seek? For example –

  • it’s a fairly-priced, quickly-served, tasty fast food meal
  • it washes dishes using an appropriate amount of water and detergent in an acceptable period
  • we show up on time and the garage door works when we’re done

For the question above, which of these rudimentary tasks could we screw up the easiest, causing us to fail at the most basic level? For example –

  • We frequently schedule jobs too close together causing us to miss appointment times
  • The final price regularly comes in above the estimate
  • We frequently run out of items on the menu

What can we do to hedge against failure in delivering these baseline products or services?


How can we improve the delivery experience?

  • Can we communicate better before, during and after the sale?
  • How can we improve customer onboarding so that expectations are clear and realistic?
  • Can we make the product or packaging more attractive?
  • Can we improve usability making the product easier to access?
  • Can we make the invoicing and payment process easier or faster?


Can we make customer feel smarter, better or more noble by purchasing and using the product or service?

  • Can we show that the value proposition is demonstrably better than the value proposition for those who purchased competing products? If your warranty is twice as long as your competitor’s, let the customer know they are insulated from problems twice as long as everyone else who bought a competing product? They made a smart purchase.
  • Can we give them access to a customer service experience that will get them immediate help if they need it?
  • Can we show that they supported a cause (think Tom’s shoes) or a group of people (a locally-owned family business or a group of now fairly-compensated foreign farm workers) with their purchase?
  • Can we identify our connection (a real connection, not a contrived one) with a group of people to whom they already feel connected (veterans, environmental advocates, gun owners, local business owners, artisan food makers)?


One quick note about all of this. Customers and potential customers can smell a phony a million miles away. Function, form and feeling have to be delivered by an organization that sincerely embraces a desire for an excellent product or service, delivered in a winsome way by people who sincerely care about and want to connect with their customers. Anything less and none of this works.

For those who do it well, delivering on function, form and feeling will generate increased loyalty and create enthusiastic brand ambassadors for your organization.

The One Year, Thirty Minute Challenge :: Week Eight :: Value Creation :: Vendors

Vendors can be a critical path component in your value creation chain or they can be a completely undifferentiated source for something as mundane trash can liners. Regardless of where they fall on that spectrum, they’re going to get some attention in this week’s One Year, Thirty Minute Challenge.

The vendors you use for commodity purchases probably don’t significantly impact your ability to build sustained competitive advantage. However, even these vendors can cause some grief if they’re late with orders, have inexplicable pricing or returns policies or are chronically terrible at resolving screw-ups. With the wide variety of vendors available for these commodity purchases, spend a little time finding one who anticipates well, is conscientious and is easy to do business with. Enough said.

On the other end of the spectrum are those vendors who are deeply ingrained in your value creation chain. These vendors are partners in every sense of the word. We often call this special vendor relationship outsourcing. At the outset, outsourcing was typically something that large businesses did to save money. Call centers were moved halfway around the world to take advantage of a skilled workforce that provided services for a fraction of what a domestic workforce was paid. Factory workers building TVs, shoes and hundreds of other items allowed manufacturers to keep costs low, pass along savings to customers and boost profits. But since the beginning, outsourcing has changed dramatically. Now, businesses, large and small, look to outsource vendors to –

  • obtain specialized services they don’t possess in-house
  • get services that the outsource provider does better than they to do it in-house
  • easily scale up and down to meet fluctuating demand
  • focus their attention on core value creation activities while outsource providers take care of tasks that don’t add value to products or services
  • resell additional products or services that they do not produce in-house
  • provide services more economically than they can in-house


So, let’s jump into this week’s One Year, Thirty Minute Challenge.

For what disciplines in your organization might outsourcing make sense?

Early discussions on outsourcing targets focused on core vs context activities –

  • Core being those activities where the company was creating value for customers – the activities that made the company unique.
  • Context being those activities that provided the company no additional brownie points with customers even if they are done perfectly.

The conventional wisdom was to outsource context and keep core in-house. Current thinking is a bit different. Skilled outsource providers now deliver services that empower employees to do better work and enable the company to deliver better products and services to their customers.

Here are some options for outsourced services. Some might be on your radar now and some you might not have explored yet. Read through the list and see if any of these might improve company operations, improve customer experience, mitigate risk or boost the bottom line.

  • Payroll – Managing payroll related documents, collecting hours worked, calculating paychecks, cutting checks, making direct deposits, providing year-end tax documents, providing management reporting and providing an online payroll portal for employee self-service. Beyond these core services many providers deliver extra unique services like 401Ks.
  • Human Resources – Providing training, consulting and resources for hiring, development and termination. Providing templates for important documents like non-compete agreements and non-disclosure agreements. Providing insight on the broad variety of pre- and post-employment assessments available. Ensuring client compliance with ever-changing federal and state employment laws.
  • Bookkeeping – Entry of financial data, accounts payable, accounts receivable, general ledger and invoicing. Providing management reporting and filing.
  • Accounting – Providing management reporting, advice on cash management, use of debt and equity financing, tax preparation and minimization of tax liability, collections, shareholder relations, business growth, business valuation and more.
  • IT Infrastructure – Building and maintaining wired and wireless internal networks, internet access, deployment and maintenance of desktop, portable and mobile hardware, data security, backup and disaster recovery, email, desktop productivity software, collaboration software, integration with third-party software providers (CRM, ERP, SCM)
  • Big Data/Analytics – Using data from transactional systems (CRM, Accounting, ERP, etc) and sometimes supplementing with data from external sources, performing analysis and providing actionable insights on trends, patterns and associations previously undetected.
  • Outbound Logistics – Managing all facets of storage and distribution after goods are produced. The provider often picks up items directly from the end of the assembly process and, with information from the client’s order entry system, either warehouses, forwards to another location for additional processing or ships the item leveraging a larger and often times more sophisticated distribution system.
  • Marketing – Help with branding, identifying target markets, messaging and choice of mediums. Some firms provide advertising design and procurement, website design and development, SEO, paid search, social media management and advertising, print collateral, email marketing and CRM systems.
  • Lead Generation – Identification of prospective clients, initial contact, lead development and appointment setting. Firms employ a range of methodologies including email marketing, telemarketing and LinkedIn prospecting.
  • Consultants – With a broad range of disciplines available, consultants provide short-term, mid-term or long-term engagements in areas like strategic planning, execution, operations, customer experience, process improvement, leadership, management development, technology, marketing or project management. Utilizing a consultant allows an organization to “rent” expertise not present in the company or to extend the reach of expertise already present in the company by adding additional resources.


Evaluating Existing Vendors

For vendors already in the fold, use these criteria –

  • Do they communicate regularly, clearly and completely about the status of new initiatives, ongoing projects and problems?
  • Do they provide clear, concise and easy to consume information about their performance?
    Are problems resolved quickly and completely?
  • Do you have easy access to key personnel in the vendor organization so that you can get questions answered and quickly ramp up new initiatives as needed?
  • Does the vendor organization regularly contribute new ideas or suggest new services that will increase revenue, improve customer experience, streamline operations, strengthen technical expertise, improve marketing reach or develop employees in the client organization?
  • Does the vendor provide special product or service knowledge that stops the client organization from deploying their product incorrectly or enables the client organization to use their product in new or different ways to better service the client’s customers?
  • Does the vendor suggest better or alternate products or methodologies that solve a problem more effectively for the client’s customers and feel free to intervene in suggesting the alternate products?
  • Does the vendor willingly forego business (i.e. not sell a product) if it’s in the best interest of the client or the client’s customers?


Evaluating New Vendors

Technical Competency – I’d suggest developing a list of questions by vendor type that you submit to every prospective vendor so that you can compare apples to apples when you get the written responses back. There’s not time here to do a list for every type of vendor but let me illustrate with the beginning of a list for an IT services vendor.

  • What levels of services are available and what are the response times for each level?
  • What percentage of time do you meet the required response times?
  • Tell me about the technical qualifications of the staff at each support level – certifications, experience?
  • Do you have preferred vendors for each product type? What type of compensation do you get from that vendor for using their products? How can I be assured that I’m getting in best-in-class solutions if you use only products from vendors who commission you to use their product?


Company Fit – Not all of these fit in every circumstance, but these are some of the questions I use when evaluating a new outsource vendor regardless of the service I’m seeking.

  • How long has your company been around?
  • What is the staff size?
  • What is the experience of the staff? (in years, professional background)
  • What is the turnover rate for employees? (I want to know if employees are happy working there)
  • How much time do employees spend in training every year? (I want to know if the company has a learning orientation)
  • Is any part of your operation outsourced? (I want to know what level of control they have over the people who will be servicing my account)
  • What is the financial condition of the company? (I want to know if they’ll be around next year)
  • Where is your company located? (time zones can be a challenge)
  • Who runs your company and what are their credentials and experience?
  • Have you worked in this industry before? (I never let this disqualify someone. It just tells me if there are certain industry-specific things I’ll need to educate them on)
  • How much have you spent on R&D in the last 12 months? (I want to know if the company is growing and innovating)
  • Are you insured?
  • How do you deal with ongoing regulatory compliance issues?
  • Can I get a list of references? (Call them)
  • How soon can we get started?
  • Can I see an onboarding packet or something equivalent?
  • Do you have other clients our size?
  • Who is your toughest competitor?

Run through these lists to identify new outsourcing opportunities, evaluate existing outsource relationships and be better prepared for entering into new relationships.

Vendors and outsource partners can be powerful allies in building value. Choosing and managing them can quickly improve customer experience, operations and profitability.

Would you be disappointed if 2020 looked exactly like 2019?

I’ve been asking myself that question. And now is the right time to ask it. The time between now and mid-December has been called the “100 day sprint” or “the most important 100 days of the year”. Why? Because everyone is back in the office after summer, back in the routine and hunkered down for a busy three and a half months. For some companies, it’s the run-up to a busy holiday season. For others, it’s time to prepare 2020 strategic plans and operating budgets.

In a very real way, the foundation for your organization’s 2020 is going to be laid in the next 100 days. Do it well and 2020 could be your best year yet. Do it poorly or don’t do it at all and 2020 might be just a carbon copy of 2019.

So, what should you be looking at right now? I have a longer list, but if you can’t swing a full-blown strategic planning exercise (which, in my opinion, you should commit to), I’d turn my attention to these four items first –

  • Ask hard talent questions – Do you have the right people in the organization who can take you where you want to go in the next 2-3 years? If not, can you develop existing staff or do you need additional talent? Do you have chronic personnel problems you’ve been reluctant to deal with – people who are poisoning the culture or who are consistently under-performing? If so, what are you going to do about it? Are there one, two or three people, who, if they left, would put your organization at risk? If so, what have you done to mitigate that risk?
  • Gauge organizational health – Is the company culture healthy? For example, is there clear and complete communication up and down the org chart? Is there transparency so that people have the information they need to make good decisions? Are you and are the other leaders in the organization setting a good example in your approach to work and in your interactions with every stakeholder group?
  • Reexamine value creation activities – Do you know the key drivers of the value surplus for your customers? When was the last time you examined your entire value creation chain looking for opportunities to improve vendor performance, inventory management, cross-department collaboration, processes, quality and logistics?
  • Measure what matters – When was the last time you revisited the metrics on your balanced scorecard? Are they really indicative of organizational health? Are your systems providing data quickly enough and to the right people so your field decision-making is data-driven and your longer-term decision-making is data-supported?

Inertia is strong. The pull of ordinary daily days will drag you right into the holiday season before you’ve taken any time to plan for 2020.

I’ve rewritten this last paragraph several times. Originally it said that you’re busy and looking at just these four things is better than doing nothing at all – that’s true. But, I want to encourage you to do the hard thing and take a much deeper dive into your organization. Don’t make 2020 slightly better than 2019. Make it much better by critically and accurately evaluating the current state of your organization, thoughtfully envisioning what you want 2020 to look like and deliberately crafting a plan to get you from the former to the latter.

Flywheel and V-REEL

I recently read Jim Collins newest book, Turning the Flywheel, in which he drills down on the Flywheel concept introduced in Good to Great. For a quick refresher, the flywheel for an organization is a virtuous cycle of actions, each building on the previous, that, when executed consistently and with excellence, build self-sustaining momentum for the organization. To illustrate, I’ve included the flywheel for my company below.

ClearVision Consulting Flywheel

You can see how each action propels the organization into the next. As intensity and depth of effort increase on every rotation, velocity also increases, accelerating the growth of the organization and making it healthier with each turn. As the flywheel turns faster and faster, the weight of the flywheel, which early on seemed to work against you as you struggled to execute each action, now begins to work for you and the flywheel becomes almost unstoppable.

I was introduced to the flywheel several years ago when I first read Good to Great. Like a lot of Jim Collins’ material, it’s an enduring bit of business genius. But when I revisited the topic this time through the new book, I couldn’t help but think of how well it paired with the V-REEL framework from David Flint’s excellent 2018 Book Think Beyond Value.

In Think Beyond Value, Flint introduces the V-REEL framework – a tool that helps business owners and managers think through their organization’s value creation activities using fives lenses –

  • How do you create value?
  • How rare is that value?
  • What factors erode that value?
  • What factors enable that value?
  • How long can the value be sustained?

It didn’t take long to make the connection between the two tools. The flywheel is a virtuous cycle of value creation activities (Flint’s first question). Those activities only remain valuable as they differentiate the organization and make their product or service unique or desirable in the marketplace (Flint’s second question). Stewards of the organization must constantly be vigilant for those factors, both internal and external, that impede or diminish the effectiveness of the flywheel activities (Flint’s third question). At the very same time, they need to infuse those flywheel activities with resources that make them more effective and efficient (Flint’s fourth question). And finally, stewards of the organization must ensure that the flywheel activities continue to build sustained competitive advantage for the organization – that is, they still have meaning in the current competitive environment (Flint’s fifth question).

There are only a handful of business activities that approach “holy grail” status and value creation is one of them. I hope introducing these two tools helps you step back and take a fresh look at your value creation chain. A 500-word post doesn’t come close to doing justice to either of these two books, so I hope I’ve sufficiently whetted your appetite to hit your favorite bookstore (brick and mortar or online) and pick them up. Here they are on Amazon:

Turning the Flywheel

Think Beyond Value