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Organizations on the Market Focus path define competitive advantage as the ability to profitably deliver Superior Value to target their desired customers. We know that customers typically select between competing options by accepting the proposition that they believe offers them the most Positive Value, whether that is the proposition offering the lowest price, or not, and whether it is the company offering the most benefit, or not.

This deceptively simple principle often elicits itself as ‘lip-service’ from many but, contrasts sharply with the other two paths which are unfortunately, the paths more often traveled.

On the Internally Driven path, managers see competitive advantage in owning assets, or having Functional Excellence, that competitors lack. Thus, decisions are based on functionally-rooted, inside-looking-out criteria that give inadequate attention and focus to understanding or delivering the end-result benefits customers most value.

When the activities of the various departments in the business [R&D, Operations, Manufacturing, Marketing, Sales, etc.] are not integrated around a specific chosen Value Proposition, the departments usually pursue their own objectives and agendas which all-to-often unintentionally undermine the path to superior Value Delivery.

Some organizations, desperately seeking to avoid the myopic path to an Internally Driven organization, instead do anything and everything their customers suggest, following the seductive path of the Customer Compelled organization. Just “stay close to our customer, listen and do what they say,” beckons this panacea. Yet, whilst customers can often make good suggestions, they also suggest courses of action that might be unactionable and/or unprofitable as a result of them not fully understanding the Macro Elements and specific Value Proposition of your organization. Also, the diversity [range] of requests is usually limited by the diversity of clients a business currently serves.

This is the reason why any newly appointed CEO, worth his/her salt, will take 3-6 months to understand current operational procedures, marketing strategies and delivery systems before making any, and usually progressive, changes within the organization.

A Day-in-the-Life Of A Customer – a great way to practice the delivery of end-result benefits is to imagine making two contrasting video recordings of a day-in-the-life of a customer.

The first video recording would capture a typical scenario today for obstetricians trying to monitor a baby’s cardiac condition in the womb. It might show them trying to analyze data, struggling to accurately and quickly enough diagnose a possible problem, then trying to monitor the effects of therapy. What are they trying to accomplish, what obstacles do they encounter and how do they cope with those obstacles?

The second video recording would demonstrate what it would be like if the obstetricians were able to wave a magic wand and improve the monitoring process dramatically [without restriction]. Through much faster access to and better-resolution printing of more accurate and detailed data, perhaps we would see the physicians able to more quickly and more accurately diagnose a cardiac condition and thus provide more effective therapy. Carefully and explicitly articulating these desirable end-results is critical to achieving clarity of direction, within the business and with customers.

Become the Customer – Yet, uncovering and fully understanding these end-result benefits desirable to potential or current customers is not nearly as simple as many people would like it to be. Directly asking customers what they want often does not reveal the end-result benefits they would most value but rather only elicits their description of the attributes, features and Price they think should be offered by our product or service. We find it far more powerful to “become the customer”, that is, to take an anthropological approach of studying intensively how the customer lives, asking: What would it be like to ‘be’ this customer and what would I want, as an end-result scenario, if I were that customer? What does this imply our business ideally should do to improve this customers’ activity and/or job? Could we do that profitably and better than our competitors?

Most organizations can easily identify What [what products and/or services they produce/provide], and How [how they produce/provide their products and/or services], to both their employees and customers. However, clearly communicating Why is one of the most critical, and difficult, elements of managing people, product and/or service risk. This is true whether you’re implementing a new [internal] safety program or a new [external] sales strategy. Change will not will take hold until organizationally, people understand Why it’s required.

Example: a company wants to make some changes in their operation to improve client conversion and retention so, they recruit a ‘change specialist’, with a successful track record for the exact same program and goals, from a larger, more established firm.

The change specialist is thrown in the deep end, as is normal, and told to implement the same program he/she had embedded successfully into their previous employers organization and, to do so with minimal interruption to operations and/or staff members.

Chaos ensues! Why? Well, established, long-term managers become frustrated and leave the organization whilst, those who remain, office staff and field operatives, grow increasingly concerned, even paranoid, as their team leaders abandon ship. What was intended as an ‘improvement plan’, rapidly becomes counter-productive and employee risk management [as a negative], soon occupies the agenda. Also, it’s likely that the ‘star of the show’, the newly appointed change specialist, loses credibility and in turn, their job.

A better way to handle this would have been to communicate the strategy in a more proactive and productive manner, so that all levels of employee can be afforded the opportunity to understand and embrace the necessity for change. The directors and managers must first clearly communicate Why the changes are crucial at all levels within the business and show clear commitment to this agenda, from the top down. The Why, and a commitment thereto, gives employees a greater confidence and an understanding of the end-result benefits to improving customer conversion and/or retention.

Understanding the theory behind Continuous Improvement [Kaizen in Japanese] is the first step towards embedding it into your management culture. To ready yourself for continuous improvement, you need to create a suitable environment within your company.

In Lean management, there’s four (4) components to achieve Continuous Improvement:

Plan-Do-Check-Act [PDCA]

The model Plan-Do-Check-Act is the most popular approach for achieving continuous improvement.

Also known as the Deming circle [named after its founder, the American engineer William Edwards Deming], it is a never-ending cycle that aims to help you constantly improve based on achieved positive results.

It was developed initially for quality control but, over time, became a key instrument for achieving continuous improvement.

In the Planning phase, you need to establish the objectives and processes necessary to deliver results per the expected output [the target or goals]. Setting output expectations is a key to achieving continuous improvement because the accuracy of the goals and their completeness is a major part of the process of improving. It is recommended to start on a small scale so you can test the effects of the approach.

The second phase is to Do. It is straightforward as you need to execute what you’ve laid down during the process’s planning step.

After you’ve completed your objectives, you need to Check what you’ve achieved and compare it to what you, and your customer(s) expected. Gather as much data as possible and consider what you can improve in your process to achieve better results next time.

If the analysis shows that you’ve improved compared to your previous project, the standard is updated, and you need to aim for an even better performance next time. If the analysis shows no improvement or even achieved worse results compared to the past, the standard stays as it was before you started your last project. In this case, we need to Act accordingly to make the necessary changes for the next undertaking of this task, process or job.

Example: without explicitly saying so, Uber expertly highlights everything that sucks about taking a traditional taxi and points out how its service is superior. The simple [yet highly effective] copy above, taken from Uber’s homepage, conveys the simplicity and ease that lies at the heart of what makes it such a tempting service:

• • One tap and a car comes directly to you
  • Your driver knows exactly where to go
  • Payment is completely cashless

Everything about this is in contrast with the typical experience of getting a taxi, no phone calls to disinterested dispatchers, no painful conversations trying to explain to a stressed-out cabbie about where you need to go, and no fumbling for change or worrying you’ve got enough money in your wallet. Just a fast, efficient way to get where you’re going. This is reinforced by the aspirational messaging near the top of Uber’s homepage, stating that “your day belongs to you”.

Vertical Markets are supplementary or complimentary products and/or services, as part of the vendors existing value delivery system/chain, that they can efficiently add to their existing product and/or service mix to offer customers simplicity and a one-stop shopping experience.

Example: an online store specializing in bespoke engagement rings, decides to enter the wedding ring market because their existing customer base will most likely marry after engagement. This could be a logical and cost effective Vertical Market for the online store, as long as they have complimentary labor/skill-sets for both the engagement and wedding ring manufacturing process.

From a customer’s perspective, identifying Vertical Markets will simplify their experience and offers them a business [yours] that specializes in serving holistic needs.