You Need a Substantive Value Proposition to Fight the Big Bear

As we have seen (yet again), greed – the achilles heel of the rational market – works its dark tricks perpetuating the bull into a rising spiral of economic mayhem.  Then, as the big bear spies the precariousness it seizes the opportunity to feed malevolently on scurrilous lechers  who grab hopelessly onto their sinking business carcasses.  So it goes….

Of course, after the mess is cleared the businesses which survive are those who have a truly competitive value proposition.  In my work I come across companies who struggle with their value proposition.  Poor value propositions often survive in the undisciplined  buoyancy of a bull market, but when the pennies are tight, buyers start to scrutinize their suppliers to see where the can cut and save.  To survive this, sellers need to ensure that their buyers are really clear on two things:

1. They know what they are getting for their money  and how they are better off from the purchase.  
2. They can’t make a better purchase from a competitor.

The problem so often encountered by sales and marketing is distinguishing between the widget (be it a service or product) and the value it creates.  The widget in itself has no value.  The value is determined by what the widget allows you to achieve.  Hence, a mobile phone is merely a piece of metal and plastic which hooks up to a telephone signal.  The value attached to the phone is that it allows you to communicate with friends or business contacts, access information from the internet or amuse yourself listening to music or playing games.  The value proposition is about what it adds to your lifestyle or business opportunities. How it makes your life or business better (if thats what you”re into).

Of course value per se is a subjective concept in the eyes of those who have a need or see a purpose.  In order to focus a value proposition, you need to identify the needs of your customers.  What is their perception of  the world  and how could they use your product to improve their circumstances.  Your value proposition isn’t about what you think your product can do for people, it’s about what they think it can do for them.  

A common error is for sellers to define the value of their product from their perspective rather than from the perspective of potential customers.   If you define the value, your placing limitations around your market (common in insurance and banking).  The alternative is to listen to your customers (or potential customers), to understand their needs and aspirations and then how your product/service could help them solve the problem.  If you can solve these questions the market is your oyster.

Get Your Employees Participating to Help Steer the Business Through the Tough Times

Employee participation is a tried and true path to enhancing productivity. All (and I mean all) staff have ideas about their job. OK, so some of them might not be so good but others are good and some might be fantastic. Chances are they will also have ideas about how other staff in the business can contribute more effectively, and probably about how the managers could get on with it.

In my experience, there’s buckets of value in staff ideas. The challenge is getting the constructive ones out in the open. It’s not just a matter of putting a suggestion box on the wall prefaced with a big announcement. You actually have to work hard to get valuable ideas.

Fundamentally, there needs to be a culture which supports participation. People need to know that their ideas are important, and that their ideas MUST be important.

And important contributions must be valued by the company .  When found they must be moulded into concrete outcomes – processes, actions and behaviours which change the way work is done.

Sometimes managers are afraid that encouraging employees to contribute ideas about work will undermine their own status.  These managers are control freaks who want to be seen as the sole responsible driver of their business outcomes.  They put themselves under a lot of pressure to all the decisions without real coal face knowledge.  If your a control freaks are often perceived as arrogant when they really lack perspective and confidence.   And in the end they lose control.  When staff learn that their manager is a control freak they start side-stepping him/her to get the things done vital to their job.   

The best managers in my experience searched their staff for issues and ideas, recognised the good ones and set about moulding them into concrete action.  They quizzed and prodded staff with problems, what ifs and vital outcomes.  Sometimes things would get pungent as staff argued the pros and cons of every detail.  The great manager kept them on track, sometimes road blocked stupidity and enforced rigorous goal directed thought.  In the end they always gave credit to the staff who divined and nurtured the idea.  Idea ownership was a secondary issue for them.  Their ego and survival depended on outcomes.

Most importantly, the staff loved making a contribution – it gave them purpose, made them feel valued – that they belonged.

So if the your business is finding tough, reach in and share it with everyone.  Get them to take responsibility for coming up with the solutions and coach their participation to success.