Competitive Value Creation: Simple and Subtle
Creating value is not complicated, yet looking across business sectors, the success rate of converting an initial opportunity into a commercial success is often pretty low.
Most of the time, there can only be one winner in the end, so the fundamental question is how can that be me? Or how can I come close enough to get a place on the podium, which in certain cases is the next best option to be in a sustainable position?
For a long time, these questions were not at the forefront of most established businesses preoccupations, which in some cases were in the comfortable position of being able have their cake and eat it, without being troubled. That has changed.
Competition has been liberated, entry barriers lowered, all being made possible by technology developments, which have accelerated the pace of innovation and change.
So, what are the success ingredients in a world of enhanced possibles and what do successful entrepreneurs do well that enables them to be thrive in today’s environment? The answer is both simple and subtle.
Simple. That is why most of us do it already.
The conversion of an opportunity into a succesful product or service follows a number of recognisable steps (Fig. 1)
The subtlety comes in the content and the definition of the above boxes.
Most of the value is created upfront in the opportunity realisation process, during the steps leading to the definition of a concept or prototype.
Every opportunity has customers and/or end-users: understanding who they are and their drivers is essential. This is where value is identified and defined, not just value for ourselves, but more importantly the meaning of value for them. It means acknowledging that value is not only synonymous with “price tag”, it is also the price tag for the “user experience”, compared to what competitors offer.
Some of the most spectacular success stories of the past decennia find their origin in companies, who have managed to hit the nail on the head, when it comes to getting their customer needs and expectations right.
Getting it wrong is also one of the most common causes of commercial fiascos, one that can easily be addressed and at relatively low cost.
The next critical step is an adequate definition of the scope: understanding the requirements, constraints and risks around the opportunity. This is the first “zoom in” action designed to define the frame around the value puzzle and the pieces fitting in it.
Here too, complacency and a lack of scrutiny during the risk definition, especially for non-technical risks, can have huge consequences further down the opportunity realisation path.
With value, the value drivers well understood and the frame adequately defined, half the value creation process is realised, now remains the competitive part.
Competitiveness boils down to finding the optimal balance between scope-risks and value. Value drivers will lead to the identification of options (technical, economical, commercial, organisational, societal and environmental) and it is their combination through a careful management of cost, design and quality trade-offs, which will lead to a competitive concept or prototype (Fig. 2).
From here onwards, testing the design with the end-user will be key to identifying improvements and get to a competitive product, capable of being a commercial success.
ALL4ONE consulting has designed the ALL4ONE TROPHY, a serious game based on the simulation of the preparation and participation in an offshore sailing race around the world to grow the skills, attitudes and mindset driving competitiveness in complex and dynamic environments, similar to a lot of today’s business contexts.
This one-day session covers the key principles of design thinking, lean start-up and team efficiency. It can be delivered on your premises or offsite, as a standalone training or integrated in a more comprehensive teambuilding programme. It can be delivered in English, French and Dutch.
Interested? Ask for a free demo or get in touch: [email protected]
More info? ALL4ONE consulting website