Value-creating growth, in terms of market share or share price, is vital to the long term viability of any organization. The ability to consistently maximize customer value is the greatest challenge of many organizations. Not from an inability to execute; but from an inability to accurately answer a few key questions.
- What do customer’s value?
- What does the organization value?
- How close is each to realizing those values?
The answers to these questions do not come easily to any organization trained to look for problems and then find solutions. This is because the answers are not defined in terms of a problem/solution but in terms of value ambition.
Value ambition is defined as difference between values that are held today and those that are desired in some future state. An organization’s value ambition is established by determining:
- What customers and employees believe are the values currently offered by the organization
- What customers and employees believe the organization should offer in terms of value in the future
- Where are the biggest gaps appear between current and future values
The organization’s value ambition is established from:
- An analysis of the individual value priorities for both customers and employees
- The relative size of the gaps between the current and future individual values
Knowing its value ambition enables an organization to determine:
- The core capabilities needed to deliver the value ambition
- The desired outcomes to measure the success towards achieving the value ambitions
- The few key initiatives for achieving the value ambition
Value-creating growth, in terms of market share or share price, is the result of providing more value to your customers and employees than your competitors. Maintaining a clear value ambition that is communicated to customers and employees aligns all stakeholders with the same value delivery expectations. Stakeholder value alignment is the equivalent of pulling on all oars in the same direction and at the same pace, and is the quickest way to steady value-creating growth.
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