You can Create Only Limited Value for Yourself

More value is created by others for you than what you can create for yourself. Many people are of the view that they can create value for themselves without creating value for others. Take a student. He (or she) can only create that much value for himself by learning from books. He learns more by creating value for others, interacting with others, learning from others, and receiving the value they create for him, which is greater than what he can create for himself alone.

Take two singers. One is excellent, the other not as good as the other. But she is picked up by audiences or by a talent scout and more value is created for her (than for the first one) and she becomes a well known singer. The difference for the two is the value created by others for the second singer. Others make you more valuable!

Another example is that of Ray Kordupleski, the father of Customer Value Management with a customer based market research program to figure the value the client company creates for his customers versus the value the competition creates for its customers. This is called Customer Value added and is used both for B to B and B to C. Examples of B2B include Castrol Industrial Lubs, Godrej, Tata Chemicals, Tata Power, GE Capital, various banks, telecom companies, power companies like Wisconsin Energies, 3M etc. and many B2C companies like Coke, telecom companies, insurance companies, banks etc. The technique is equally applicable to both.

Customer Value Added = The Value you Add to your Customers
                               The Value your competition adds to its Customers

The point I want to make when researchers talk about customer value, the closest they come to is Bradley Gale, who was better known than Ray. Researchers talk about many people, including Gale, Kumar, Sheth, Gronroos and others, but there is no mention of Kordupleski.

Yes, he did create value and the Customer Value work is outstanding. But it was not picked up by others who spoke about him and exalted him. So limited value was created for him by others. Had others talked about him, promoted him, they would have created much more value for him. His value remained mostly hidden and limited to what he created for himself. Thus you do not hear about him much.
This is true of the Creating Value movement where leaders are not promoted or talked about by others. So the value the leaders can create is limited.

All this is true at work. If you, the employee create value but are not recognised or supported or promoted, little value is created for you. Yourvalue is undervalued.

There are many selfish people who care about themselves and their needs. They do things that suit them, whether travel or shopping or eating. They do not care if others with them are enjoying this or the effect of the time they spend on themselves (in the thought this will create value for themselves) will have on others. They are destroying some value for others while creating limited value for themselves. In the end, they lose out because the great amount of value others could create for them becomes limited. The respect and love and esteem they get is limited. The I don’t care attitude except for myself creates less value.

Giving is the greatest gift one has, and giving with no notion of getting something in return eventually creates the most value for you. Taking creates less value.

You can see this in

Value Takers Vs Value Makers

There are many looking for instant gratification. Shor termism is a form of instant gratification, which is for here and now. You create value but it is not long lasting and solid. To create value for yourself you have to think of others and your stakeholders and create value for them.

Ernst and Young says long-term value is created by focusing on a broad set of stakeholders, with a distinct purpose in mind, to sustain a business for the long term.

More and more studies show creating value for others is what creates long term value. Rather than just thinking of yourself think of others. They will come back and create value for you.

Best,

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation can Kill

The 6th Global Conference on Creating Value
Join the Creating Value Alliance at creatingvalue.co

Work And Value Creation

A job well done always creates value for you

What is Value Creation

In its broadest sense, Value is doing good for or improving the wellbeing or worth of someone or something. Through work you improve your own wellbeing and that of others, and you thus create value for yourself and others

What is Work

Work has evolved and has remained an essential need for human beings. Indeed, work is necessary for survival of people, both for mental needs and for physical and material things. Mental needs include: to give challenges, to avoid boredom etc. Material things include those for sustaining physical life.

RI.gov says “Work gives individuals a sense of purpose and self-worth. For many, it defines who we are and is a source of justifiable pride. Work helps improve individual and family finances, and it helps us connect socially.”

Cparc.org says “Work is an important part of people’s lives. It means more than just getting paid. It means being able to make your own choices about how you want to live your life. At work, it’s what people can do that matters.”

Mark Ragland says

1.  Work Teaches Responsibility

2.  Work Connects People

3.  Work Produces Endurance

4.  Work Increases Self-Esteem

5.  Work Gives You Money!

6.  Work Offers Daily Impact

7.  Work Challenges Comfort Zones

8.  Work is NOT About You

9.  Work Improves Society

10.  Work Allows Independence

Ragland quotes his sister who said, “The world isn’t a scary place for me, I know how to work, budget, and interact with people”.

Work gives joy to some people. They just enjoy their work. For others work is priority number 1. They seem to have a work ethic. Indeed.com says “Work ethic is a trait that most employers look for right away in an employee. Your ability to work hard, overcome challenges and offer support to your colleagues demonstrates a strong work ethic and can help you be successful while building positive relationships.”

Sometimes work can be a drag…studying for an exam or giving one, doing routine work, doing work one does not enjoy are examples.

Work can be necessary or relevant. The most useful is necessary and relevant work. The most useless is unnecessary and irrelevant work, and very often we practice it, and companies do so unknowingly. In between is necessary and irrelevant work or unnecessary and relevant work. See my paper at the end of this one called Redesign work to Create Value, where I say work is value

Work is co-created and is two-way: The worker and the company are truly an example of two-way value creation, really what we would call co-creation

Workers and companies: The company provides an environment and an opportunity to work, for feeling useful, for fulfilment, for knowledge and experience gain, for growth, and hopefully improving wellbeing, for making money, and earning a living.

The employee gives back his knowledge, experience, his application to problem solving and innovation, for growth and wellbeing of the company. The employee gives dedication for about 8 hours plus or minus a day.

As employee creates value for the company, he creates value for himself. In return, the company creates value for employees, and it can retain substantial value (both economic and non-economic, for example building a reputation, or a knowledge base).

There is a contractual relationship between a company and work. If reduced to only this, there may be a brake on value creation.

Is work locational: Work is everywhere, at work (locational), or at home, or in society. Today the concept of remote work which can lead to a culture of geographical diversity and inclusivity.

Work life balance: Much is said about this, but this balance is in the minds of the worker, and those that expect a balance or part of the workers time away from work. One can ask if vacations are work, or watching TV work?

Feeling useless without work

As you grow older or are retired, sometimes you crave work just to keep you busy, motivated and occupied. Work gave you companionship, maybe a sense of camaraderie, and prevents boredom. Work made you feel useful.

Often in the absence of work, one starts to feel useless and craves work. This is a danger for people forced out of their jobs or during retirement.

Is work for payment or for creating value?

It is for both, depending on the situation. Sometimes it is for pure joy, sometimes it is for dissemination of knowledge (like for a teacher) or assimilation of knowledge, or doing something for someone or a company.

The company creates value for the employee (let us say A), and has a perception of the value it creates (A). The employee receives this value and perceives it differently (let’s say as B). At the same time the employee creates value for the company which he perceives as C. The company receives this value and perceives it as D.

The net value the company produces is A-D. The net value the company receives is D-A

The net value the employee receives less what he gives is B-C. The value he creates for the company is C-B

If company receives more value from the employee, then employee is profitable and valuable. This is in a sense the profit or value the employee makes for the company.

The evolution has been such that work is important. We need to look at the future to see how we can change all this. Alejandro Fontana in his article Professional Work and Value Creation https://www.exaudi.org/professional-work-and-value-creation/ suggests there will be human extinction without work. I am not that pessimistic, unless there is a takeover by aliens or by robots/AI. He also suggests work of one person influences and helps the existence of others. A power plant worker or a farmer helps others to exist gainfully. He suggests “There is a close correspondence between the conditions of nature and this capacity of man to work. If nature were chaotic, the ability to reason, to understand reality and to generate man’s tools would have no meaning.”

I wonder what will happen when jobs are taken over by robots, then the available time has to be used gainfully (as traditional work is lost) and such time will have to be spent for entertainment or new type of work. This is something older people start to see as they retire or become incapable of physical labour or time-consuming jobs and that is how to fill up their life meaningfully.

Alejandro Fontana says the greatest value of a job well done always remains within you; and sooner or later, it will also be recognized economically. When you work well, the value generated is very high. Part of that value is delivered to the consumer, but a large part – the majority – remains with oneself.

Read this article with my 2019 article below:

Redesign work to Create Value

Work is value!

By Gautam Mahajan in 2019

You don’t get paid for the hour. You get paid for the value you bring to the hour.

Jim Rohn

Value, Not Work should be our motto.

In its article, ‘In pursuit of value—not work,’ McKinsey asked, how valuable is your work. They later defined value as being commercial market value. They state work creates market value.

Unfortunately, the article misses what value is all about, how true value is very important, not just market value. They lose track of the definition of work. True value increases market value.

Work cannot be measured as output alone. it is more than that. It has to be measured as the impact and the real value which is benefits the receiver sees versus the costs (which includes price and non-price). The benefits the receiver sees is not just monetary.

You may design work to educate your employees. Then the immediate cash inflow from this training is nil and there is a net outflow and so by McKinsey’s definition it is not valuable work.

What if you do things a particular way and down the line you realise it is the wrong way of doing things and you have to redesign your effort. According to the definition of Mckinsey it is useless or wasted value. What you learnt might have given you superior knowledge and a leg up over competition, but that has no value according to the article. It may, on the contrary be extremely valuable.

Or if you set out to deliberately mislead competition by doing work that may make them follow your lead, or may make them think you are not a competitor. I worked for a company developing acrylonitrile beverage bottles (the only company in the business was Monsanto). Our company started work on PET secretly but publicly remained in acrylonitrile work. This caused others to take acrylonitrile seriously, an approach we were abandoning.

We define creating value as:

Creating Value is executing normal, conscious, inspired, and even imaginative actions that increase the overall good and well-being, and the worth of and for ideas, goods, services, people or institutions including society, and all stakeholders (like employees, customers, partners, shareholders and society), and value waiting to happen.

So according to this definition, we increased the overall good for our company and therefore created value.

Of course, each company must rethink work, abandoning routine tasks to machines and re utilising people for greater value creating work. Much has to do with creating more value for customers, employees and other stakeholders. This implies we look at hitherto supposed cost centres such as sustainability and convert them to create value for the company and therefore profit centres. Remember, it is creating value we are after not just monetary profit. This implies doing necessary and relevant work on sustainability that our customers and stakeholders such as governments can relate to and give us brownie points or create value for us instead.

Here is a definition of such work:

Necessary work is essential for, vital to, indispensable to, important to, crucial to, needed by, compulsory required by or requisite for the Customer or stakeholder

Relevant work is pertinent to, applicable or germane to, or appropriate to the Customer or stakeholder. This is work that can be eliminated without material deterioration of present service or product

What work is the Customer/stakeholder willing to pay for or considers creates value for him/her? That would be termed as Necessary and Relevant.

The mindset of workers and executives must go beyond just performing their jobs to consciously creating value. This is one valuable way of improving work.

Mckinsey in an article “Defining the skills citizens will need in the future world of work” has said, and I quote:

•          add value beyond what can be done by automated systems and intelligent machines

•          operate in a digital environment

•          continually adapt to new ways of working and new occupations

While I agree these are necessary, I feel Mckinsey has defined the skills too narrowly in terms of the future of work and life. First and foremost, the skill needed is not just adding value, but creating value to be able to manage and address the future of ourselves, our lives, our way of life (or what is left of it in the changing environment) our work, to think of rewards and risks of AI.

• We need to teach executives and workers the meaning of value and how they can add value to their work, their workplace and themselves
• Workers and executives must create value consciously, and understand that performance is not enough

Leaders must

• ensure values and human values are incorporated; establish controls and checks for human intervention and override and supervision
• Make their executives understand that value is created not only by their direct tasks, but by their ideas, their thought process to create value in seemingly unconnected subjects like the environment or thinking about the product complaints and reaching zero complaints. Create value and ensure that the environment is managed and designed for the betterment of life, and not just for efficiency and for giving up our control because AI can do it better
• Be continually adaptive to create continuing value
• Become multi-disciplinary and multi-aware

These might sound trite, but the lure of technology is to do more with less, and that seems to be what technologists endeavour becoming eventually the human thought process is lost. We cannot allow this.

Ejaz Ghani thinking of India is 2030 says there will be a rise of the middle class and there will be a demographic dividend; India will be part of the global talent race; an urban awakening; India will be close to the largest digital economy; with a changing face of globalisation. There will be green growth and gender will be a growth driver. The problem is managing the transition.

So, we need to re-skill and re-teach to manage the future and do so by creating value. Digital democratisation will make people more equal You must have the right mindset. Creating value is a mindset that can set you ahead and design smartly. Cross disciplinary thinking becomes imperative. Now you are on the path to create valuable work, and to think work is value, and make work valuable.

Best,

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation can Kill

The 6th Global Conference on Creating Value
Join the Creating Value Alliance at creatingvalue.co

Value of the Useless

When I hear about “Usefulness of Useless Knowledge” by Abraham Flexner or John Lennon’s quote: ‘Reality leaves a lot to imagination’, I start to wonder on what I think is useless. Is it real or just a figment of my thinking.

What is useless is in the minds of people? Perhaps it is not relevant to them, or they cannot understand the possible significance of the thing or service or research or book or airline. Something like religion and spirituality may mean a lot to someone (useful) and useless to others.

I know people studying dying languages, others art 2000 years ago, others reviewing facets of a dead civilisation, or the morals of people a few hundred years ago. Some I find useful, others I do not understand. We often study what we might think is useless, like algebra, or a required reading literary book for engineering students.

Most people think that pursuit of the useless (in their view), of the meaningless is like trivial pursuit. It may get you brownie points for ‘knowledge’ but may otherwise be of little value.

The trick is to conduct seemingly useless activities and ideas in to useful ones or in useful ways. We also should understand that what we find useless could be useful to others, and many useful ideas emanate from seemingly useless research or work. We learn as kids to make telephones using two cans attached by a taut string. Useless or useful? Can it lead to somewhat useful ideas?

Like Newton and the falling apple. Certainly useless, as apples do fall. But he converted this into something useful and meaningful by thinking about it, and discussing gravity. Gravity that always existed but was never noticed or enunciated by others.

Or the driverless car, for at least a century (and the driverless horse cart before that) was a useless, science fiction thought. Someone took it seriously, and put together many useless and useful ideas and inventions and thoughts, and converted it into a useful and doable, practical driverless car. Today we do not think of this idea as useless, just as driverless flight vehicles and drones which were considered science fiction 50 years ago.

There are two (perhaps more) aspects to uselessness, apart from human categorisation of useful and useless. (I am not going to dwell on spirituality and its use, or if money is really useless to some and so on, but to see how useless can become useful. This is what I call value waiting to happen.)

One is becoming aware of what is around us. Let us look more seriously at things we take for granted and have little use for us. So, if we learn that dolphins can go faster in water than their predicted energy level should have us believe possible, we can find what is called slippery water, or some chemicals they give off, making the water more slippery and reducing the drag or friction on their bodies. Can we make use of this? Many years ago, slippery water chemicals were put into water to run through fire hoses to increase the throughput.

The second aspect is to see if we can make something useful from this thinking. I gave an example above. This is based on awareness and curiosity. Such examples abound and if we do not write them off as useless can lead to useful thinking. Why are flowers coloured? Or how does nutrition go from the roots to a leaf a hundred feet above. Where is the pump? Or is there a different type of pumping device. How can we use this knowledge to make it even more useful? Disentangling the riddles of the universe can lead to many useful ideas of value.

We see many seemingly useless and theoretical thinking that all coalesce together as an invention. The driverless car is an amalgam of many unrelated ideas, inventions, thinking and action.

Many times, we consider mistakes or research that do not bear fruit as useless. We learn from mistakes and so they are useful if we are open to learning.

Relevance makes things useful. But being irrelevant does not make things useless. A party voted out of power may become irrelevant when compared to the Government but is still very useful. We can say the same about other reasons for making things useful or useless, such as authenticity, reliable or unreliable, trustworthy etc.

People we consider as giants in their spheres are standing or stood on the shoulders of many so-called useless people, with what we consider useless ideas, or theoretical thinking. Like the combination of theoretical (useless to many) work by Hertz and Maxwell helped Marconi invent the ‘useful’ radio!

Spiritual, religious, free thinking, freewheeling, free intellectuality are all essential and should not be branded as useless. Abstract paintings and poems we cannot understand are not necessarily useless. Our thinking is useless unless we can comprehend that useless can lead to opportunities and opportunistic thinking to create value. Flexner while discussing Princeton’s Institute of Advanced studies, mentions giants who worked there, not the more useless dwarfs! A common mistake in considering what is useless… meaningless, not without purpose and so on. Let us enable uselessness, that is a way of thinking distinct from usefulness. Thus, saying this website has a lot of useful information is akin to saying it has a lot of useless information. Or useless usefulness or useful uselessness!

Hazlitt in ‘On the Ignorance of the Learned’ states that knowledge in essence must be useful, and comes from experience. Hazlitt persuasively makes the claim that formal education breeds ignorance and animosity. He thinks that book learning cannot replace experience. So again, a useful or useless argument. His example is the learned scholar of China, who can’t find his way to the closest grocery shop

Reality is made up of many useless thoughts and ideas. Especially with fake news, and fake fake news. Are these useless when compared to the truth. Truth is not always reality as historians will tell you.

So many of my friends comment about an airline, or a car, or a hotel, or whatever and say these are useless. If useless how come they keep flying or being in business. Others may find them useful or valuable…do not pass useless judgment on possibly useful items, persons or services. You do not have enough knowledge or data to do so, except your personal experience. Do not use your experience to disgrace someone.

Let me give you an example from Steve Jobs life outlined in the famous Stanford commencement speech that I witnessed live as my son, Karan was graduating. First, he talked about dropping out, and taking seemingly useless courses such as calligraphy. This, he said helped make the fonts in laptops outstanding. Was he calling a formal education useless? And his message, Be hungry, be foolish almost invites you to do the useless! Therefore, do not dismiss everything and every one as useless. They have value waiting to happen that we are not seeing, but value is there waiting for us to convert our thinking from useless to useful. Let us not write these useless things as a waste of time or effort. Let us look or help others look and derive value from their ‘useless’ learning. Let us look for the value of our useless learning that we have not used for years, but has helped us be more thoughtful, more analytical, more active, more useful and Valuable!

COMMENTS

Cyrus Bagwadia	09:32 (43 minutes ago)
to mahajan.g@customervaluefoundation.com

Its thought provoking.  As a proverb goes- everything has two sides. Positive and negative. 

Get Outlook for iOS

Rajesh Malhotra	09:27 (54 minutes ago)
to mahajan.g

Gautam, nothing and nobody can be discarded as of no value: the seeds of greatness lie there, just waiting to be sown! 

Warm regards,

Deepa and Rajesh 

Konagaya Akihiko <konagaya@molecular-robot.com>	06:34 (3 hours ago)
to mahajan.g, konagaya

Dear Gautam-san

Thank you for your e-mail about new concept for value.

“Value of Useless” is very important concept, I think.
In Japan, there is a well know proverb “The Usefulness of the Useless” originated by a Chinese philosopher Lao Tsu.

Chapter 11

That which is empty is used to create functionality

Tao Te Ching Online Translation

One may get a profit by pursuing efficiency by eliminating “useless things” for their current business, but might lose everything in future because of the lack of technology and products necessary for new coming ages.

In some sense,  R&D is “useless” for the current business but essential for the future business. The cost for R&D is insurance of future business.

Another example is a culture. If people purse knowledge and skill necessary just for job hunting without studying history, geometry, languages, literature, arts, philosophy and basic science, they may lose their own cultures in future.

Best Regards,

-Akihiko

Dave Ulrich	Sat, 13 Jan, 21:05 (13 hours ago)
to mahajan.g@customervaluefoundation.com

Great essay, thanks.  Knowledge is everywhere.

Joseph Yacura	Sat, 13 Jan, 21:01 (13 hours ago)
to mahajan.g

Gautam,

Good article! Thank you.

Joe

Varuna	10:10 (29 minutes ago)
to mahajan.g

As a Buddhist who has been taught about the interconnectedness of all beings and things , the word useless does not arise except sometimes in thoughts , that also we observe and let go . 

Useful and useless are as relative as good or bad. 

Good article . 

Regards 

Varuna 

Fwd: Value of the Useless Interesting article. In India what is useless to someone could be of immense importance’s point made is regarding Chandigarh city construction waste is the basis of input in the creation of the famous Rock Garden by Nek Chand Saini .waste

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Devinder Banwet	Sat, 13 Jan, 20:30 (14 hours ago)
to me

Prof. ( Dr.) Devinder Kumar Banwet , FIE.
Vice Chancellor ( Founding )

Mkp	Sat, 13 Jan, 20:27 (14 hours ago)
to mahajan.g, chairman.cdc

Very thoughtful !

Mridul Pathak

Work	Sat, 13 Jan, 20:16 (14 hours ago)
to mahajan.g

Gautam

Happy new year

Great article. It echo’s the Eddison knowing how not to invent the light bulb after 1999 attempts. The term “useless”, is a great source of reflection.

A scandal that is currently big news in the UK, is that of 900 post office owners being bankrupted by the UK government in their use of a faulty computer system.

(en.m.wikipedia.org/wiki/British_Post_Office_scandal) I think it will prove a huge source of value management lessons in the future.

It’s lasted 25 years and has just accelerated into the public realm through it being broadcast as a TV drama. ( “Mr bates v the post office) It’s now accepted as the greatest travesty of justice in British legal history.

Uniquely our parliament is having to pass a law to exonerate the post office. Managers. Many of whom were Indian.

Well worth a look.

Kind regards

Gary Mogan

You are welcome Gautam.

In the post office case, the “post masters” were entirely innocent, yet there is a presumption in law that computers never go wrong.

So when 900 post offices start showing losses, the civil servants made them liable, as per their contract. This bankrupted them, leading to lost businesses, homes, relationships, mental health issues, jail and in 4 cases suicide!

This began in 1998, and is still not fully resolved, despite the government passing a legislation in parliament to say they are all innocent and should be repaid. With the court cases and numbers involved it’s cost over £billion. The government is calling on Fujitsu to pay for the compensation.

The computer manufacturer Fujitsu, never publicly accepted a problem with their program, and forced all of their staff to sign non-disclosure contracts.

When in fact they built in a remote access to the accounting system as they knew it was wrong and tried to fix without telling their clients. The result being it’s been covered up by them and civil servants for 25 years.

Thus, this can be a good opportunity to discuss the “value of certainty”.

At some point in any value chain, the individual tasks required to make value  happen have to be tested.

Where they are, and “useless” is identified, then that means certainty is eliminated and a new value agenda is created to determine the causes.

Only this is far harder to progress as the “Ass” of assumption is making fools of the entire value chain.

In this example the Japanese computer manufacturer have been making faulty computers for 25 years and not known it. So they have never had a business case to fix any of its problems.

Releasing the questions of  what else have they missed! Shall I post this on your blog?

Kind regards.

Gary

dilip coelho <dscoelho@yahoo.com>	Sat, 13 Jan, 19:41 (15 hours ago)
to mahajan.g

Dear Gautam

May I congratulate you on your series relating to Customer Value and the many people you have enrolled in supporting a very important part of corporate functionality.

In fact the value of the useless is something that your listeners will love, in my humble opinion. Do persevere with it and keep me in the loop.

Warmest regards 

Dilip

avadhanam ramesh <a.ramesh@vjim.edu.in>	Sat, 13 Jan, 19:40 (15 hours ago)
to mahajan.g@customervaluefoundation.com

Excellent article. Thanks for the share.

Ravi Chaudhry	11:30 (15 minutes ago)
to mahajan.g

Dear Gautam

Many thanks for sharing your beautiful piece.

Loved it.

My warm greetings for a very happy and personally enriching New Year!

May the year ahead be full of all that is dear to you and matters to you – good health, family happiness, and peace within and all around!

Greetings and Gratitude

Ravi

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation can Kill

The 6th Global Conference on Creating Value
Join the Creating Value Alliance at creatingvalue.co

Seek Value in Failure

Failure is not all bad. It can create knowledge from learning from it: what not to do, what to avoid, how to use the learning to move forward to the next step.

Failure can be bad, especially if it is avoidable and obvious. How can you learn and create value from this. Ask how this was avoidable, weed out bad people and processes, the decision making and actions so that such failure can be avoided in the future. Teach new generations of leaders this. Use failure as a learning tool and for improvement for creating a road to excellence and value.

Moreover, there are value creation teachings, such as companies saying this product is easy to use and understand, and then we find the user or the buyer has a problem with it. This is a failure that is fixable. Likewise, take the example of my going to a VW store to arrange for a test drive of a Taigun. Why did I go to the store? There was no telephone number for the store. The VW website for showrooms did not have it (a new store). I asked the salesman for a telephone number. He said I will send it to you with information via WhatsApp. No message came. These are all examples of failures that are avoidable, that companies can learn from and instead of destroying value can start to create value.

More than that there are failures in service and in keeping promises.

In her book “Right Kind of Wrong,” Dr. Edmondson provides the framework to think, discuss, and practice failure wisely. Outlining the three archetypes of failure – basic, complex, and intelligent – she describes how to minimize unproductive failure while maximizing what we gain from missteps at all levels.

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation can Kill

The 6th Global Conference on Creating Value
Join the Creating Value Alliance at creatingvalue.co

Value and Mind-Set

This article focuses on:

1. Mind-set and leaders, possible versus constraint led
2. Value waiting to happen
3. Mind-set and well being
4. Value and mind-set

1. Mind-set and leaders

The great significance of value and value creation is that it is focuses on changing the mind-set. Unlike most leadership aspects that are focused on processes, functions and tasks to be done, Value Creation focuses on impacting the mind-set to be positive and to imbibe a value creation thinking. How can I create value in this situation? For whom? And how? And will it destroy value for whom?

Take an example of bringing in a new boss in an existing department. The leaders feeling is that this person will create value for the department, the company and the people. On the other hand, his coming could destroy value for those aspiring for the same job. How does the leader ensure that the value destruction is minimised?

We talk of the 8A’s of creating value:

Mahajan’s 8As for executives holds for leaders and their mind-set also:

Awareness: Leaders must be aware of things around them, they must be curious, they must want to know more

Attitude and Authenticity: They must have a super attitude, positive, forward thinking and multi-dimensional. Able to be strategic and innovative to being practical. Some people are functional in nature. Mind-set plays a major role.

Ability: Much of this is innate, but some comes from learning and experience. A great mind-set helps here

Agility: This comes from a mind-set and mental make-up

Adaptability: Being able to change with circumstances

Anticipation: Being able to be ahead of others by forward thinking and view. Part of this comes from a 6th sense which is developed in your mind

Ambidextrousness: Capability of doing more than one thing at a time; capacity to think of different things

Action: Convert thought into action

In today’s world we require a can-do and positive attitude. Too many managers hide behind constraints: we do not have time or people or finances.

I always used to tell leaders in thinking of strategy or innovation, forget constraints. Concentrate on the possibilities and the best strategy and/or innovation. Then start looking at constraints, and see how to overcome them.

When you do this, you will have a positive, optimistic mind-set. Such leaders are inspirational and inspire others to be creative.

If you do not follow this technique, you will throw out the best ideas by saying they are too expensive, will take too long or cannot be done.

You use the constraints to work on the real issues that prevent the strategy or innovation from happening.

In today’s world we require a can-do and positive attitude. Too many managers hide behind constraints: we do not have time or people or finances.

Read more at: https://www.hrkatha.com/features/possibilities-mindset-vs-constraints-mindset-a-mindset-shift-for-success/

Then start looking at constraints, and see how to overcome them. Ask, how do I make this happen, how do I make this successful? Later we will talk about value waiting to happen, which is also part of the mind-set leaders must have.

A person’s mind-set impacts their personal growth and how they become indispensable to organisations.

2. Value waiting to happen

The other mind-set that the leaders develop is awareness (the first of the 8A’s) and curiosity. They start to focus on Value waiting to happen, and look for ideas around them.

I give an example attached. It is something I picked from the internet and cannot find the source C:\Users\Gautam Mahajan\Documents\CV Foundation\articles\Value waiting to happen.mp4

You can see by noticing everyday events we can create value waiting to happen.

This then leads me to the definition of value we use:

Creating Value is executing normal, conscious, inspired mindset and actions that increase the overall good and well-being, and the worth of and for ideas, goods, services, people or institutions including society, and all stakeholders (like employees, customers, partners, shareholders, environment and society), and value waiting to happen.

3. Mindset and well being

Wellbeing mindset is joy, compassion and acceptance, gratitude, kindness as stated by Michael Stanwyck.

Wellbeing comes from understanding fundamentals. Fundamentals that impact your health, your mindset, your value creation ability and following them, not ignoring the known facts and fundamentals of management and technology. It includes your belief in values, peace and harmony, the impact you have on people, peace and prosperity. Think of the earth and the planet and sustainability.

What mindset is required to improve value and wellbeing? Most of what we said earlier, be positive, be curious and aware, and follow 8A’s awareness, attitude and authenticity, ability or aptitude and its improvement, anticipation, agility, adaptability, ambidextrousness, and action

Stanwyck says, “Mindsets frame our thinking, which in turn determine our feelings, beliefs, decisions and actions.” Jurgen Nagler in https://www.kosmosjournal.org/kj_article/wellbeing-mindset/ suggests our behaviour is impacted and how we feel. How do we care for society, our planet, our values, are influenced.

If we wish to change our life, we have to start with mindset changes, or else we can never change

He continues:

That to change we have to change our mindset, from blaming others to taking self-responsibility, from imposing quick fixes to co-creating solutions, from quantitative to qualitative growth, from GDP obsession to wellbeing of people and planet; from materialism to holism.

What is Wellbeing?

In simple terms, wellbeing is defined as “the state of feeling healthy and happy,” physically, intellectually, emotionally, financially, socially, spiritually, and work wise.

You can see that creating value MUST improve well-being, and is the mindset to improve wellbeing. Wellbeing applies to us, our families, our societies, our businesses and institutions, the environment, climate and planet.

This is the power of mindset, and why value is so important in changing mindset

Jurgen continues

Mindfulness: Take on a mindfulness practice.
Awareness: Expand your awareness with inner work & raise awareness about key issues.
Non-judging: Be compassionate and non-judging of yourself and others.
Think Positive: Be, think and act positively, as energy follows attention.
Real you: Be the real you by showing your true colours.
Aliveness: Enjoy and celebrate being alive by honouring life in all forms.

4. Value and mind-set

Creating Value is executing normal, conscious, inspired mindset, and even imaginative actions that increase the overall good and well-being, and the worth of and for ideas, goods, services, people or institutions including society, and all stakeholders (like employees, customers, partners, shareholders, environment and society), and value waiting to happen.

We have spoken about value waiting to happen earlier.

Value creation is all about mindset management and improving wellbeing. So do embark on value creation because it is different from what is taught to leaders, to be good functionally and to cultivate certain traits and values.

If you look at successful sportspersons, they have special mindsets, that allow them to become winners. We all recognise these, but do not imbibe the positive, winning mindset in leaders. This is what value creation wants to change:
Bring about a way of thinking and managing that goes beyond day-to-day routine management into value creation and balancing this with value destruction.

Best,

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation can Kill

The 6th Global Conference on Creating Value
Join the Creating Value Alliance at creatingvalue.co

Creating Value Requires a Balance with Value Destruction

We keep hearing about value creation and how it is good. We hear about the balance of power. It means more power here and less there, but how are they balanced by other factors. There is balance of convenience, balance of payment, balance of trade, and checks and balance!

We do not hear much about the balance of poverty (it all seems one-sided), the balance of love, or the balance of music, the balance of education.

If it is economic, like the balance of payment, it is easy to understand. Balance of power or convenience is more complex, and so more difficult to understand, though conceptually we have an idea what it means.

Balance of value is even more complex, it has to balance value creation and value destruction.

Diki from Karma gave me an example of birds being destroyed in China and resulting in insect and pest problems. The birds used to eat many of these, and of course eat some of the produce also. They were considered value destroying. However, their impact was value creating of eating pests but was not noticed. Wiki talks about the 4 Pest campaign started by the Mao Government around 1958, to eliminate:

the mosquitos responsible for malaria

the rodents that spread the plague

the pervasive airborne flies

the sparrows—specifically the Eurasian tree sparrow—which ate grain, seed, and fruit.

In 1960, they realised that even though sparrows ate about a kg of grain a year, the extermination of sparrows had upset the ecological balance, which subsequently resulted in surging locust and insect populations that destroyed crops, there was a lack of a natural predator and therefore led to famine. The Chinese later changed their policy on sparrows.

Think how often we punish someone, to improve performance without thinking of the consequences. Value Creation, for example, in driverless cars are many. For example, you get a car when needed without having many cars just standing as they do today. You do not need to worry about parking etc. But it destroys value for paid drivers, and other value destroying consequences such as reduction of accident repair centres.

The value creation for Ukrainians maybe freedom from Russia, but has come with huge value destruction, which may continue even after peace comes, because of fear of Russia in the future.

In business, I had written earlier in an article called: Transforming companies through Value Creation Not Value Destruction: The Balancing Act.

Understandably, no one will want to change unless he sees a value in the change. And the Value has to be tangible and worthwhile.

Value Creation is obviously a good idea for companies. Sometimes, evangelists like me forget that for most people the current situation is comfortable (they derive value from comfort). Many have bosses or Boards or company owners that demand profitability albeit short term. And if they do not deliver, they run the risk of being fired (a value destruction situation for them). So, there are many reasons for following the road well-travelled. My friend Jim Carras said to me:

“You seem to make a big point of stakeholder value not being a good objective for companies and I fully understand your concept. I believe you will need to accentuate the positive and not be too strong in changing what others believe to be important. I know it has a shock value for people to hear that shareholders should not be the vision but rather customers. It makes for good press. My first boss was Phil Crosby (ITT) and I can still hear him today preaching about customer satisfaction. You should take caution in how you sell the idea.”

Talk about putting me in my place, Jim! But Jim is absolutely right, and if companies do even bits and pieces of value creation like some innovation, like some social work, like some customer value creation. They will be ahead of the game. The CEO has a balancing act on being accepted by the customers and by the investors!

So, maybe we should start with what not to do. Avoid destroying Value. Keep looking over your shoulder and keep ahead of competition. Avoid becoming complacent, and continue to add value to your employees, customers and partners.

It is easy to be destroying value even when you are creating profits. You can be running your company into the ground, by not renewing assets. For example, the 16 oz. Plastishield glass bottle, selling 10 billion units for soft drinks and suddenly disappeared in the late 1980’s because new assets were not deployed.

You could like Enron destroy value for millions of shareholders. You could be like Blockbusters and Borders (my favourite bookstore), like Blackberry, letting go. Ambassador and Fiat India, RCA, Paine Webber, Drexel Burnham Lambert Beatrice foods, General Foods, Eastern Airlines, TWA and my old favourite Pan Am, Burger Chef, Compaq, Arthur Andersen, Standard Oil, American Motors etc. are examples that were successful but eventually died. Complacency, irrelevance, not reading the signs, destroying value to some stakeholders.

And don’t ignore countries that ruled the world or tried to, the British Empire, the French territories, the German war losses, Japan’s downhill ride. Ask what caused this?

So, what do we learn? Nothing is forever; you can’t take the future for granted.

Failure and success do not happen overnight. More often we fail to see the signs of failure. Balance thinking is needed.

Failure does not mean extinction; you can bounce back by adding value.

Never ignore anything that is negative, like customer complaints or a poor response to a product.

Add Customer Value, first by measuring it an understanding why customers but and by adding value. Karl Slym, President of Tata Motors got 357 ideas just by talking to TCS employees, many of whom were his customers. So, innovation is what you must do and it adds value. And talking of TCS, they were named among the most innovative companies, the most green company, the best CEO of the year, best mobile learning program etc…all indicators of value creation.

On the other hand, Stock Guru wrote:

-In the name of Power (a power company) one man made a sucker of the entire Indian population. A case study for future generations. Collected record amount of money from the public & the stock has become worthless. Marketing professionals & a greedy promoter made a sucker of the entire investor community. Destroyed Value!

Today the rules are changing, the customer economy is taking over and so should you.

So, what do we do? Gregg Gordon in The CEO’s Balancing act wrote:

The CEO, however, has the objective of balancing two goals. The first is success in their customer markets. The second is success in capital markets.

Two goals! What makes these two goals particularly difficult is that to be judged successful CEOs must achieve both goals simultaneously. To achieve the first goal, the CEO must deliver more customer value than their competitors through better products, services and effective use of their channels. As a measuring stick, most of us would gauge success in the customer market by a company’s revenue or profit. The capital market, on the other hand, comprises investors that make up hedge funds, pension funds, mutual funds, private equity and banks. These investors are only interested in determining the correct valuation of a company to ensure they make wise investment.

For the capital market, absolute profits are very important, but that’s not enough. Investors want to understand how a company earned that profit. That’s because the size of the profit doesn’t provide any indication about how much effort it took to earn it. For example, two companies may be generating the same amount of profit at the end of the year on the same revenue but are valued very differently. The reason for this may be that one is competing through low-cost production and has high levels of debt due to automated factories. The second may be competing on high levels of service. It may have no debt but high labour costs. Even though the revenues and profits are the same, investors will value these companies differently, which in turn influences the behaviour of their respective CEOs.

What’s surprising, though, is that with all the metrics a company puts in place to measure the fiscal and operational health, very few are able to overtly measure and improve their employees’ innovative ability, and the true customer value they are creating. They have to learn to balance these in business.

Balance is needed everywhere even while creating value.

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation can Kill

The 6th Global Conference on Creating Value
Join the Creating Value Alliance at creatingvalue.co

Do You Capture All the Value

Stefan Michel of IMD gave an example of using carbon credits to pay for expensive LifeStraws that purified water (in HBR, October 2014). Carbon credits came from not having to boil water using petrol or wood fires. LifeStraws is an innovation that can create value if used (it is otherwise expensive for poor people) and value is captured through using carbon credits to pay for it.

Companies are so stuck to the standard ways of creating value, either through increasing price, marketing or through cost cutting. Most innovations are looked at as cost saving or opening new markets.
The concept of value creation says nothing about profit. Creating Value is profitable when a company captures value. Competition forces a company to look at capturing more value. Companies must understand that creating value must also translate to profit. Later I give examples of value creation that must be captured and converted into profit for the company. Thus, we later will see that many cost centres should be converted to profit centres to notice and capture more value and make their efforts profitable for the company.

Value is generally benefits minus costs. The benefits to the consumer are measured along with the cost to the firm. This alone does not determine profit, which is generally a Price minus costs type of an equation.
So, what stops value capture (and indeed value creation) from happening?

In my opinion, it is the way business and profits are taught and understood. Value is never truly understood even by the professors, and certainly not by the students who then go on to become managers. Finance managers suggest value is what you get when you sell something. Others see value as quality and use terms like value for money (implying price consciousness) and money for value (being more quality conscious).

Creating Value has a wider connotation. It is executing normal, conscious, inspired, and even imaginative actions that increase the overall good and well-being, and the worth of and for ideas, goods, services, people or institutions including society, and all stakeholders (like employees, customers, partners, shareholders, environment and society), and value waiting to happen.

 This definition throws up new thoughts:

1. Thus, to create value, companies must go beyond just improving the worth of an offering (product or service). Their concept of worth is Benefits minus Cost. Cost, of course contains price (and other out of pocket expenses like maintenance cost, running cost and the like) and non-price (the hassles, the energy required make things work or correct problems, the time etc.) In a way these are value destroyers, and if anything, prevent or reduce the capture of value, because using the notion of Customer Lifetime Value, you may lose a customer and create and capture less value.
2. Value goes beyond the worth of a product. Value is created when you do something good for a stakeholder be it a customer or an employee or the environment, or improve their wellbeing. Therefore, understand when you are doing something good, you are creating value like LifeStraws did and you have to find a way of capturing it. So, when your frontline person solves a customer’s problem, he is creating value for the customer. But when your customer cannot get the right person to solve his problem, value is destroyed and you can capture less value. Examples include getting the wrong dish in a restaurant and being told by the waiter, but this is what you ordered.
3. Value waiting to happen is a concept that says value and value ideas exist all around you, but you have to notice them first before you can innovate and create value from them. Most of us never thought of the driverless car twenty years ago. A few did and even fewer were able to make it happen and eventually some will create value from it. Simultaneously, value will be destroyed for professional drivers, servicing centres etc.

We must understand how value is created in the business world.

The process starts with the company deciding it can create value with an offering, The process is shown below

• Company determines it can create value with an offering
• Company determines what value it is creating and what value it will capture
• Company makes an offering and creates value for a customer in the company’s perception
• The customer determines his perception of the value of the offering
• He compares the company’s offer with the value he gets from competitive offers
• If his perception of the value the company creates for him is higher than for competitive offers, he will buy from you
• The customer creates value for the company by buying, and talking about the company and the product
• The company receives value from the customer. The company’s perception of the value it receives is different from the perception of the value the customer thinks he is creating.

This process is a circular one starting with the company creating and offering value to the customer, who receives and extracts the value and then creates value for the company which it can extract.

This process happens when you create value for society, or the environment, the employees. If you accept the fact that society, the environment, the employees the customers and other stakeholders create value for you then do not look at the employee or the customer or society or the environment as cost centres but as profit centres. This will change your mindset form thinking of the money spent and only cost cutting to how you can create and capture value from them.

So, then you work on what creates value for the employee and create more value for him. To do this you must understand the value the employee perceives he is receiving, not just the value you think you are creating. And you may convert the chief of HR into the chief value creator, and he must determine how to create and then get more value from the employee which the company can then capture.

This also makes the company much more innovative when looking at customers, employees, the environment or other stakeholders. What can I do that will create value for the environment and for me? Lesser packaging, recycled packaging. Lowering energy, capturing waste energy all create value for the company.

So, using the above thinking let us examine possible means of creating value that the company might have ignored. These can create value for the company and allow them to capture value.

1. A stakeholder or an outsider gives you an idea. Do you have a capture mechanism to examine it and see if it can create value for you and your stakeholders.
2. Someone recommends you and your company: How can you take advantage of this and create value?
3. Someone complains, and you solve the problem. Do you examine the problem and ask if it is systemic. Do you work on eliminating the problem for all customers, so that value is created for them, which you can capture later? This value created is lower costs by making fewer mistakes and higher revenues from satisfied or loyal customers.
4. You innovate something: Do you create and capture value from this innovation?
5. You use AI, data analysis, knowledge creation about your stakeholder to create more value for the stakeholder. How do you capture this beyond just cost reduction.
6. You reduce costs. Do you share the savings, thereby creating value for the customer and yourself? Savings can make present customers loyal and attract new customers.
7. You add value through engagement and relationship, and even build brand advocates. How do you capture value from their recommendations?
8. You build your image and your brand. This should create value for you in increased sales, consumer preference. Part of this value may come in the way your re-seller or partner positions your product.
9. You do things for your stakeholders (be they the environment, society, employee or customer) and they create value for you
10. 10.Examine all possible problems customer might have and try to eliminate them (taken from Gautam Mahajan in Business World, June 30 2023)

• Work on the problems
• Appoint a problem noter and a problem solver particularly on what the customer sees. For example, does the airline check in work on your device and is it synchronised with the check-in computer terminals? Does the seat work, does the TV screen work, do the escape jackets work? Is safety in place? Solve these problems pronto. I was told spare controllers for the inflight screens do not exist. Why not? You have no excuse of not having spares on-ground at least.
• Also, do not stop at solving individual problems. If the problem is systemic, change the system so that others do not have the same problem.
• Remember, that very few customers complain and even fewer do something about it.
• What causes staff to get frustrated? Use Customer Centric Circles to solve their problems, and you will solve many customer problems also.
• Do not run the airline with bean counters but with a heart. Most passengers will accept problems if they are brought into the loop. Use co-creation and co-operation.
• And for attitudes of the ground staff, get this changed. Use Customer Centric Circles approach as told in my book Total Customer Value Management (Sage, 2011)

Of course, you have to work on a prioritised list so that you can achieve your goal, bit by bit.

So, you can see value creation is all about a mind-set change. You need your executives to learn the 8 A’s (Mahajan, Creating Value for Leaders, Routledge 2023). These are:

Awareness: Leaders and executives must be aware of things around them, they must be curious, they must want to know more. Look at Value waiting to happen

Attitude: They must have a super attitude, positive, forward thinking, and multi-dimensional. Able to be strategic and innovative to practical. Some are functional in nature. Mind-set plays a major role

Ability: Much of this is innate, but some comes from learning and experience.

A great mind-set helps here

Agility: This comes from a mind-set and mental make-up

Adaptability: Being able to change with circumstances

Anticipation: Being able to be ahead of others by forward thinking and view.

Part of this comes from a 6th sense which is developed in your mind

Ambidextrousness: Capability of doing more than one thing at a time; capacity to think of different things

Action: Convert thought into action

Capturing Value from Customers

The obvious value capture is the sales price the company receives. But when you start creating more value you must capture more value. Giving away value is not a good solution. Sharing value is also possible. In the example below, I will show you how you can create more value.

To do this you must learn how to measure the value the customer or the stakeholder perceives he is receiving. In this kind of a measurement called Customer Value Added (Kordupleski, Mastering Customer Value Management, Pinnaflex, 2003)

CVA (Customer Value Added)         = Perceived value or worth of you / Perceived value or worth of competitive offers

Note the value you create is always compared to competition. And value you remember is Benefits minus Cost.

Our example is about a fertiliser company in India. Fertilisers are sold as commodities, because there is nothing to differentiate the product effectiveness, except the packaging and the condition of the fertiliser when received. Of course, the retailer makes a difference, but by and large it is the price that determines the sale. The fertiliser company, AA conducted a Customer value study with Customer Value Foundation and found they were creating more value for the customer than competition.

Our client, AA decided to get out of the commodity “hell.” They determined that a membership program or a farmers’ club should be started. By using farmer meetings, and by giving extra help to member farmers, and building an engagement and relationship, they found that they were creating more value for the farmer through another Customer Value Added study. In the chart below called a Value Map, we see a fair value line. Those companies lying below the line create value, whereas those above the line are destroying value. CC is close to the fair value line and is creating average value. AA is creating more value, but even much more value for the AA members.

On examination of the Customer Value added results, it became clear that the company was not capturing any value from the membership program.

They had choices:

1. AA could increase the price (see upward arrow) and create more value for themselves and capture some or all of it.
2. AA could reduce benefits to members. For example, they could reduce meetings from once a month to once in two months, or charge for membership. See arrow going to the left
3. AA could do both: increase the cost and reduce the benefits, see the diagonal arrow.
4. They could do any of these and share the value with the farmer.

This way AA was able to capture more value from its membership program and prevented it from becoming a giveaway program.

Recommendations

Here are some recommendations. Research can be carried out in these areas also.

• Give customers a reason to be loyal. Increase value to them, and share value captured if possible.
• Design a creative and engaging loyalty program. Add levels to your program to motivate your customers which drives them towards making a purchase decision.
• Provide great customer service. Look for areas where there is value starvation or destruction. Eliminate these. Post-Purchase (after-sales) experience should be outstanding.
• To achieve all this,
• First understand all sources of value, and create more value
• Measure value through a customer value added study
• Then find a way to unlock this value, and create value with it for yourself and your stakeholder.
• Then capture this value, and find innovative capture mechanisms such as LifeStraws did.
• This works for all aspects of your company and is not dependent only on your in-house marketing and cost cutting.
• Understand value waiting to Happen, and use the 8 A’s to change mindsets.

You can see this on WordPress:

Best,

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation can Kill

The 6th Global Conference on Creating Value
Join the Creating Value Alliance at creatingvalue.co

Creating Value for Readers. How Writers write, and create or destroy Value

Why do you read? To enjoy, to be entertained, to reduce boredom, to increase awareness, to learn, to be educated, to increase your knowledge, to be stimulated, to become smarter by delving into mysteries, possible and innovative solutions etc.

In this article I will focus on why people write, and that may also shed light on why you read.

The thinking on this article started when I was watching a movie and fast forwarding and skipping sections. My daughter-in-law who is a journalist asked me why I was skipping sections. You might miss something important, she said.

I know this and yet I do it. There are other movies such as She Said, and the Bank of Dave and Kathal and My Name is Vendetta where I hardly skipped scenes. Why? Did these movies address my needs, and were interesting enough to limit skipping. And I am sure others enjoyed without skipping movies whose sections I skipped. I skip because the scenes might be trite trivial, common to past movies and of no interest to me.

All this got me thinking: Why do I write articles and books?

I spend time in wondering what would be interesting for readers to read. And I realise that there are so many readers I have. Some may not even read the article. Others may have more expertise than me on the subject, yet others little interest or even less time to read.

Apart from figuring out what would be interesting, I spend time thinking about my offering. How will it add value to the readers? Will they learn something, or will I present a different angle or point of view? How do I tell them the value the piece can add to them or a company or society? How long should it be to maintain the reader’s attention? Will it be easy to read?

I tend to write rather short articles, being cognisant of my time and the reader’s. I do not go into too much detail. I try to ask questions the reader may have and answer them, and also answer some questions they might not have thought of.

All this thinking takes days. The actual writing of the first draft may take 15 or 20 minutes. Cleaning and modifying the draft up may take a few more days of elapsed time (not writing time).

I realise my readership is mixed with mixed interests. A few may read my latest book, Creating Value for Leaders from cover to cover, some may read parts of it, some will learn worthwhile lessons from it, and use it for furthering their careers and becoming better managers. Some will have no time for reading and miss a possible value creating opportunity for themselves. Some may read sections every day. Some may read sections at random, and yet gain value.

But first the reader has to buy the book or access it. How much would it cost to access it? How much time does he have? How does he think this will benefit him? Make him smarter, more aware, make him learn something new, make him think, make him explore different ways for doing things, make hm exercise his mind, make him better at what he does, make him think of things he does not think about and focus on them like creating value for his family or society, or looking at creating value for himself, make society a profit centre rather than a cost centre, and that more value is created for him when he creates value for others.

Value is the cost (of accessing the book, and the time and effort of reading) versus the perceived benefits of reading the book.

I then turn to thinking of other writers.

Some write to show they are smart; they know more than you or to present a different angle. Others educate you and relate to you, like Francesca Mari’s article on Housing in the New York Times. I learnt a lot. Some write to let out steam and to show how smart they are (and their knowhow), others to make money, some to share experiences, knowledge and ideas, yet others to entertain, and some to create suspense (often writers attract you with a title and do not get to the point right away to capture your reading time). Examples of this are in web-based news to attract you to read on topics they think you will read. So, the title may be new trains in India, and three fourths of the article is about trains, and only one paragraph at the end about new trains. Often, I stop reading the article because it does not make its point fast enough.

Other authors add detail, some which I can find fascinating, such as in Hemingway’s Travels with Charlie, and others that I find meaningless and boring.

I wonder if style and substance make people buy. Some writers combine both, whereas others rely on one or the other.

As I said genre is important. The great divide between literary fiction and fiction. Why can’t there be literary content in pulp fiction and pulp fiction content in literary fiction? This can happen, for example, when an artistic movie is made out of a routine plot.

Christine Seifert in HBR says reading literary fiction helps people develop empathy, theory of mind, and critical thinking. When we read, we hone and strengthen several different cognitive muscles, so to speak, that are the root of the EQ (Emotional Quotient). A good reason to write and read.

Fiction can improve our imagination and thinking process. It might take us elsewhere, into different worlds, different challenges, innovative thinking and solutions.

Both types of fiction make you flexible, more intuitive, more open to different ideas, even though fiction is plot driven and literary fiction is character and language driven.

I started thinking the best writers first understand your needs and questions. What will the genre of the book do for you or should do for you: excite you, titillate you, fascinate you, captivate you, educate you, relate to you?

Some people write to show they can write, the longer the better. For me the shorter the better because less time. Less chance to skip.

Think of reading a newspaper or selecting a book.

You may read only portions of the newspaper. On an article you may read sub headlines, and maybe on one or more read the entire article or parts of it because of time, interest, or wanting to know only key points and not all details. You may never remember all the details.

Why do you write? How do you add value and to whom and how. And why do you read? Will value be added to you, and make you more whole?

I made this short so that you would not skip sections. How would I attract those that did not read? Ignore them? Look for them? Segment them for further action? Should everyone read everything? Of course not.

I look forward to learning from you, readers and writers, and adding value for me.

Best,

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation can Kill

The 6th Global Conference on Creating Value
Join the Creating Value Alliance at creatingvalue.co

Sell Less not More. Create more Value

I do not mean by sell less that your total sales should be lowered. I am saying sell what is necessary to the customer, and not force him to buy more than is needed (and later to be thrown away) or consume more than is needed. Marketers have learnt to sell more, or get consumers to consume more. 

Take toothpaste, whose caps sizes vary from 13 mm to 40 mm. Lemin Wu and Yuheng Zhao in a 2014 article on “Loyalty and Durability: Evidence from Toothpaste Tubes” found that the usage of toothpaste went up when the cap size was increased (which means the opening of the tube), and consequently the market share went up. This also meant the consumer is forced to use a larger amount of toothpaste with larger tube or cap opening. 

Soft drink manufacturers found the same thing: the larger the bottle opening the more the consumption. So, they went from 28 mm caps to 38mm caps. However, consumers had difficulty in drinking from the larger opening, and the cost of the container was slightly more with the larger opening. So most soft drinks use 28mm size caps. 

The single serve soft drink can has gone up in size from 200ml to 380 ml. The taller cans look bigger than squat cans, causing them to be attractive buys.

Bottles where 200ml was a standard single serve size have gone up to 600ml. All this forces you to consume more. 

We have so many examples of this. In restaurants they tend to give you larger plates, which makes the quantity look less and makes consumers want to buy another dish. In buffets, smaller plates are used, and the same amount of food looks like more, reducing overall consumption. 

On another note, take medical creams. Let’s say you need an anti-bacterial cream to be used a few times. You are forced to buy a cream that will last for 30 to 50 times the usage, causing you to throw it away. 

This is true for anti-bacterial swabs, they are sold in 4 inch by 4 inch size swabs, 4 in a box. You may require only half a 4 inch by 4 inch swab, and then have to throw the rest away. 

There is also the question of buying something like a phone. Can you buy a basic smartphone. No, you cannot. They come with all kinds of bells and whistles that you do not need, but have to pay for them. Another way of selling more or getting the consumer to buy more. 

Netflix, instead of making a movie or a very limited series, will make a longer series, forcing the viewer to view more episodes. 

The world is replete with these examples. Why? Of course, companies want to sell more…their definition of value is more sales, more profits (and more waste or unnecessary consumption at the consumer’s end). 

They hardly look at the value the customer perceives. Often consumers have no choices and so they have to buy more, spend more, waste more. 

Gone are the days where you could buy exactly the amount you wanted, when items were sold in bulk or in loose form. Food like rice and flour, fruits and vegetables (half sold in loose form, and half packaged) were available only in loose form. 

In India, to increase sales and indeed rural sales, items like soap, shampoo, etc, were packaged in single serve or smallest sizes possible, opening up new consumers and markets (consumers who will be marketed to buy larger sizes), and new segments. An example of selling less to sell more. 

This increased value to these consumers and to the company also.If you accept the role of a company is to make more profit, then larger is better for the company. If you accept stakeholder value including customer value is to be increased then you start to look at the customer’s view point. Else smarter companies will displace you, or the customers will not buy as much. Tilt the balancing act in favour of the stakeholders. 

Let me end by quoting Jeremiah Owyang in a 2008 blog called “Marketers get people to buy stuff that they don’t need” 

“This was the quote I heard last night from someone I know, his impression was that the role of Marketers was: “to get people to buy stuff that they don’t need”. Partially, he is right. The reputation of marketers is often negative, where marketers are considered to be involved with trickery, deceit, and mass consumerism. 

“In business school, we learned that the classical definition of Marketing was to connect customers with products, yet the definition never included tricks, lying, or manipulation. If you’ve read Seth’s book that All Marketers are Liars, you’ll quickly realize that the premise of the book suggests that marketers actually tell consumers the stories that they want to hear. I know most marketers will feel better about their profession after reading this book.” 

I leave it to you, dear reader to decide what is right, and whether you have been forced to overbuy. Can we buy less and not more? Did this create value for you?

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation can Kill

The 6th Global Conference on Creating Value
Join the Creating Value Alliance at creatingvalue.co

Brand and Value Disappointment

Bob Passikoff of Brand Keys stated that “For Wall Street it (Brand Disappointment) was about missing expectations regarding new subscriptions and new customers. And the brand disappointment thereof, with a forecast below analyst expectations and estimates for the next three months.” Brand disappointment leads also to value disappointment, value starvation and value destruction.

But why does Wall Street get disappointed? It is because the brand has disappointed the customer, and has lost loyalty from “confirmed customers” reflected in the Customer Loyalty Engagement Index of Brand Keys? Netflix no longer is present in the list because it has stopped allowing sharing of passwords. We understand this is not something customers want to lose, and losing it causes brand disappointment. Brand keys goes on to discuss SPOILER ALERT. They state that loss of loyalty is due to expectations not being met. They say expectations are emotionally-driven and are completely unconstrained by reality. And, apparently, so are subscriber agreements!

While I agree with brand keys, I am even more disappointed by brands for poor service and for increasing my effort.

I’ll give you 3 examples that happened to me in the last few days:

1. American Express, know your customer registration
2. Oneplus, poor buying experience
3. Citibank, nominee registration 

American Express, know your customer registration

Those of you living in India know that the Know your Customer (KYC) data is needed every now and then. My American Express card advised me to fill one. They already have my Universal ID, in India called the Aadhar. They now need a passport or a driver’s license. They want the last and first page of the Indian passport, or both sides of the driver’s license. We must upload these pages as separate documents. So first we have to upload these in pdf as files.

Unfortunately, I have both the passport first page and last page in one file. I was forced to load this twice, once as a first page and once as a last page. The same would have happened for my driver’s license.

Not only this, I have to fill out data from the driver’s license or passport, so that their staff does not have to do any work. Let the customer do extra work!

Why is this:

• The people designing the upload system do not understand what I had done as a possibility. That makes them not so customer friendly
• The convenience of the company is more important than that of the customer.
• Why not allow mobile phone pictures or whatsapp pictures to be accepted?
• Use technology more effectively. Make it simple!

Oneplus, poor buying experience

A few days ago, I bought a Oneplus 11R phone at their store in the Saket Mall, Delhi. The salespeople wanted to tell me about the technicals of the phone but not what I wanted to know. Why shouldn’t I buy the more expensive Oneplus 11 phone. How different was it from the 11R? I got vague and technical answers.

I decided to buy the 11R and to exchange with my existing phone the One plus Nord. The exchange review took almost 30 minutes, and another 20 minutes for billing.

Why should I buy with so much customer value starvation?

Then they said they would transfer my data. This was so sloppily done that when I came back from lunch the system update had not been done and I had to wait another 15 minutes for this…Horrible, non-caring attitude. And no one took responsibility and no one said I am the manager and tried to defuse the problem.

I compared this to the Apple buying experience which was great!

To improve:

• Train the staff to listen and be attentive, and answer questions that are asked
• Make the billing system faster
• Ensure the transfer of data is complete and the system is updated so the customer has a seamless experience
• Have someone responsible to improve the work and understand what went wrong

Citibank, Nominee Registration

Citibank retail business in India has been sold to Axis Bank, but still goes under the Citi name. I wanted a nominee on my bank account. So, I sent someone to get a nomination form. I was told to send a letter for the form. I finally got the form, and filled it out and sent it to the Bank.

A few days later I get a call, asking if I had sent a nominee form. Who was the nominee, why was he nominated, what are his qualifications, where is he working? None of these were questions on the nominee form, and finally I refused to answer any more questions. I asked her to connect me to the manager, and she said he was not in. When will I get to know if the nomination was registered? Soon, she said. I still have not heard a week later. Customer value starvation, and Brand disappointment.

• Citi should make routine jobs seamless
• They should follow up and tell the customer the work is done.

Axis, who bought Citi, be aware of Citi problems.

All these are SPOILERS but the companies do not care to look into these, let alone improve the systems, and so there is brand disappointment, and possible brand erosion and brand destruction.

Who cares about all this and value destruction?

Friends, share your experiences with me.

Best,

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation can Kill

The 6th Global Conference on Creating Value
Join the Creating Value Alliance at creatingvalue.co