Value Centers

Posted November 29, 2022 by Customer Value Foundation
Categories: Business & Management

I recently wrote about Customer Relevance. One way to make any department or stakeholder relevant is to convert it into a value center.
Value Centers are what were traditionally thought of as cost centers. Later we tried to make these profit centers. They really need to be value centers

For example:

Service was considered a cost center. Some companies have tried to convert these into profit centers. Fewer have tried to make them value centers, whereby customers and those contacting and working with the value center receive high value, i.e. they feel good, they feel valued, they feel they are special, and the service is first rate. This then converts service users into advocates of the company, increasing its sales, and thereby profits. Make service a value center. HDFC Ergo’s cashless health insurance service is so fast and seamless, that customers like me would be foolish to leave them. It is becoming a value center.

Call Centers are a prime example of a center that can create value, i.e. become a value center. Unfortunately, many call centers leave customers disgruntled, or frustrated, with half information or half-finished tasks. The problem is the reporting system of the call centers. It is based on efficiency and speed of action and shorter duration calls. It is not based on the customer satisfaction or experience. Generally, call center people are at the lowest rung of the corporate ladder. They are not properly empowered with the right software, information or tools to solve customer problems. I always tell my client’s VPs to spend an hour or so every now and then with call canter people so that the VPs can listen to the problems faced by the call center people and consequently the customers, and get a sense of customer issues. Another idea for companies is to have one call a week sent at random to a CXO. If they cannot solve the customers problems, the call center software will be changed. AI can also help. Convert call centers into value centers. We had call center people meet VPs of a Godrej division. The VPs who had been looking for years at call center reports and seeing improvements in number of calls handled etc. were shocked at basic problems faced by customers, which they proceeded to correct.

Governance: often becomes a compliance tool, must do to avoid penalties. It is not considered a value center where companies can become better citizens and are sought by their customers for their ethics, their fairness, in short for their values and traits. The Tata companies in India are an example of good governance, and in a sense their governance is considered a value center.

Sustainability: Many companies consider this a necessary evil. Others try to use PR to pretend they are sustainable, and this leads to green washing or value washing. If companies convert sustainability efforts into profit centers or value centers, they will soon find that this leads to their company being chosen over competitors or being quoted for their good work which causes customers to prefer such companies. Unilever was preferred for edible oil in retail because they phased out non-sustainable production of palm oil, and their procurement of such oils from sustainable conscious suppliers increased the cost. Customers were willing to pay for this and selected Unilever for their effort.

Corporate Social Responsibility (CSR): Here is yet another area that can be a value centre and promote your company. For example, in India, heavy earthmoving equipment suppliers are setting up skilling centers whose cost is covered by CSR funds. This increases their visibility, their reach, and users understand the advantages of their equipment, making them the preferred and word of mouth supplier. This also ensures proper and efficient use of the equipment by skilled operators.

The above are just a few examples of value centers. Remember these will break silos, encourage a different mindset, and help make companies more profitable, because of increased customer recognition and desirability and therefore more sales.

Values Create Value: We have shown at Tata Power through studies that Values Create Value. Customer choosing a power company were not influenced by the quality of electricity and service (they were similar in most companies) but by the trust in Tata Power, their ethics, their efforts to be sustainable and reduce costs. This caused more customers to move to them over competition.

We believe creating Value centers will lead to better and stakeholder focussed thinking, and will make companies more human, more approachable, more desirable and more relevant to the stakeholder with fewer complaints.

Are you working toward such value goals?

Best,

Gautam Mahajan, President, Customer Value FoundationFounder Editor, Journal of Creating Value jcv.sagepub.comNew Delhi 110065 +91 98100 60368mahajan@customervaluefoundation.comhttp://www.customervaluefoundation.comTwitter @ValueCreationJBlogs: https://customervaluefoundation.wordpress.com/Author of Value CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant LogicCustomer Value Starvation can KillJoin the Creating Value Alliance at creatingvalue.co

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Value and Relevance: Display Customer Relevance

Posted November 16, 2022 by Customer Value Foundation
Categories: Business & Management

So much is written about value and about customers, and customer value. Likewise, money is spent on creating value. One prime example is CSR (Corporate Social Responsibility). A given percentage of corporate profits has to be spent on CSR. Most CSR spending is not relevant to creating value for the company, other than as a charitable tool. If spent wisely in areas that could improve the company’s image, especially with customers and other stakeholders, and get more people wanting to do business with them, then the CSR money is spent on creating value for the company and the spending becomes relevant.

So much work is done by companies to improve the lot of the customers. However, the spending the work does not lead to an improvement in satisfaction (see the ACSI or American Customer Satisfaction Index). The ACSI score is 73 today, the same as what it was in the year 2000.

Has satisfaction not improved? Are people working on relevant areas or spending money foolishly led by eager executives and consultants with little knowledge? One must ask and get answers for this question.

Recently Prof. Prasad Naik suggested among other ideas, a Customer Focused Strategy. He went on to say: Measure what is important and focus on it.

He is making a case for relevant work.

Experience is too omnibus a term and that is what makes it less effective. It is not always focused on what is truly relevant to the customer. One learns very soon that one cannot be all things to all people. We have to be relevant and useful.

The Role of Customer Mindset Metrics is important as Prof Naik says, ‘It is not experience alone but the mindset.’ Experience can influence the mindset to some extent, but it is the customer’s mind we must understand. This is what I have been preaching. Your mindset truly differentiates you in the eyes of the customer and it shows on how you deal with him and how relevant the dealing is.

Experience and trying to do everything is like the story of the golf balls and sand and coffee. In this, if you put golf balls in a jar, you can fill the spaces with coffee and sand. But if you put the sand in first, there will be no space for the golf balls.

What this says is, if you do not take care of the big things, the important thing, the relevant things first, you will fill the jar with sand and the important things will never have a chance. If you first take care of relevant things, then the small things fall into place or are so irrelevant that we do not need to worry about them. Let this be a lesson for people who want to manage all experiences.

https://www.facebook.com/watch/?v=646465275742722

In the measurement of customer value through a metric called customer value added, we also find out what is important and therefore can concentrate on important things instead of trying to do everything

Lastly, remember what Bill Price the first global customer service manager for Amazon said to Jeff Bezos: No service is the best service. Service is irrelevant if you are doing things right, when you have zero defects, which leads to zero complaints. How much money you can save by having no defects and no complaints and no service!

Be relevant in your sales pitch, in discussions with your employees and in your life. Customer relevance will make you and your customer successful. Make corporate relevance a part of stakeholder relevance.

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 CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant LogicCustomer Value Starvation can Kill
Join the Creating Value Alliance at creatingvalue.co

Hire a Chief Problem Solver to Create Value all round

Posted November 9, 2022 by Customer Value Foundation
Categories: Business & Management

There is no concentrated effort to reduce complaints in companies. Complaints and customer problems are never put on a priority basis or a war footing. The customer effort is based on giving delight to customers by most companies. However, the bulk of the problems occur because there are small, niggling, mind-bugging problems and hassles customers face, see my book with Walter Viera, Customer Value Starvation.

The concentrated effort will also lead to zero complaints, and so this becomes a worthwhile effort. Most companies have the processes and thinking to reach zero defects, but they have not worked on this. This is a call for them to take one more step to customer relief and nirvana. After all, defects lead to complaints. Zero defects normally mean the products are free of defects. But this does not apply to service, web site information, call waiting, customer journey issues and other easily solvable problems. This is an easy and good way to increase customer value.

For example, my Epson printer every now and then states check ink level. When that happens, it overrides print and scan commands. I have to manually close this alert on the printer. The Epson serviceman shrugs his shoulder and says you have to live with it (meaning do not complain, one sure way not to get to zero complaints!)

Do executives and CEOs truly understand the problems customers are facing? Do they really care or look the other way as Epson does? Do they have a problem solver whose first job is to look for and identify problems and then solve them within the company and outside, to internal and external people and entities.
What are they doing about these? What should they be doing?

Do CEOs initiate sessions on looking for customer problems, possible solutions and how to correct and prevent in the future? I have never heard of such meetings, if they are held at all!
Problems are of two types, inside companies and outside.

Inside companies, problems that employees face in dealing with each other and outside world, e.g. not having answers, having wrong info, not being able to answer or take decisions or reach decision makers, not being able to return calls after promising, not being enabled to solve problem. Sometimes they may be empowered but not enabled (which means supposedly they have the power to solve customer problems but no means and tools to solve them)!

What does an employee do when he hears that the ombudsman does not answer the customer’s complaints, or the grievance cell does not work, for example?

I had this problem with Citibank when I was told to escalate the problem to the ombudsman…who never answered!

Outside companies: you think employees do not notice the problems customers face? Most do, because they talk to customers. Most of the time, they have no way of correcting them or escalating them.

The solution lies in hiring a problem solver. And for the employee to make him aware of the customer’s problem or defects in the company’s systems causing the problem.

Think of a Chief Problem Solver and Zero Complaints and you will be adding more value than all your competition put together!

A couple of examples that could be solved if there was a chief problem solver:

Tata Play: I wanted to renew my annual contract. However, there is no option to renew. The only option is to recharge and by an amount I would select. But what is the annual payment? Is there a discount for lump sum payment? So, I decided to get off the net and tried via WhatsApp. In middle of using WhatsApp, the information page was replaced by an ad of the cricket.

Finally had to call to get the amount Why is it so difficult? Took an hour to pay. Does Tata Play care?

Tata Play probably does not even know these problems exist and if they know, they aren’t bothered.

A Chief Problem solver would have been alerted, and even tried a mock exercise to pay and found the problems and possible solutions.

Some people say use data to find problems. This may or may not bring any problems out. To use data, one must know what data to look for e.g. data on wait time, data on repeat calls, data on long calls and why the calls lasted so long? Was it because the customer had to repeat himself, or the service person had no solution but to tell the customer have you tried this or that?

Data on calls promised to be returned and not returned, data on whether bosses are seeing problems, data on whether CXOs receive a customer complaint, or work on a call desk.

The Chief Problem Officer has to devise how to find problems, by talking to customers, by talking to people within the company and front-line people. He would initial Customer Centric Circles (see my article in the Journal of Creating Value, 3-1, 2017). And then he has to get solutions. He should not become a service centre or call centre but have them collect problems for him to solve in a generic fashion.

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 CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant LogicCustomer Value Starvation can Kill
Join the Creating Value Alliance at creatingvalue.co

Redesign work to Create Value

Posted October 29, 2022 by Customer Value Foundation
Categories: Business & Management

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 the essence of value, 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 enoug
  • 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, and conscious about right and wrong.

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.

Thanks,

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 CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant LogicCustomer Value Starvation can Kill
Join the Creating Value Alliance at creatingvalue.co

Adding Consciousness to AI Creates Value

Posted October 20, 2022 by Customer Value Foundation
Categories: Business & Management

I have always been worried about the advent of AI, and how it can impact all of us. AI increases efficiency, reduces error and risk, has unbiased decisions and is inhuman.

Do we, for example, want biased decisions? Do we want human decisions or just mere machine decisions? What tasks can we leave safely to AI and which tasks must require human intervention? How can we take advantage of human strengths and machine strengths? Humans have limits in their machine type work. Should AI be used to only help here, or should humans help AI with interventions where consciousness, psychological thinking and awareness is necessary? Can AI become accountable?

I think we need to start with ‘human’ designers, and their cognizance of the dangers of AI, and human limitations. Only ‘smart’ humans can understand and design smart machines, and human like machines that can create value beyond the mechanical and rote value. Can humans think the way AI thinks or could think?

Artificial intelligence by definition is not real intelligence, it has limitations. This has been recognized for years by leaders, and more work is being done in this area. Many humans do not understand that the AI systems could be smarter than humans in logic and systemic thinking.

Much of this started with Guilford in the 1950s when he said creative thought depends on convergent thinking and divergent thinking. Convergent thinking, is the ability to answer questions correctly, and is predominantly a display of memory and logic. Divergent thinking, the ability to generate many potential answers from a single problem or question, shows a flair for curiosity, an ability to think “outside the box.” This is a form of creativity. (Details available in Atlantic magazine). Humans seem to be stronger in divergent thinking than computers who excel in convergent thinking.

However, now systems are being designed with divergent thinking capabilities. This may mean that ‘real’ intelligence is being built in. Perhaps machines can have evolutionary thinking.

For example, Tim Cook suggests that augmented reality (AR) — a technology that combines real-world objects with computer-generated ones — is more psychologically palatable than metaverse. It strikes the right balance of weird and acceptable.

The purpose of this article is not to delve into how artificial intelligence can grow into real or human intelligence but how all of us must understand the limitations. When we use artificial intelligence, we start to realise we are not as smart as we think we are.

Sometimes when creating luxury items and selling them we have to create a n attraction that is human in the buyer: liking, pride of ownership, joy of owning etc. Our approach has to be human centric. Can we use AI to augment our offering to improve mindful attractiveness. Luxury items require us to create extreme value for the buyer. Connecting with communities and sharing values can be augmented by AI. Tickling the imagination and causing psychological value can also be augmented by inputs from humans and machines that can lead the seller intelligently.

Who will control the future? AI or humans? Will there be trustworthy AI systems? For trustworthy systems, we must understand the AI biases, design and how it thinks. Trustworthy systems would let us do this and not misbehave. Systems need to be fair, transparent and explainable. There are many questions that can impact value creation and value destruction.

To create value for ourselves through AI, we then must have this realisation of the limitations, the stream of intelligence and consciousness and awareness that we have and the AI systems have. We must learn where to exercise control, and put safeguards. Then and only then will we create adequate value for ourselves and reduce risks of machine overrides. Remember, AI will be ubiquitous, like electricity, and not like a stealth missile. AI devices maybe implanted in humans, making them smarter.

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 CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant LogicCustomer Value Starvation can Kill
Join the Creating Value Alliance at creatingvalue.co

Wellbeing and Value Creation: Are they two sides of a coin?

Posted September 22, 2022 by Customer Value Foundation
Categories: Business & Management

The GNP does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials… it measures everything, in short, expect that which makes life worthwhile.

Robert Kennedy, 1968

Many countries are looking at wellbeing as a goal, for the country and its people and for education. Japan has set this goal for 2030. India in its 2017 health policy and agenda for 2030 stresses wellbeing.

According to the Oxford Dictionary, ‘wellness’ is ‘the state of being healthy, especially when you actively try to achieve this. Well-being, on the other hand, is considered ‘general health and happiness, a state of emotional/physical/psychological well-being’. Wellness is an essential feature of wellbeing. Unfortunately, many authors refer to wellness as being wellbeing. Wellness looks at the physical health.

Kai Ruggeri of Columbia University states in a paper, Well-being has been defined as the combination of feeling good and functioning well; the experience of positive emotions such as happiness and contentment as well as the development of one’s potential, having some control over one’s life, having a sense of purpose, and experiencing positive relationships. It is a sustainable condition that allows the individual or population to develop and thrive and cope with stress.

Generally, we look at physical wellbeing, financial wellbeing, career wellbeing, social wellbeing and community wellbeing.

Wellbeing is measured by various factors such as happiness and even economic surrogates such as GDP. Bhutan, for example measures Gross Domestic Happiness. Wellbeing is also judging life positively and feeling good.

Well-being encompasses many different elements. This includes positive emotions, such as happiness, joy, contentment, excitement, wonder, and calmness. It also includes good physical health and positive, meaningful social relationships and connections. The latter is what constitutes social well-being. (Quoting Jenna Sinclair in 2021)

If wellness is physical health, wellbeing is a mindset. In life it is easier to do functional things, than to change mindsets. In business functional work is easier than changing mindsets. Thus, conducting HR or marketing exercises are easier than changing the mindset from thinking profits are the most important part of a business to improving the wellbeing of the company’s stakeholders.

Wellbeing helps people to function better, be more productive, better in learning and creativity, and better socially. Higher wellbeing can lead to longer life, and physical health, and people with wellbeing seem happier.

Miwa Nishinaka, Kagawa University states there are differences in wellbeing. One is personal wellbeing, which, in a narrow sense, is a state where humans can exercise their potential. The other is social wellbeing, which, in a limited sense, is a social state where you can have opportunities to seize personal happiness, and that state is guaranteed for the future.

Nishinaka shows differences in these types of wellbeing. She gives examples of conflicts of interest that exist between social wellbeing and personal wellbeing, such as a waste incinerator being necessary for society, but not wanting it in your neighbourhood. And conflicts between social wellbeing are things like endangered species that need protection are living in a proposed dam site.

Where does value fit into all this. Many wellbeing gurus suggest wellbeing improves the value people perceive. To me value and wellbeing are similar, perhaps two sides of the same coin, as the definition of value creation is:

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, environment and society), and value waiting to happen.

That is why our parents teach us to be good kids and to do good. But this is soon overtaken by the goal of making a living, of being successful.

This definition shows that creating value is meant to do good and improve the wellbeing of people. Wellbeing people say it increases the value that people perceive.

Obviously, there is a difference between wellbeing and value. Both are perceptions. Value created is felt as something positive and changes as the value changes. Wellbeing is a state of being and feeling and is a result of value creation and changes. As Value is perceived, wellbeing, the end result is improved.

Thus value and wellbeing are very closely related. One has to create value to improve wellbeing and improving wellbeing is valuable to us.

There is a connection between values and wellbeing. It has been shown that if personal values such as honesty and integrity that one has, can improve the sense of wellbeing.

Is value a proper way to measure wellbeing? Or should we be seeking a corelation between the two? Today we can say value creation leads to wellbeing, and improved wellbeing creates value.

Companies pursue growth, which is generally materialistic. Our sales went up from 1 million dollars to 2. Progress is measured by growth and ethics (discipline, morals, honesty and norms etc,), Success is progress along with humanity, morals, caring and improves wellbeing. Companies need to achieve wellbeing seen as success.

Paraphrasing Leonard Sweet, the future is something we ‘create’ actively, not something that ‘happens. Peter Drucker goes on to say the best way to predict the future is to create it. We have to keep creating value to improve wellbeing.

Thus a society seeking wellbeing as a goal, let’s say in 2030, has to get its people education in a value creation and humanity, moral and ethical mindset, and not train them just for functional work. Value creation has to be taught and people have to understand their role is to create value for improved wellbeing of people and society. That means our education system has to educate, not merely train. It has to make value creation a way of life, and to teach and give degrees in value creation as a means to improve wellbeing.

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 CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant LogicCustomer Value Starvation can Kill
Join the Creating Value Alliance at creatingvalue.co

Value Creation for Transformational Growth of an Organization

Posted July 17, 2022 by Customer Value Foundation
Categories: Business & Management

I am the Founder Editor of the Journal of Creating Value and mentor the Creating Value Alliance. I help CEOs create value. This article is about Creating Value and Transformation. We have 2 Value Schools in Japan, a Value research centre in Kyoto and a centre in Denmark and the USA. Our 5th Global Conference on Creating Value is in Japan in September 2-4 2022

Transformation is change and the process of changing. Value Creation helps you transform in the right way and by doing good. Leaders have to create value to transform effectively.

You have heard about the process from the previous speaker. I will not speak about the process but about your purpose, how to create value, how to get a value creation mind-set and how to create a truly lasting transformation.

Companies like people keep undergoing transformation routinely, and we notice some of it. McDonald’s making a vegetarian burger is transformation. Many during Covid have tried to become more nimble, agile and fast. Companies are learning that customer centricity is real and a need.
Many companies keep transforming themselves over the years. Many are transforming with technology and digital technology and data.

But some go through major transformations

Amazon as an online retailer of physical books in 1995 to selling for others in 2000. In 2006 cloud computing and one of the biggest in the world

American Express started in 1850 as an express mail delivery and transformed to credit cards 1950 or so.

Corning from glass bulbs, to specialty items, Pyrex and gorilla glass

IBM decided in 1993 to abandon hardware and moved into soft services

Netflix from renting DVD’s to streaming content and own content

YouTube a dating site in 2005, bought by Google in 2006 to become a video site

Apple from desktop to mobility when Steve Jobs returned.

Management must learn to transform effectively.

You can learn all about transformation from the net, and it is all process driven Steps include:

1. Evaluate your existing business situation
2. Get executive buy-in
3. Get employees’ buy-in
4. Engage all employees in daily conversations
5. Focus on your communication strategy
6. Build an efficient change management process
7. Set clear short and long-term goals
8. Foster a sense of urgency
9. Eliminate fear in the workplace
10. Enable cross-departmental collaboration
11. Choose carefully the communication channels you’re about to implement
12. Be agile and encourage new ideas
13. Close the skill gap at your organization
14. Measure your employees’ engagement

But that is why people fail and companies fail because they do not focus on mind-set

Value Creation and Leaders

Let me start with the definition of value. Value is a word used contextually and sometimes loosely. Value is not price; Value does not mean quality.

Then there is a bunch of people who say Price for Value meaning they are price conscious. But you also have heard people say Money for Value meaning they are conscious about quality.

To put an end to all this, the Journal of Creating Value has a definition which is in use now:

Creating Value is executing pro-active, conscious, inspired or imaginative and even normal actions that increase the overall good and well-being, and the worth of ideas, goods, services, people or institutions including society, and all stakeholders (like employees, customers, partners, shareholders and society), and value waiting to happen. and to do good. But this is soon overtaken by the goal of making a living, of being successful.

I will discuss Value waiting to happen later.

In a business sense, value is the worth or the value of your products that makes people buy. They buy your products over competitive ones if they perceive you create more value, more good, better worth.

And you are creating value when you improve the well-being of people. So, transformation must have an ultimate goal of improving the well-being of people, (employees and customers, partners and society, and of course shareholders).

We have to keep this definition of value in mind.

Today I am going to discuss 4 different areas of Creating Value and Leadership. I have already defined Creating Value for you as a backdrop.

In this talk, I will focus on four points for transformation:

  1. Phil Kotler on Value Creation and Marketing
  2. Primary role of a leader is to create value in Transformation
  3. Leaders must have Values
  4. Leaders of the future must transform through Value Creation

1. Phil Kotler on Value Creation and Marketing

Kotler wrote in the Journal of Creating Value that Marketing is Value Creation.

He says: Leading marketers see modern marketing to be all about value creation. Marketing aims to meet human needs by creating value.

He goes on to say: I do not know what you thought marketing was, but in my mind, marketing is intrinsically a value-creating discipline.

Outstanding marketing companies see marketing and transformation as intrinsically involved in value creation.

2. Primary role of a leader is to create value in transformation

Since this talk is about Creating Value and transformation, let me focus on this aspect. There are four areas I will touch on:

  1. Your role as a Leader and in transformation is to create value.
  2. Not taught to create value
  3. Getting a value creation mind-set
  4. Value helps you strategize and innovate better
  5. You start to look at value destruction and at
  • Value waiting to happen, includes innovation

Why do I mention this?

Because transformation is not a process, it is not just a change, it is not just functional. To be effective there must be a mind-set change, which impacts culture, change, and transformation. This mind-set change comes from creating vale

Leaders Create Value in Transformation

Let’s talk about leaders. People are leaders not because they meet their performance expectations, but because they create value, that is they go beyond the performance expectation. Notice all the leaders around you are there because they created value. Just meeting numbers and the performance expected is not good enough and especially not so in today’s world.

Let me give you two examples

Take the Covid crisis. Many companies hide behind the problems caused by the crisis. Some companies in India ignored the labour force in their factories because the factories were shut down due to lockdown. The company I am speaking of (Parijat Industries) focused on these workers, and the moment the lockdown was removed, they were ready and 100% of their work force returned. Consequently, for a time period they were the only manufacturers and captured a higher market share, and even their collections (debts) improved by 70%. This happened because, first they created value for their employees and second, they created value for their dealers because they were able to supply to the dealers and had transformed themselves successfully in Covid times.

The second example is of Bajaj Auto who 10 or 15 years ago started to feel that China might compete for motor cycles in the Indian market. They realised they had to start from scratch and hired fresh people to design, to transform to market world class bikes. They wanted a value creation mind-set. In a few years they had higher quality and higher technology bikes at reasonable prices. Result: Chinese bikes could not enter India.

Bajaj took these bikes into Africa, where China dominated. They took over the market leaving the very high end to Japanese, and the very low end to the Chinese.

Leaders not taught to create value

People who reach the top do so by creating value…No one has taught them how to do this. They do it because it is in their nature to do so

Thus, they create value unconsciously and can also destroy value unconsciously.

And so, we have to teach them how to create value in a more effective manner while transforming.

Getting a value creation mind-set

Value Creation for leaders is about you. You as a person and not just a leader.

You can only create functional value for yourself, like learning something, education, training, practice, exercising.

But the most amount of value you create is when you create value for others…so when you start to create value for your people, your employees, your customers, your partners, society, they will come back and create value for you.

And they in turn create value for you…they recognise you as a value creator. This is the most important transformation you can cause.

Value helps you strategize and innovate better

We have to have a purpose, and the purpose is what we stand for, why we are in business. What is our purpose? It is just not to make money which is a result but to achieve some good.

Here we will look at:

  • You start to look at value destruction and at
  • Value waiting to happen, includes innovation

You start to look at value destruction

So, your transformation should create value and not destroy value. First, gone are the days that the business strategy was all you needed to do.

While doing your strategy or while looking at projects you MUST start to look at value destruction. What is the value destruction potential of what we are doing? For an electric autonomous car there is value destruction for professional drivers, existing manufacturers and repair shops, insurance, and for taxes.

Another example is smart cities. We all agree this is a transformational effort. Everyone will vote for smart lighting. I want you to look at the value destruction potential: Street lights even smart ones require poles. Poles like other infrastructure are used for less than 20% of the time, which is value destroying. They are expensive, they take up land space. If we accept these to be value destroying, we are forced to look at alternatives. And what are these? You could use drones to light the street on an as need basis. Or better still, our phones could be replaced by flying phones or drone phones and light the path for us as we walk. Elegant, simple solution. No poles.

Value Creation leaders have to look at the entire range and spectrum of stakeholders.

Value waiting to happen, includes innovation

Value waiting to happen is innovation potential all around us, that we do not notice. The autonomous car is an example all of us could have guessed but failed to do or even think about. A few people did notice and created value from value waiting to happen.

So, transformation must take into account Value waiting to happen

3. Leaders must have Values

Values are an important part of Creating Value. Values (Value with an ‘s’). Value and Values are distinct. Values form an important part of Value creation and are our essential beliefs, our ethics and morals. Too many leaders and companies mistake corporate traits with values.

Traits include ambition, competency, individuality, equality,
service, responsibility, accuracy, respect, dedication, diversity,
improvement, enjoyment/fun, loyalty, innovativeness, excellence etc.

Items that fit into Values are integrity and honesty. So, leadership
training does not focus that highly on Values.

But the culture must reflect basic Values. Transformation must be based on
values.

4. Leaders of the future must transform through Value Creation

More than ever before, our basic beliefs will be shaken, and our fears of lack of control as technology takes over will require Business leaders who can create value and avoid value destruction during transformation. They will choose transformation that pollute the least that does not lead to losing control to technology, be it bio technology or AI. This requires changing the entire old way of thinking that Value Creation means creating profit.

In August 2019, the 300 CEOs of the largest US companies signed off on The Business Roundtable new purpose of a company, to create value for all stakeholders: Employees, Customers, Suppliers/Partners, Community/Society, Environment and Shareholders.

Davos in 2020, stated the same thing. So, there is to be a supposed seriousness of purpose to create value. But the problem is our training and MBA schools have taught us to create shareholder wealth, and even well-meaning leaders do not know where to start.

So, to start, you have to look at your Purpose. Ask:

What is your purpose and for your family or your friends? A study has found people with purpose live 15% longer.

Is my Business purpose, to make money for stakeholders or to leave a happier world?

Since leaders can also be shareholders, should they look at creating happiness.

93% of 2000 leaders surveyed could not state why their company is in business. This means that many purpose statements do not have a proper sense of purpose. Are yours one of them? But they want to transform!

At the very least your purpose should go beyond making money and increasing shareholder wealth.

This purpose will help you revise your vision and then your mission. And help you transform keeping your purpose in mind.

The purpose of the transformation should relate to the organisational purpose and make it more effective, otherwise transformation will be at odds with the purpose of the company.

Purpose to create value for stakeholders makes you ally with employees, customers and partners in learning from them and co-creating value with them. They become part of your succeeding.

Many of your employees prefer meaning to money. Should you too? Purpose improves employee participation and buy in. It creates value for employees by improving their well-being.

Helping employees with creating value for themselves and having a purpose. It engenders thinking about themselves and decide what matters in life. It builds on the self, a sense of freedom and thinking about others.

Today, I have defined Value Creation. It is about doing good. I spoke about Phil Kotler’s views on Marketing being Value Creation; You have learnt that the role of a leader is to create value. You are not taught to create value, and if you are doing this unconsciously, you could be destroying value unconsciously. Once you learn about value creation you can get to a value creation mindset, which will help you strategize and innovate better, and you will start to look at value waiting to happen and learn to look at value destruction potential to create even more value. Your business purpose is to create value for all stakeholders.

We need value creating leaders for the future. Create more Value.

Transformation must have an ultimate goal of improving the well-being of people, (employees and customers, partners and society).

How to transform

Start with purpose
Mindset change
Avoid Value destruction
Culture. Transformation must contain values
Value
No one formula
Generically create value

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 CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant LogicCustomer Value Starvation can Kill
Come to the Fifth Global Conference on Creating Value, September 2-4, 2022 at Japan
Join the Creating Value Alliance at creatingvalue.co

Marketing must Prevent Customer Value Starvation to Increase Profits

Posted July 7, 2022 by Customer Value Foundation
Categories: Business & Management

The role of marketing is to create value for all stakeholders according to Phil Kotler. Stakeholders include the owners, customers, employees, partners, society and environment.

I want to talk about how marketing can create long term value and not short-term value focused on selling more. What is bothersome to me is that all of us have horror stories about our experience with our suppliers, be they banks, insurance companies, white good companies, laptop and mobile companies etc. The problems are payment related, information related (sometimes getting wrong information on the website), service related, complaint related, solving problems, understanding products and other difficulties. Why is this? Why isn’t this being corrected as a priority. How can companies be customer centric, give good experience and value if these problems persist?

One basic problem exists in many companies which is Customer Value Starvation reducing value to customers. And companies don’t even recognise this problem as they are too busy chasing high faluting ideas. This prevents them from focusing on those niggling issues that all of us consumers face.

To create value for shareholders, companies have to first create value for the other stakeholders. You cannot create value for shareholders if there are no stakeholders: particularly customers. You and your company live in a society, and have to pay heed for the good of society and the environment, and for employees and partners.

The process is that the company creates value for the customer to be profitable. This is where marketing comes in.

What is the value that the customer is looking for from the company? How does the company provide that? Is it on cost or benefits to the customer? What is more important to the customer? What can we make more important to the customer (decommodification)?

When we add value to the customer, he comes back and adds value to us: By buying, by buying more, by telling others, by re-buying.

Sounds simple. Why does it not work? Why do many customers remain unhappy? They cannot reach companies to get help, to hold their hands, to get proper information, or being serviced well, by service people or pickup people or delivery people (who come without appointments), for not being able to complain or having your complaints listened to, attended to.

How many customers have the same problem? Why does the company not solve these problems?

Here lies the major issue.

Generally, these problems seem trivial to the top management, because they are so busy tackling far bigger issues, market expansion, a new plant, financing etc etc. They ignore Customer Value Starvation.

The people who have to deal with these ‘trivial’ (not so trivial in my opinion) problems are low level or front-line staff often poorly trained or poorly equipped and with no authority to really solve these problems. And the problems prevail. They never get solved and will cause others a problem.

Ask yourself how many seemingly trivial problems your supplier causes you, and how much time it takes to do this. This is a waste of time for the customer. Just as much, it uses enormous time of company reps, and costs them money.

Take some examples.

I am trying to get an additional credit card. The link the company sends me does not work, and I cannot tell anyone that it does not work, because their staff cannot understand and keep insisting the link works….so where am I left? Suspended? I try to get an additional credit card through Citibank. The website does not work properly and I cannot download or fill a form. Whom do I complain to? I ask my relationship manager. She says get a form from the branch, fill it. After visiting the branch, I fill it and send it to the branch, with photocopies of address proof and tax information. I am told I have to come to the branch again to prove I am legit, even though I have an account there. Moreover, she could have told me to do this on the net. Being a senior citizen does not help me with the bank.

A friend tried to renew a SendinBlue mass mailing account. It did not accept his Amex or Citi card. His associate also tried to renew the account through his debit card. Same problem. We tell SendinBlue about this. They raise a ticket. The answer is check with your bank. We are perfect.
Finally got through to someone who could listen and she had our account re-set, and we could pay right away (was this magic)? Why is the customer always wrong?

I wrote an article about my experience with Air India https://www.businessworld.in/article/Air-India-Whither-Goest-Thou-Tata-How-To-Create-Value-/05-06-2022-431459/

I gave many ways to improve. Not an iota of response. However, I also spoke about seats not working. Unbeknown to me, because not working seats were sold, business class customers were relegated to economy. The regulator found out and fined Air India who then got serious about this problem. Why not of their own volition?

Here are my questions. Why doesn’t anyone care? Why do they duck the problems? Why isn’t there a mechanism to correct these problems and improve customer value? What is preventing it? Do the companies think this is not important? Do they feel it does not matter?

Too many marketers and the CEOs opt for new, seemingly good ideas of improving things, in providing delight, fostering loyalty but they forget the basics. Get the basics right and everything will fall into place. You customers will not complain. Your complaint handling costs will go down and your customer retention will go up. (this equates to more profits!)

So, my next question is, who is responsible for solving these problems. The answer is no one. This is where marketing should step in. Isn’t the role of marketing to create value. Why don’t they take over and stop these fundamental, niggling problems that cause grief to customers?

 Here are some ideas:

  1. Appoint a problem noter and a problem solver particularly on what the customer sees. For example, does the website work, is the information accurate, is it easy to navigate? Do my links work? Why is the customer complaining? Can I check if his problem is genuine? How can I solve it?
  2. 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, like I am trying to do.
  3. What causes staff to get frustrated? Use Customer Centric Circles to solve employee problems, and you will solve many customer problems also. These Circle are discussed in 5. below
  4. Do not run companies with functional thinking but with a heart. Most customers will accept problems if they are brought into the loop. Use co-creation and co-operation to do this.
  5. Be serious about eliminating Customer Value Starvation and simple, niggling problems
  6. And to change attitudes of the front-line staff, use the Customer Centric Circles approach as told in my book Total Customer Value Management. This gets the front-line people to take responsibility and help them influence senior management to change systems and procedures for the benefit of the customer and to streamline things for the customer, and make operations more efficient.

 We demonstrated this at Godrej pest control, and

  1. Service calls by service people went up from 3 to 4 per day,
  2. Sales went up by 30% because of better coordination and faster response, thereby increasing customer value.
  3. Less pressure on price
  4. Incorporated a courtesy system to be courteous internally and externally
  5. Achieved better team work and cooperation
  6. Call officers achieved a 30% increase in referrals. Call officers better at handling irate customers
  7. Better feedback of customers by the technicians
  8. Inspection reports are better making it easier for technicians to follow up
  9. Less irritation of customers
  10. More involvement of top managers.

You can see the great value of Customer Centric Circles from the results shown above. These are documented in my book, Total Customer Value Management.

Next you can help employees and front-line people to become more aware and incorporate the 7A’s in their work. Don’t try to get to customer delight on day 1 that may impact only a few customers. That will come with time. However, get the basics right and you will reach the top. Work on this! The 7A’s are:

Awareness: Leaders and executives and frontline people must be aware of things around them, they must be curious, they must want to know more, they should notice more.

If executives do not notice the staff not wearing masks or poor air conditioning, how can you change the situation?

Attitude: Your people must have a super attitude, positive, forward thinking and multi-dimensional. Able to be strategic and innovative to practical. Some executives are functional in thinking, and this needs to change. Mind-set plays a major role.

If you promise, your attitude must make sure you follow through.

If you do not try to get things rectified, then problems get larger. If you do not notice (awareness) or do not care (attitude) how can things be rectified?

We have run customer centric circles to get front line people and staff to take charge and talk about problems and solutions. Attitudes change as people become aware of what they are doing wrong and what they should eb dong, Customer Circles have worked at Tata’s, Birla’s, L&T, Godrej etc.

Ability: Much of this is innate, but some comes from learning and experience. A great mind-set helps here. Ability is important to be caring, for wanting to help customers.

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.

You will be on your path to reduce Customer Value Starvation.

Customer Value Starvation can Kill is a book I have written with Walter Vieira to make marketers understand and prevent Customer Value Starvation. 

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 CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant LogicCustomer Value Starvation can Kill
Come to the Fifth Global Conference on Creating Value, September 2-4, 2022 at Japan
Join the Creating Value Alliance at creatingvalue.co

AIR INDIA, WHITHER GOEST THOU AND TATA: How to Create Value

Posted June 20, 2022 by Customer Value Foundation
Categories: Business & Management


By Gautam Mahajan, gautam.mahajan@gmail.com

My first trip with Indian Airlines was around 1954 in a Dakota DC3, and with Air India in 1968, on the much-heralded Boeing 707.

Since then, I have been an Air India fan and a loyal customer. Not to say I did not have some bad experiences, but many more were good. For instance, there was the time we were held up in Paris for a day to change engines and Air India took wonderful care of us (got us wonderful rooms, transportation, meals, had good updates on the plane departure) or the time the stewardess sat with my wife who was traveling alone because our small child would not stop crying. Or the time Indian Airlines staff took care of passengers stranded in Mumbai because of the rains on 26 July 2005. I wrote about this, and the article appeared in 26 newspapers. I wrote to the Managing Director, suggesting he congratulate the staff, but got no reply!

I would defend Air India to my friends as being a great airline even though they would cite poor experiences. Till now: my flight AI173, Delhi to San Francisco, nonstop, a few days ago in May 2022 on Business Class changed all this.

It began with the booking process. The Air India website would show all business class flights to San Francisco were full or not available. Why? I called someone in AI reservations whom I knew, and she said the website was not fully ok and advised me to get to a travel agent who have access to different websites. Through a travel agent, I bought a business class ticket. He had to go to the Air India office twice to assign seats because the system was down.

But this was the beginning of my problems. At the airport, when I checked in, I was asked for information I had filled in during my on-line check-in (By the way the mobile check in was more complex. It wanted me to upload my passport etc. Why?). That was a waste of my time and now also a waste of time for the ground staff. I asked the airline representative to make a note of this issue and let the powers that be know. I knew she would not (because this is typical, the front-line staff and their supervisors are not trained to escalate systemic problems), and so I asked for the supervisor. No response! Just ignored the request. At check-in, I requested a change of seats and was told the flight was full. As she was handing me the boarding cards, she suddenly stated seat 14A was non operative and she would get me two seats together. Since she had earlier said it was a full flight, I asked how? She said we would get a window and an aisle and not 2 of the 3 middle seats, which was fine by me. But all this would happen at the boarding gate, she said. Another woman came and said she promised this and that she would be at the gate. She said her name was Aruna and she was in charge. A promise but no change in the boarding card.

When we got to the gate, there were two people there on the check-in. The young man was busy with a customer. The oldish woman was sitting and ignored us. She finally got up and was leaving and I asked, “Do you work here?” She said “Yes”, and tried to brush me off by saying boarding will start soon. I asked if she was too senior to take care of me. Then I told her my issue, and she checked and we had 8E and 8F, middle seats and an aisle. I asked for a window and an aisle, but the young man said 7 or 8 seats were non-functional. Can you imagine 8 seats at 2 lakhs each or 43 crores over a year if the plane flew 300 days! Not to worry, the plane will get re-furbished soon, said the older woman.

The ground staff did not tell us that 8D which was next to our newly assigned seats, was non operative and therefore that seat was empty. They then requested an elderly Sardar and his wife to switch with us and gave us 8G and H. Which was fine except that 8E broke down when the Sardarji was lying on it and was not able to get out of the seat that was now in a prone position for sleeping. He needed a number of crew members to help him off the seat…. So much for the maintenance. As my son who calls Air India Air Village said, if the flight is so poorly maintained, how can they manage and maintain systems?

Also, my TV screen and the remote was not working—so much for on board entertainment!

During breakfast and lunch my food tray would open at an angle, and never straighten.

Before all this, my wife and I had gone to the AI lounge, and all the food staff were not wearing masks, and I asked them to, but they ignored me. The ground staff should have noticed this but they did not. The air conditioning was not working. Why did the staff not notice? Or do they care or do they accept all this. Is this a chalta hai attitude?

The staff on the plane were excellent.

Now, as the Tatas take over AI, I have several suggestions keeping customer value in mind: I work in the area of customer value and creating value. We have a value school at Kobe University in Japan, one at the Japan Advanced Institute of Science and Technology, a Value Research Centre at the Doshisha University; a Value Creation Centre at Aalborg, Denmark and one at the University of Maryland. I am Founder Editor of the Journal of Creating Value with Phil Kotler, Steve Vargo, Jag Sheth and Tata’s Mukundan on the Board. We have done customer value work for Tata Power, Tata Fertiliser, Tata Chemicals, SAIL, Birlas, ITC etc.

I mention this to show the world is embracing value. I believe in co-creation and co-operation (two people working or operating together to get a mutually value creating solution).

Also, I suggest my 7A’s for Creating Value for Air India:

7As for executives holds for leaders also:

Awareness: Leaders and executives and frontline people must be aware of things around them, they must be curious, they must want to know more.
If executives do not notice the staff not wearing masks or poor air conditioning, how can you change the situation?

Attitude: Your people must have a super attitude, positive, forward thinking and multi-dimensional. Able to be strategic and innovative to practical. Some executives are functional in thinking, and this needs to change. Mind-set plays a major role.
If you promise, your attitude must make sure you follow through, which Aruna did not. Or you must have the wonderful attitude of the in-flight crew.
If you do not try to get things rectified, then problems get larger. If you do not notice (awareness) or do not care (attitude) how can things be rectified?
We have run customer centric circles to get front line people and staff to take charge and talk about problems and solutions. Attitudes change as people become aware of what they are doing wrong and what they should be doing, Customer Circles have worked at Tatas, Birla’s, L&T etc.

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

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

There was great hope for Tatas at AI. Please do not let things get out of hand. Work on the problems

1. Appoint a problem noter and a problem solver particularly on what the customer sees. For example, does the check in work and is it synchronised with what the check-in counter gets? 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, like I am trying to do. 

2. What causes staff to get frustrated? Use Customer Centric Circles to solve their problems, and you will solve many customer problems also. 

3. 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.

4. See how you can sell faulty seats with discounts (so the customer knows what he is getting into). How can you have full planes? How do you make sure everything works? Prioritise engineering, safety, good planes that take-off and land, and happy passengers when they take off and when they land. I am sure Tatas are trying all these.

5. And for attitudes of the ground staff, get this changed. Use Customer Centric Circles approach as told in my book Total Customer Value Management. 

Get people to be aware and get the 7As. Don’t try to get to customer delight on day 1 that may impact only a few customers. That will come with time. However, get the basics right and you will reach the top. Work on this!

As my son said to me, imagine if you were flying cattle class.

Post Note:
I returned on Air India from San Francisco to Delhi on the 13th June. The flight and ground service was good. Happy to report all business class seats were occupied, which meant the seats were working. Tatas and Air India can do it. More power to them!

I am traveling to Tokyo by Air India (I must like them) for the 5th Global Conference on Creating Value in Kanazawa, Japan on September 2-4, 2022.Do register and come and join us for this great event. See https://smartconf.jp/content/gccv5th

You can reach the author at Mahajan@CustomerValueFoundation.com for your comments. 

Best, 
 Gautam Mahajan, President, Customer Value FoundationFounder 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 CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant LogicCustomer Value Starvation can Kill
Come to the Fifth Global Conference on Creating Value, September 2-4, 2022 at Japan
Join the Creating Value Alliance at creatingvalue.co

The Ukraine War Showcases Value Destruction and Learning From It

Posted May 2, 2022 by Customer Value Foundation
Categories: Business & Management

Not one of us will disagree that there has been value destruction for countries, for people, for systems and so on during the Russia-Ukraine war.

Most of us look at the actual value destruction during the war. Very few look at the value destruction that led up to the war, and will continue after the war.

The value destruction was caused partly by:

  1. The desire of two super powers to become stronger
  2. The positioning and posturing before the war
  3. The lack of understanding of each other’s thoughts, needs and psyches. Above all a real desire to avoid war did not exist.

To avoid these wars, we have to look at the defensive (value creation) rather than the offensive and such posturing.

  • The desire of two super powers to become stronger

USA and Western Europe has been expanding into the hitherto Soviet territory or countries participating in the Warsaw pact (dissolved in 1991), and considered to be part of the Soviet Bloc. This included the Baltic states, Czechoslovak, Hungary, Poland, Rumania, Bulgaria, Albania and the Balkan states including Croatia and Montenegro, to name a few. Many, after the split up of the Soviet Union in December 1991, were recognised by the USA such as Russia, Ukraine, Belarus, Kazakhstan, Armenia and Kyrgyzstan. The Baltic states were the first to move away from Russia. Many have become members of NATO including Poland.

Wiki says: Several disputed states with varying degrees of recognition exist within the territory of the former Soviet Union: Transnistria in eastern Moldova, Abkhazia and South Ossetia in northern Georgia and Artsakh in southwestern Azerbaijan. Since 2014, the Donetsk People’s Republic and Luhansk People’s Republic in far eastern Ukraine have claimed independence. All of these unrecognized states except Artsakh depend on Russian armed support and financial aid. Artsakh is integrated to Armenia at a de-facto level, which also maintains close cooperation with Russia. Prior to its annexation to Russia in March 2014, which is not recognized by most countries, Crimea briefly declared itself an independent state.

NATO had 12 founding countries. Today there are 30 countries as part of NATO. New entrants are Hungary (1999), Czech Republic (1999), Poland (1999), Slovakia (2004), Romania (2004). Slovenia (2004), Bulgaria (2004), Estonia (2004), Latvia (2004), Lithuania (2004), Albania (2009), Croatia (2009), Montenegro (2017), North Macedonia (2020). Turkey (1952) was an early entrant. The growth of NATO occurred majorly after the collapse of the Soviet Bloc.

You can see why Russia would become nervous. The Baltic states bordered Russia. Hungary. Poland and Romania bordered Belarus or Ukraine. Ukraine could have become the next NATO country adding to the perceived threat to the Soviet Union.

Would USA tolerate Mexico joining a Russia coalition? A communist Cuba was perceived as a major threat to the US.

Russia, has therefore been trying to control Ukraine, who was leaning towards the West and even conquer it as it did Crimea. It continues its bullying tactics, as it fights with Georgia, and postures against Finland.

In fact, short of annexing Ukraine, Russia wants to close Ukraine’s access to seaports and have Eastern Ukraine move into Russia at the very least.

  • The positioning and posturing before the war

Both the West and Russia, tried to show their independence and that they could withstand non-war moves by the other. They flexed their muscles much like kids who say “my father is stronger than yours”. Zelensky has proved to be a hero in spite of causing pain and countless tragedies for his country via Putin, who in his desire to have an ascendant Soviet state has put aside concern for human suffering and other damage he is causing. He has caused havoc with the global system.

USA and the West challenged Putin to war, while pretending to seek peace and threatened with a widening NATO and sanctions. Putin had also joined the peace wagon while openly threatening Ukraine and telling them not to join NATO. Today, Putin is putting his own sanctions, cutting off gas supply to Poland and Bulgaria!

All this will change the world’s power balance and well-established precedents and systems in the world: the dollar, the trading system, the alignment and re alignment of nations, a change in energy supply, transportation, to name a few.

  • The lack of understanding of each other’s thoughts, needs and psyche.

This perhaps is the worst lapse. In spewing rhetoric, countries tend to believe their own words and beliefs (what I’d like to see), and even look at the other as they would like to think and ignore reality. Think tanks are most guilty of this. Honest assessments are parked as “never will happen” etc. I have seen this on China. Around 2000, I was on an Indo US think tank conference. The American kept saying China will never be a super power. They stated that China does not have their own technology and steals technology. It was so much wishful thinking. That is what they would have liked to see and therefore have started to believe.

The West, Ukraine and Russia did not truly want to prevent escalation. It is almost as a proxy war between NATO and Russia. USA has been planning something like this from 2014 when Hillary Clinton spent time in Ukraine (maybe all this emboldened Zelensky). Today, it appears that Ukraine may follow how Russia allowed Napoleon and Germany to enter, but eventually weakened them and threw them out.

Do read Never by Ken Follett to see how the fallout of not understanding each other can cause catastrophic results.

Therefore, do not view everything like a chess game, moves, countermoves, obfuscation, deceit etc. As I said earlier, to avoid these wars we have to look at the defensive (value creation) rather than the offensive and posturing. We have to go out of the way to understand the others psyche, pander to it and build a relationship. Avoiding war is creating value, and so we have to do this.

India can start with China and build a broader understanding with it and of each other, each other’s needs, the psyche, the imponderables such as the path to internal power (pandering to voters or ensuring the military remains in your control etc). Ensure more open dialogs, start Track II and other means to move forward so that reliable and credible channels are opened to prevent war.

Value has been created for Russia by doubling its fossil fuel revenues. Value has been created for China as more Americans view it as a competitor and not an enemy Can we prevent the primacy of greed, selfishness, power and money? Do we want a bipolar or a unipolar world? Do we want to destroy value or create value?

Best, 
 Gautam Mahajan, President, Customer Value FoundationFounder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
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