Archive for the ‘Business & Management’ category

Why Purpose Creates Value?

April 3, 2021

The purpose of a company is not used much by businesses. For that matter it is not used much by people for themselves.

Companies are satisfied by having a vision and a mission statement. These normally outline the business vision and mission. How are they going to create profit and be advantaged in the marketplace?

But they normally do not start with a purpose. Many of us humans and many businesses do not have a purpose in life other than to have a comfortable one with enough money. One is reminded of Alice in Wonderland asking the Cheshire Cat, which way she should go. To which the Cat asked where do you want to go, and Alice replied she really didn’t care. The Cheshire Cat answered it does not matter which way you go.

I am not suggesting meandering is all bad. Most of us meandered into what came our way. And managed to do well. Had we had a purpose, would we have done things differently? Would we have taken a different path? Would we have pursued other goals? Would we have been more successful, and happier?

Purpose helps you answer who you are, what you want to be, how you belong and how you can feel whole and get a sense of accomplishment.

An Uncle who always wanted to paint was forced into the family business and did well. When he retired, he started to paint again, and was so much happier, because he was doing what he had always wanted to do.

This is true of companies. Yes, they strategize. But their strategies must emanate from their purpose.

The purpose keeps you focused on why the company exists beyond the financial reason, if any. The purpose is about the company and the outside world and what the company stands for and what it will do for others. The mission and vision are more for internal guidance, though we try to use them externally, also. The purpose gives you an identity, and tells everyone who and what you are and what you stand for and believe.

Vision aligns you with the goals, and mission tells you how to accomplish them. Vision tells you what the future will look like for the company and where you will land up.

Purpose is in a sense why, vision is what, and mission is how.

Mission answers the question of how you will achieve the vision.

Note for employees and different stakeholders, purpose comes from three sources, the organisation, the work and type of work, and from the outside environment, from their family, friends and society.

Investors or a group of people starting something must ask the purpose or why they are establishing this new venture. They then answer what is the venture meant to be in the future and then how they get there.

So, for an entrepreneur, the purpose maybe to prove that my ideas are better than others, or that I can shake up the world or that I can do something different. Or people will get convenience from what I do. The idea may be to do service to the people, or to make the world a happier place.

What the idea is the vision and how to achieve it is the mission.

The purpose is there to inspire the stakeholders why you and your company matter, what your company stands for, what it believes in, why your company is important and why what you do has a meaning. This then links you to your values, and how you can create value for the stakeholders. This outlines your culture, and why your company should matter to the followers or stakeholders.

Purpose tells people what they are to do. It influences decisions and culture and behaviour.

Thus, the purpose of a food company could be to make food available to the poor, or to add nourishment. Another company may wish to reduce poverty among its stakeholders.

Or for another company, confronting climate risk may be the purpose.

Let us take easier examples:

An author may write: The purpose of this paper is to advance the knowledge in (this field). Or to show you my results.

The purpose of my visit to (this country) is to have a good time. Or to learn about the people. Or to understand business etc.

What you do in the visit and how you do it follows.

Ted Talk’s purpose is to spread ideas. What they will do and how follows.

Therefore, combine your passion and ambitions to make a purpose.

The Business Roundtable and Davos have state that the purpose of a company is to create value for all stakeholders. This is a good starting point but is a catch all and has to be distilled down a little more. Sustainability, the environment and society have taken a legitimate place in the purpose.

You can see a good purpose in life, in a business, in a family, gives you a direction and a long-term goal, keeping you always focused. All this creates value for you and for your business. Businesses that have a commitment to purpose tend to get more loyal customers, better employees, have competitive advantage and increase their chances of success, and while focusing on the environment and society. Purpose guides life as it did for McArthur and Tiger Woods, has an impact on behaviour, gives a focus on direction and goals and makes life meaningful and full of value.

A great purpose is ‘Work as a professional and live as a human being.’

Purpose creates value all round. Happy to hear your comments.

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/

Do Specialists Create More Value than Generalists? by Gautam Mahajan

March 7, 2021

On the face of it, it would seem that specialists add more value than generalists. But the facts are generalists generally do add more value than specialists.

Specialists tend to be good performers but not great value creators. A generalist is a better value creator. A generalist understands business better than a specialist and has many more areas of knowledge. Take two accountants at the same level, one a specialist and the other a generalist. Both perform well, and the specialist might understand accounting better. The generalist on the other hand may come to the boss and say we need to think differently with Brexit coming around the corner. He is adding more value.

Even more interesting is that the specialised and experienced accountants have more difficulty adjusting to new accounting laws than novices. This is true of expert chess players where rules are changed versus for beginner players.

David Epstein in ‘Range’ says highly specialised experts can become arrow minded and may become worse with experience (which makes them more confident) as they tend to become single minded. He goes on to say specialist cardiologists are likely to put in stents more often than necessary and you may be better off with a generalist in cases where stents are not required, to avoid insertion of unnecessary stents.

There are more specialists though in the US than general physicians and this is due to better income levels of specialists.

Epstein talks about a study on Nobel Laureates. He states these people have hobbies like dancing or singing or gardening, which instead of dissipating their deep knowledge, strengthens it. Experts that do not make it to the Nobel are single minded in their work and specialisation.

Being a generalist gives you a better chance in a variety of markets. (In my case, early on in my career, I found companies were interested in my specialist skills rather than my generalist outlook). Later on, in their career, generalists have ‘career flexibility’ than early on. HR people miss this when they try to match someone’s background to a job. Learning and unlearning is becoming an important trait in the future.

On the corporate front, as the world becomes increasingly interconnected, organizations are valuing generalists for their ability to multi-task, see the bigger picture, and work with different departments to solve issues. Generalists also have more transferable skills – a critical aspect in ensuring business scalability.

The biggest disadvantage of being a generalist, however, is the trade-off between depth and breadth. Having knowledge of several things prevents one from mastering a single discipline to the best extent possible. This could make generalists more replaceable and increases job insecurity.

Generalists in today’s digital economy have to rely on specialists for data and analysis, but they (generalists) are able to make much better decisions.

Does when you start specialising impact your success and value creation? Many people have researched this and have found whether you start specialising early on (like Tiger Woods and golf) or much later (as Roger Federer and tennis), you are likely to succeed. Similarly, length of specialisation does not matter, and the generalised experience before specialising is very useful.

Learning, according to this is better to be done slowly, even if it means poor test scores (according to Epstein). These people are smarter eventually in what they have learnt.

So, we have to ask how rote education rates with flexible education. Closed skills are acquired fast, whereas open skills are also required. Thus knowledge, experience, early agility, mental exercising are all important in education. So, in colleges perhaps open teaching is better, to think beyond experiential learning. Self-education techniques are worthwhile.

Doctors during training rotate and get a generalised training before specialising.

The best innovators are those who can use analogies from their different domain experiences, and splice together and synthesise, through their diverse knowledge.

There is much to be said about being an outsider and having a breadth of knowledge in innovating and in solving tricky problems. Many generalists have solved problems using knowledge from some other field in the problem. Generalists do not get bogged down by details that specialists tend to.

In innovating meetings, I would always tell people to look at solutions and say they will never work or they are too expensive. Better to see how to make them work or reduce the cost (Costs come down as products become popular and are sold in larger quantities).

Thus, should we look for a specialist or a generalist (this is a general question and not a specific one)? Or Generalizing-Specialists and Specializing-Generalists? That is a specialist who develops a wider range of interest is more valuable. Also, there is a risk of specialisation, and that is you can become outdated, or your skills are no longer current.

A specialising generalist is one who is a generalist but has a strong specialisation. I have always maintained you must be very strong in one area or more to become a generalist and to succeed. No one can take away your specialised knowledge. You will always be able to rely on your specialisation past to deal with other specialists, and to have a discipline of thinking. Be a specialist in your skills.

In our own field, we find most CX (Customer Experience) experts cannot see beyond experience and miss what Customer Value people can see more generically!

So, who creates more value? So, therefore, let us define value:

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.

Value waiting to happen is ideas in front of us we do not notice, like porcupine quill design to suture wounds or using gecko-based adhesives to close cuts. These were not discovered by experts but by generalists who thought cross functional. Many new entrepreneur unicorns are new to the subject and used lateral thinking.

There is no formula that can tell us whether it is the specialist who creates more value or the generalist. It depends on their way of looking at things, their breadth and interests, their way of thinking. In the long run it appears generalists create more value than specialists.

Generalist-specialists or specialist-generalists may be the best in creating value.

What do you think?

Best,

Gautam Mahajan, President, Customer Value FoundationFounder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
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
Come to the Third Global Conference on Creating Value, June 2-3, 2020 in Paris France
Join the Creating Value Alliance at creatingvalue.co

Will Customer Value Creation improve healthcare?

February 25, 2021

By Gautam Mahajan and Edward R Pinto MD, FACC

This article is written jointly with a close friend, Dr Edward Pinto, who is a physician in the US.

Gautam spoke on the 28th January 2021 to software leaders and CEOs on Creating Value through Quality. Eddie (Edward Pinto) picked this up from YouTube https://tinyurl.com/y2vzjjya.

After listening to Gautam’s talk, Eddie called Gautam and bemoaned the fact that the US healthcare field was not focusing on customers. The health care services were mediocre, in spite of the US spending 16.9% of their GDP on healthcare. University medical schools which were rated in the top 10% of hospitals in the US in the seventies and eighties have much lower rankings today. They continue to have the best facilities and doctors, but have lost their focus on customers, and their healthcare services were middling.

If these hospitals were to treat the customer as a king their rating would improve. The customer is the patient!

No one in medicine has really thought of value creation in medicine except some of the top ranked hospitals like Mayo and Cleveland clinics. This is therefore an opportune time to write this article as we emerge from the Corona pandemic. Value creation is understood in business (though not entirely), but not talked about seriously in medicine where the business-oriented MBA administrators are king! And make the rules!!

Let’s start with a definition of creating value, as written in the Journal of Creating Value, jcv.sagepub.com :

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, in essence you have to improve the well being or do good for a patient. The worth of your medical service must be better and higher than others, so that patients feel they get more than they paid. Thus, in a business sense value is what you pay and what you get. It has a benefit component and a cost one. Cost includes effort, stress, anxiety, energy, psychic factors, self-image and time. So, pay attention to these. The problem is that feedback from the patient is rare when they are becoming well and is only available when their health is not improving!

Also, value waiting to happen is value you could create but do not notice it. Think of ways to improve value to patients, whether it means being nice to them, or listening to them, or avoiding unnecessary tests and surgery, or reducing wait time. Telemedicine is value waiting to happen in a big way.

In the US, we no longer have private practice; Corporate medicine has taken over, with a ‘complain and you lose your job’ mantra.

The first of many problems of the healthcare system, particularly in the USA is to figure out who the patient is. The healthcare provider, if it is a hospital has to consider administrators, doctors, patients, staff and nurses and of course the investor as customers. In doing this, the health care provider forgets who the real customer is. Without patients there would be no need for healthcare providers, no need for administrators or staff. Health care providers also must understand what customer value is. Customer value is not just the worth of the service (what you get and what you pay), but being superior to other providers. So, working on improving Customer Value is very important. And this means being a caring provider. Superior care and the patients feeling of valued care is a win-win for all. This is lacking in some medical centres.

Of course, the healthcare provider cannot forget other stakeholders such as the doctors, nurses and staff, and have to also create value for them. Value added stakeholders will create better value for patients.

Unfortunately, like education, medical care has become a business, to be run efficiently and with an eye to make money. MBAs are now administering hospitals, for improved profits. Gautam has always maintained that MBAs are not taught to create value for all stakeholders but to be good (?) administrators and efficiency experts. The MBA students have to understand that their role is to create value and they must be taught how to do so. This change of thinking has to come in healthcare management, where value creation is essential.

Remember, in the USA salary is tied to RVU’s or the number of patients seen in an hour and the dollars billed. This pressure is exerted by administrators, MBAs or doctor MBAs who have seldom seen a patient medically. They want doctors to see more and more patients and increase their billings to enrich the institution on the backs of providers of healthcare such as doctors, nurses and patients. Not a great situation for value creation in health care which is fast becoming an assembly line!!

Shep Hyken in a recent article The Problem isn’t the Employee it’s the system says it all in this cartoon:

Caring of patients, making them feel wanted and cared for and important is key to success. Eddie recounted how he would call the 5 of many patients he had seen during the day at around 8pm. The five were the ones who seemed the most worried about their health. Eddie would call these anxious sick patients in the evening to check on their health. They appreciated the call and sometimes would give feedback to get Eddie to think of different and/or better treatment. Treat them well and they will be with you because they are happy…not just because they are being treated medically.

In the Journal of Creating Value, 3-1, Saradhi Motamarri wrote about Consumer Co-Creation in mHealth Service: The role of a patient is rapidly altering from a passive consumer to an active participant and integrator of multiple actors in his or her service network.

We ourselves have witnessed that when as a patient we feel assured, we feel comfortable, we feel cared for; we feel better, and less worried. The fact we can talk to our doctor makes us more assured. People talk about the psychological care of patients, taking care of his psyche.

As we reflect on what we need as patients, we want a caring doctor who has the time to discuss with us and explain what he is doing, a medical system where we are treated well, not just medically but as a human being.

Gautam remembers that he had a serious problem in San Francisco, and found the emergency care at the hospital wanting. He found a private practice doctor who was amazing in making Gautam feel comfortable and able to deal with his problem. He knew Gautam was visiting from India, and gave him a care kit free to carry back with him just in case he needed it. Gautam keeps remembering the doctor’s kindness and thinks of him as competent.

Most primary care physicians (PCP) know their customers, and have a good bedside manner. They will go out of their way to get their patient an appointment with a specialist or a room in the hospital. Most specialists tend to more brusque and even fewer take a holistic view of the patient as they focus basically on their specialised area. A good PCP takes a view on all the conditions and the anxiety of the patient, and the various medicines and how thy might interact with each other. Gautam’s mother-in-law acquired a new PCP at the age of 90. The first thing he did was to unprescribe a number of medicines various specialists had asked her to take. He said she was getting a cocktail of medicines many of which she did not need at this age. He left her with 2 or 3 medicines, and she improved.

In the USA and maybe now in India, often the PCP no longer follows the patient in the hospital but takes over upon discharge. This disjointed care makes the patient feel insecure and therefore some hand-holding and more explanation to sick hospitalized patients is important.

Unfortunately, this is sorely lacking even in the best hospitals. The university and major hospitals that have done this better are moving to the top in the rankings. Again, Value co-creation with the patient as No. 1.

It seems that best doctors are good in communication and even better listeners. These doctors are well organized, know the customer and are conscientious. They make customers feel they are cared for. Such doctors are aware (and curious). They embody Gautam’s 6As, awareness (curiosity), ability, attitude, anticipation, agility and ambidextrousness to create value. In the patient’s thinking. Eddie says it is 3As, availability, affability and ability in that order.

The principles of person-centred care are:

  • Treat people with dignity, compassion, and respect.
  • Provide coordinated care, support, and treatment.
  • Offer personalised care, support, and treatment.

Value Based Health Care (VBHC) puts the patients, their families, doctors and their teams at focus. Patients with similar medical conditions have different preferences and they each follow roughly similar care-paths. Care quality improves by gauging the correct patient-relevant outcome measures. VBHC is an effort to develop and deploy products, services, and integrated solutions that improve patient outcomes per dollar spent in the healthcare system, measuring value in terms of long-term patient outcomes rather than short-term transactions.

Nurses operate on six core values which are commonly known as the 6 C’s. These are Care, Compassion, Competence, Communication, Courage and Commitment. Nurses who operate on these values ensure that the job gets done in an effective and efficient manner and that patients are safe and treated well. All those who work at a hospital or a clinic are responsible for value creation for the patient which translates into the kind of outcome and care given.

With an aging population, healthcare will have to focus on their needs more effectively. Separate facilities for geriatric and other vulnerable categories of patients become essential.

Here are things we think patients want

Let us learn to create value for patients, and for the other providers in the system, the administrators, doctors, the nurses, the support system, the staff, the investors. This comes back to the Business Roundtable, consisting of CEOs of the 3000 largest American companies, saying that the purpose of a company is to create value for all stakeholders. The medical system is slowly adjusting and changing to do this with new use of technology, telemedicine, virtual consultations and renewed focus on the customer.

The Corona pandemic has been a big strain on healthcare. Patients are also learning they can do with less handholding.

In India, the doctor and hospital visits have dwindled during this period of the pandemic. Is it because of fear of Covid, over doctorisation or what? It could also be more online consultation. Most doctors we know had a reduced practice to 30%.

Major medical centres are hurriedly appointing smart published researchers to head their departments in the hope of improving their rankings. Often these great researchers are poor candidates to enhance patient care and customer value creation. Parallel appointments of good clinically smart doctors who will enhance the delivery of customer value care is a must!

Value Creating healthcare facilities must become the dream, a dream which is achievable. These will be a boon/gift for all in healthcare. The customer in healthcare, the patient must come first.

The time has come for true healthcare people to disrupt the system into a different, more customer oriented one that makes money for all concerned

We would love your comments.

https://customervaluefoundation.wordpress.com/2021/02/25/will-customer-value-creation-improve-healthcare/

Gautam Mahajan (Gautam.Mahajan@gmail.com)  and Edward Pinto, MD, FACC (Pintomdd@gmail.com)

Best,

Gautam Mahajan, President, Customer Value Foundation

Founder Editor, Journal of Creating Value jcv.sagepub.com

New Delhi 110065 _91 9810060368

The Impact of Culture on Creating Value

February 16, 2021
Why is culture important?
Management gurus will tell you culture is important, because culture brings employees and partners in a company together through shared beliefs, traditions, and expectations and goals. The two basic types of culture are material culture, physical things produced by a society; and non-material culture, intangible objects produced by a society.

Culture can be one of Empowering, Innovation, Sales Culture, Customer-Centric Culture, and Culture of Leadership Excellence and of Safety. There are other types like a blame culture, blameless culture, a just culture and so on.

Value Creation and culture.
I want to talk about a Value Creation culture that avoids value destruction (like blaming each other or creating silos and not working together, not taking care of partners and customers etc.).

More importantly, the Business Roundtable announced in 2019 that the purpose of a company is to create value. Davos echoed this in 2020. Now many companies around the world want to create value for stakeholders. A great goal, but how are they going to do this? The word value has been used loosely in their vocabulary, and value creation (except in the form of profits) has not been a serious goal.

So, I repeat, how are they going to do this? One is to incorporate a culture of value creation:
1. Understand what value and Creating value means
2. Realise what stakeholders want as value
3. Learn to measure value for each of the stakeholders
4. Find ways of creating and delivering value and extracting a meaningful share. 

What we want is a culture to create stakeholder value, and specifically for employees, customers, partners, shareholders, nature and society, and measure these. Do we create more value for the stakeholders, or do they create more value for the companies? This is important. Generally, companies survive when stakeholders create more value for the company than the company does for them.

The culture of creating value has to start with the leader who builds a creating value eco-system. The amount of value the company creates for stakeholders (minus the value they destroy) is a measure of leadership.

Leaders and their companies must create more value than they extract. Creation must always go ahead of extraction. Creating Social and Environmental value and a reserve of social/environmental value is like banking cash for the future.

In this article I do not want to focus on how to create culture, but to get all of you to understand and establish a culture of value creation for which companies must have:

A Stakeholder culture that is a desire to create value for them
This requires a customer and a stakeholder strategy that then moulds and generates your corporate strategy.

Thus, if your shareholders prefer growing the existing business through various sub businesses, your corporate strategy should reflect that. If your customer strategy suggests affordability and risk averseness of customers, your corporate strategy must take that into account.

The stakeholder value creation thrust must come from the CEO.

Teaching employees and CXOs that the role of an executive is to create value and not just to perform a job. That is, your people must go beyond their jobs to create value. That value must be created consciously and not unconsciously. Focus also on reducing value destruction. Teach them how to create value. The chart below shows the relationship between value and culture and make the best value and culture happen.

This chart shows how value creation and culture must go hand in hand, and the culture must lead to value creation, otherwise the culture has not so great an impact. 
As always, I await 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
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
Come to the Third Global Conference on Creating Value, June 2-3, 2020 in Paris France
Join the Creating Value Alliance at creatingvalue.co

Hope, The Value Creator for 2021?

January 12, 2021

Can hope Create Value?

As we enter 2021, the world is suffused with hope of a normal (some prefer the old normal, while others pray for a new normal). There are also the vaccines which could contain the virus. In all cases, there is great hope,

“Hope’s highest manifestation is the perseverance of the soul who has seen a better day, who has a tangible sense of what satisfied feels like, who knows that the reality of their today dims into a pale insignificance when compared to the radiant, the incandescent promise of tomorrow.” — Wayne Abel, The New Hope Times

Hope gives you the perception of increased wellbeing in the future or increased value in the future.

In the short term, hope makes you feel better and, in that sense, create some value for you.

These are desperate times. The Covid crisis is showing no signs of easing, though the vaccines may help contain it.

I have chosen to quote individuals and experts verbatim to show what they say about hope.

We live in a time of hope and a better future. Hope encompasses all parts of our thinking and psyche:

Fairer elections, I will win, better health the hope of becoming well, of passing an exam, of getting a job.

Why do such emotions as hope, optimism, and a positive outlook seem to benefit health? Perhaps scientists and doctors do not yet understand the human mind and body well enough to provide definitive answers. Still, experts who study the subject can make educated guesses. For instance, one professor of neurology suggests: “It feels good to be happy and hopeful. It’s an enjoyable state that produces very little stress, and the body thrives in those conditions. It’s one more thing that people can do for themselves to try to stay healthy.”

Gloria Ogunbadejo says, “Hope is a powerful therapy. There have been various studies carried out to determine the value of emotional support given to terminally ill patients. Presumably, this type of support helps people to maintain a more hopeful and positive outlook. One 1989 study found that patients who received such support survived longer. Recently, studies in the UK and US have confirmed that patients who receive emotional support suffer less depression and less pain than those without it.”

There’s a huge debate about what is best between realism, optimism and pessimism.

What we know for certain, however, is that hope benefits our health and happiness. Research proves how important hope is in life. Hope prevents you from becoming despondent and negative.

The opposite of hope is hopelessness. And this is a serious threat to health and happiness.

If there was no chance or a hope then there would be no point of even trying.

Is hope, therefore, a value creator? It becomes a motivator. It makes us feel better and, in some cases, improves our wellbeing causing value to be created for us.

Without hope, our human endeavour would suffer.

Optimism is a good thing, but defensive hope makes us work hard on something when it might be time to prune back and face reality.

Tarun Kumar in Quora said:
To be hopeful is to look on the future positively, to see opportunity in challenges (rather than challenges in opportunities), to “look on the bright side of life.” Hope is the ability to see the possible good in future events, especially when those events are potentially negative.

Hope and more so blind hope do not mean everything will fall into your lap or that things will work out. Blind hope and false hope are to be avoided.

People often think that hopeful people are naive, even foolish, and that they believe good things will happen when in truth they never will.

Winston Churchill said, “When you’re going through hell, keep going”. Hope gives you the strength to keep going. Hope gives you motivation. The most hopeful people in the world are also the most motivated.

At the same time, you must be mindful of your expectations and challenge pessimism. Hope value translates into expectation as of the upswing of prices of homes.

Thus, we ask, is it important to be hopeful in life?

During youth, everyone is hopeful. Everyone hopes they would have a great life in the future. But as time goes by the future becomes present, and one comes to know what they are capable of doing in life. And if they are not satisfied with themselves by then, then the hope is replaced with frustration, insecurity, depression, helplessness.

Hope is not a substitute for knowledge. It’s an illusion which tries to wish for a satisfactory future and even makes a person dreamy. Hope is about not being in touch with reality and just wishful thinking.

Hope is okay when you are young, but later on, it should be garnished with reality.

Rajwinder Singh, lives in Ludhiana, Punjab, India and said on May 22, 2018

“Hope has lot of importance in our life. Without hope you can’t survive for even a minute. We are living life just because of a hope. We set alarms to awake up early morning, with a hope that there is a tomorrow and we would get up, the next morning. A man goes to work to earn money, to fulfil all the needs and wishes of his family, that’s hope that he would make them happy. Hope actually gives us a reason to do something. It acts like a stimulant for us. A student who just failed in his board exams, decided to commit suicide but he dropped the plan just, because he got a hope to pass next year” … (more)

Just think of a farmer who hopes for an adequate rainfall during monsoon so that he could sell his farm products in decent rates and feed his family. A student who hopes for better grades every year so that he/she can make their parents proud. A father who hopes for a better future for his kids. Even an actor no matter how successful he/she is, always hopes.

Researchers have found that optimists benefit in many ways from their positive outlook. They tend to perform better in school, at work, and even on the athletic field. For example, a study was made of a women’s track team. The coaches provided a thorough assessment of the women’s pure athletic abilities. At the same time, the women themselves were surveyed and their level of hope carefully assessed. As it turned out, the women’s measure of hope was a far more accurate predictor of their performance than were all the statistics evaluated by their coaches. Why does hope have such a powerful influence?

Such pessimistic thinking hampers people in many of life’s endeavours or even paralyses them into inaction. Pessimistic thinking and its effects can be very powerful in the same way hope can determine positive outcomes. In other words, if we habitually believe, as does the pessimist, that misfortune is our fault, is enduring, and will undermine everything we do, more of it will befall us than if we believe otherwise. It becomes self-fulfilling either way. Discouragement, with its negative thoughts, will sap you of the power to act.

What, though, can you do to fight pessimism and bring more optimism and hope into your life? Talent, skill, ability alone will not get you there. Sure, it helps. But a wealth of psychological research over the past few decades show loud and clear that it’s the psychological vehicles that really get you there. You can have the best engine in the world, but if you can’t be bothered to drive it, you won’t get anywhere.
Psychologists have proposed lots of different vehicles over the years. Some say grit, consciousness, self-efficacy, optimism, passion, inspiration, etc. They are all important. However, there is one that is particularly undervalued and underappreciated in psychology and society. That’s hope!

Scott Barry Kaufman in a blog (https://bit.ly/3hU2TQC.) says

“Hope allows people to approach problems with a mind-set and thinking of strategies suitable to success, thereby increasing the chances they will actually accomplish their goals. 

Those lacking hope, on the other hand, tend to adopt mastery goals. People with mastery goals choose easy tasks that don’t offer a challenge or opportunity for growth. When they fail, they quit. People with mastery goals act helplessly, and feel a lack of control over their environment. They don’t believe in their capacity to obtain the kind of future they want. They have no hope. 

However, if they lose hope, unless you can help them get it back, all is lost. Hope is an emotion that springs from the heart, not the brain. Hope lays dormant until its amazing strength is called upon.”

David Archer, MD in the Power of Hope (https://bit.ly/2LeQ9bi) says: Hope is the belief that circumstances will get better. It’s not a wish for things to get better. It is the actual belief, the knowledge that things will get better, no matter how big or small. It is the belief that at age 65, after a disaster where you’ve lost your home, car and possessions — everything material, that you still have your health and family, and that you can and you will start over. 

There is a need to focus on what you have to be thankful for, not on what you don’t have or what you have lost or what you want. Remind yourself of this every day. Is hope also faith? 

So, we can see hope is a powerful motivator and makes us try even difficult things. In this it is a powerful Value Creator. On the other hand, false hope can sometimes be a Value destroyer. 

Let us pray our hope comes true and that the Covid virus will be contained soon!

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
Come to the Third Global Conference on Creating Value, June 2-3, 2020 in Paris France
Join the Creating Value Alliance at creatingvalue.co

Creating Value in Manufacturing

January 8, 2021
I wrote some time ago that we have to go to JIT (Just in Time), and towards local manufacturing, avoiding long inventory and build shorter delivery and supply chains. This will create value and here is a way to do so.

First, do not always think of economies of scale, especially when you want local manufacture. Think of ways of making small quantities which can be sold economically to the local geography, maybe up to 1000km away and not 10,000 KMs! This can work on exports also, with the last mile done in the host country.

Also, when one thinks of cans, bottles, toothpaste tubes, we are also shipping air…and perhaps we can do some final manufacture on site. For example, instead of shipping tooth paste tubes, ship rolls of sheet to the toothpaste tube manufacturer. Or, make bottles on the site of the bottling plant. Some of this is being done but more is needed.

There could be special machines which are designed to be flexible such as in manufacture of furniture. Machines can be programmed to make a table, and next a chair and so on, rather than long runs of chairs, long runs of tables etc. This allows making furniture on demand, and not large-scale manufacturing which causes inventory build-up.

I remember in a study for SAIL, we found that manufacturing decided the runs, their lengths, the sequences, and the timing. This was to maximise manufacturing efficiency. Consequently, sales could not give exact dates of supply to the customer if the material was not in inventory. Customer projects were held up or delayed because sales could not give the customer a delivery date. Sales lamented that manufacturing would let them know when the runs started and not well in advance.

Such steel items can sometimes be made in smaller scales in mini mills.

Peter Diamandis quotes Christian Brecher, director of Germany’s Fraunhofer Institute for Production Technology, who said the “internet of production,” or industrial internet, is not as easy as the consumer internet because production is much more complex. He noted that Europe, Japan and some other parts of Asia have a lot of knowledge about manufacturing, with which “we can create customer value.” He said once data is merged with cutting-edge production technologies such as robotics, it will bring about a revolution in the manufacturing sector. Production knowledge exists but needs to be channelized, and soon there will be a knowledge explosion.

Peter Diamandis gives examples of 3D printing which is about to turn the entire retail industry on its head. The 3D printing market is already over $15 billion and growing fast.

Did you know that 3D printing can be used for clothes? 3 accountants wanted not normal clothes but something exciting to wear.

Together, they formed a company called the Ministry of Supply, a clothing company intent on borrowing space suit technology from NASA for a line of dress shirts.

They designed the “Apollo” dress shirt, which uses NASA’s “phase change materials” to control body heat and reduce perspiration and odour. It also adapts to the wearer’s shape, and stays tucked in and wrinkle-free all day. Their company, Ministry of Supply now makes high-performance smart clothing for both sexes, including a new line of intelligent jackets that respond to voice commands and learns to automatically heat to your desired temperature, says Diamandis.

And recently, they extended their high-tech approach to manufacturing. So now in less than 2 hours you can get customised dresses using a 4000-needle special machine with a dozen different yarns, the printer can create any combination of materials and colours desired, with zero waste.

Thanks to the smartphone, 3D-printed clothing can now be ordered from the ease of your living room.

Since fashion designer Danit Peleg’s 2015 introduction of the first line of 3D-printed clothing available via the web, many designers are now offering 3D-printed clothes.

Even sports shoe manufacturers are using this technology.

Now retailers are following this and you can order drones, spectacles, jewellery, and the like to their customers, and these customised items are delivered to the home.

But fashion is only part of the story, as 3D printing is now showing up all over retail.

AI integration is making the design and manufacture seamless, easier, faster and more available.

Can you imagine the end of traditional manufacturing, the end of traditional supply chains, the end of a large inventoried spare part market, more customised and user designed products with little or no waste?

And imagine a future with value creation, vehicles with fewer emissions, reusable packaging. Use your creative thinking to design the future and be successful. Remember for value creation you need the 6A’s
  • Awareness
  • Ability
  • Anticipation
  • Agility
  • Ambidextrousness and
  • Attitude

Happy Thanksgiving.

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
www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer ValueInvestment, How Creating Customer Value Makes you a Great Executive, The ValueImperative, Value Dominant Logic
Come to the Third Global Conference on Creating Value, June 2-3, 2020 in Paris France
Join the Creating Value Alliance at creatingvalue.co

Creating Value with Knowledge

January 8, 2021

To create more value for yourself, you need to create knowledge that enlightens you, makes you do tasks more easily and efficiently, makes you feel fulfilled. Some knowledge comes from experience, and sometimes from bad experiences or doing things wrong.

Sharing knowledge (and/or experience) which is meaningful to others creates value for others, and this process creates more value for you.

The process of building knowledge starts with:

Knowing you need knowledge

Seeking knowledge. Having awareness of knowledge around you. For India use its diaspora to get latest information on knowledge

Assimilating knowledge that comes your way

Storing such knowledge

Knowledge development. Raw knowledge may not be useful

Retrieving knowledge and sharing it

Enhancing knowledge.

Understanding and seeking relevant technology and have a process of dissemination and sharing

Knowing and measuring knowledge assets

Protecting knowledge

Teaching people how to use this knowledge.

For successful knowledge management you need people, processes, content and IT, and strategy to have proper knowledge flow. People need to know what is relevant for their needs and be able to access it. In due course, AI may become a useful tool for managing, assimilating, protecting and disseminating knowledge.

But a very important part of seeking knowledge is to understand what your present and future needs are and how to get to them. Getting knowledge which is dated may not be useful. Dated knowledge may give you some satisfaction, but if you want to be at the cutting edge or are an innovator, you need the latest information, and more importantly what will happen in the future. Therefore, you have to be knowledgeable of the future and make future knowledge bets.

My friend, Prof. Youji Kohda, Dean of Knowledge Science, Japan Advanced Institute of Science and Technology adds “In the age of AI, knowledge has come to be produced from data. This became a new source of knowledge. But the knowledge produced from data represents the needs of the past and may not represent the needs of the present or future.” At the same time, AI may get predictive capabilities.

Lastly, your real competitive advantage apart from how you use the knowledge is how you source it. Chinese are past masters at this. Their diaspora, and their scientists abroad form a long chain of knowledge gatherers. Many maybe unconscious of this.

Early on in my professional career required me to manage collection of data and systems design for which we used mini computers. We chose General Automation (GA) after gathering information because it had the best architecture, and did not buy Data General or Digital Equipment (DEC). Consequently, when we had used GA minis for data gathering and system design, GA went out of business. Much of our knowledge about GA turned out to be useless. Much knowledge we had gained through experimentation and system design was rendered useless. We had to buy DEC and re-start, but could use part of our past knowledge for DEC systems design. We could also avoid certain programming and other pitfalls.

Prof. Youji Kohda comments the lessons from this example could be a lesson related to “knowledge transfer” (from General Automation computer to DEC computer). He adds, “Generally speaking, knowledge transfer is difficult to accomplish but helpful to make things happen.” Knowledge transfer could be one source of competitive advantage.

For many companies, knowledge is a competitive advantage. We once sued a competitor and our former employee who had joined them not to work in competing areas. The competitor’s lawyers insisted we reveal what we thought was proprietary knowledge. The judge demurred. He said the plaintiff (us) does not have to prove they have knowledge to prevent you (the defendant) from using it. He said even knowledge on what not to do was valuable and proprietary. That is to say, when you are developing something (let’s say a product or a device) or doing R&D, you may go down the wrong path which is not usable in the final development of the product or the device. Here your mistakes can save valuable time and money for your competitors if they knew what you learnt not to do.

To protect knowledge and know how, you have to take all possible steps to protect this valuable asset. Then and only then will the law give you protection.

This leads to what Prof Kohda calls knowledge non-transfer, or the knowledge to prevent transfer of knowledge, and keeping a secret a secret! This becomes important in thinking about privacy, data and knowledge protection.

Knowledge is an important part of value creation. It creates value for you. You can create value for others. By sharing your knowledge, you can create value for others or co-create it. Hiding knowledge and keeping it away from others can also destroy value. Overly secretive people are guilty of this.

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
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
Come to the Third Global Conference on Creating Value, June 2-3, 2020 in Paris France
Join the Creating Value Alliance at creatingvalue.co

What Is the American Dream? Do We Need a New One with Covid-19?

January 8, 2021

Philip Kotler

Is the American Dream alive and well or has Covid-19 killed it? 

Is the American Dream for every American or just for prosperous Americans? 

What is the American Dream anyways? 

On July 4, 1776, Thomas Jefferson, Benjamin Franklin, John Adams and 53 other delegates signed the Declaration of Independence, to proclaim their separation from Great Britain. The Declaration declared: “We hope these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights that among these are Life, Liberty and the pursuit of Happiness.” 

Americans were entitled to Life, Liberty and the Pursuit of Happiness! Actually, this was the promise to the white propertied class. It was not for slaves, nor even for most women. 

The expression, “the American Dream,” did not come into being until 1931. James Thuslow Adams, an American historian, introduced the term and made it the theme of his new book, The Epic of America. He described the American Dream as “a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.” 

The American Dream expresses what drove so many foreign persons and families to emigrate to America. For Americans, it describes what drove so many Americans living in the East or South to pack up and move West in the wide-open plains and frontier extending all the way to California. 

If we asked a random group of Americans to define the American Dream, we would get quite different answers. Here are at least four popular versions of the American Dream:

  1. The American Dream is about finding an abundance of freedom and opportunity in America. We know that the Pilgrims left on the Mayflower to be free to practice their religious beliefs and to gain more opportunity than was available in Great Britain.
  2. The American Dream is about America providing the chance of going from “rags to riches,” to be a great success in America. Horatio Alger Jr, an American writer (1832-1899), wrote over 100 stories of poor young boys who managed through hope, hard work, and being moral to arrive at a higher station in life as a “self-made” man. Many Americans emphasize the dream of achieving great wealth in America. The Great Gatsby character in F. Scott Fitzgerald’s novel by the same name represented the American Dream.
  3. The American Dream is about getting a good job, working hard, and earning enough to buy a home and car and support a family with a Middle Class lifestyle. The Middle Class idea provided a good aspirational contrast to the working class lifestyle. Instead of working long and hard hours and barely making enough to buy food and pay rent, with little chance for advancement, persons would be very proud of moving up to the Middle Class lifestyle.
  4. The American Dream is about the freedom of every American to pursue his or her individual goals and to succeed to the person’s ability and not to be handicapped by discrimination based on gender, race, age, income, religion or origin. If such hurdles existed, the political and social task was to remove them.

Each of the foregoing views of the American Dream relied on a one-dimensional picture. The American Dream, however, is a much more multi-dimensional view of what makes Brand America so special or great. Ed Burghard, a successful executive in Ohio, decided to commission a sophisticated analysis of the American Dream. He proposed the idea to faculty at Xavier University in Cincinnati, Ohio. He hoped they would identify the main elements in the American Dream by conducting a statistically valid factor analysis. They could arrive at factors and form an American Dream Composite Index.  

The Xavier researchers examined all the literature on the American Dream, applied factor analysis, and identified 35 unique dimensions of the American Dream. They classified the 35 dimensions into five broad categories: Economic, Well-Being, Societal, Diversity, and Environment.  

The researchers then used the data to develop the American Dream Composite Index (ADCI). The ADCI takes into account all aspects of American life in its calculation. The ADCI measures the level of the American Dream that people have reached in different American cities and states. Those cities that are significantly higher in the index than the average city contain more people who feel that they have attained the American Dream. Persons unhappy with their present locations could know other locations that might be more fulfilling.

How Have Recent Events Impacted the American Dream

Americans have experienced new and difficult situations that have affected their optimism or pessimism. Consider the following events:

  1. The Rise of China. China is the major foreign power and competitor facing the United States. Since the 1970s, China has experienced a spectacular rise in its economy and technology. China has managed to produce the biggest reduction in the level of poverty of any nation. China’s major cities are dotted with impressive skyscrapers, major luxury stores and brands, and trains that travel nearly 200 miles an hour, and many impressive airports. China has delivered, in effect a new Chinese Dream to its billion people. Very few Americans, however, want to move to China. Its government is a dictatorship and freedom is limited. China does not diminish the American Dream; if anything, it makes the American Dream more appealing.
  2. The Digital Revolution. The digital revolution in many ways has expanded the American Dream for so many more people. Americans proudly carry a smart phone and many are looking forward to owning an electric car. Digital companies such as Facebook, Google, Amazon, Microsoft and others have produced new jobs and new millionaires and billionaires, keeping the American Dream alive. At the same time, some Americans are now seeing a potential nightmare in these companies. They have collected so much information about us as individuals and they use this information to manipulate our desires. We are losing our privacy. These huge companies have also damaged small businesses or have taken them over.
  3. The Great Recession (2008-2010). The Great Recession deeply damaged so many American lives. Many homeowners with mortgages found that they could not meet their payments when housing prices collapsed. Many Americans went bankrupt or abandoned their homes. They had bought their homes with minimum down payments thinking that housing prices would continue to rise. People lost their jobs. Many students could not afford college and their careers were smashed. Many families broke up as a result of the Great Recession.
  4. The Coronavirus Pandemic. This current pandemic has fallen hard on everyone. The U.S. has had over 8 million persons infected and over 200,000 deaths. The Covid-19 recession has led to an 8.4 percent unemployment rate. Essential businesses have continued to operate. However, many discretionary businesses – hotels, restaurants, bars, theatres – carried too much risk to stay open. Companies had to reconfigure their work force, with some employees being furloughed or laid off, others working at home. America recovering to full employment is likely to take a number of years. Most Americans have had their educational and career plans throttled. Dismay and despair is rampant. For many, Covid-19 fatally stabbed the American Dream.
  5. The Donald Trump Presidency. The American Dream assumes a society that shares core beliefs about goodwill toward others, honesty, and openness to the world. President Donald Trump, however, operated as a divider, not a unifier. He insulted many leaders and personages, separated immigrant mothers and children in an effort to reduce immigration, and broke many norms of leadership. Instead of making America Great Again, he decimated the dreams and hopes of the majority of Americans in his drive to coddle his 43 percent supporters.

Conclusion

Before the Covid-19 pandemic struck, a 2019 Gallup poll indicated that 70 percent of Americans still believed the American dream is achievable. By working hard and playing by the rules, one can achieve the American Dream.

We do not a similar poll for October 2020. My guess is that the majority of Americans still believe in the American Dream. When people stop believing in the American dream, two changes would happen. Fewer foreign persons would to immigrate to America and more Americans would chose to move abroad to another country.

  1. Are there signs that fewer immigrants want to come to America. All the evidence points to millions of foreign persons and families still wanting to move to America. If anything, the Trump administration has done everything possible to limit immigrant inflow. The old idea of “Give me your tired, your poor, your huddled masses yearning to breathe free,” is informally being replaced by “give me your rich and educated…” Many immigrants are motivated not by the American Dream but would be willing to accept menial work just to escape from oppressive and abusive regimes.
  2.  Are there signs of an increased number of Americans ready to leave America in search of a better life elsewhere? No, there have not been many Americans who are leaving America. However, there are a lot of Americans who are complaining that America today disappoints them. They don’t like the crowdedness of cities, or the corrupt behavior of government leaders, or other disappointments. They think they could lead a better life in Canada, Australia or the Scandinavian countries. Canada is seen very much like a better America with more social caring, better education and better health care. Australia strikes many Americans as offering an easier life with a lot of fun, sport and freedom. They see Sweden, Denmark, and Norway as offering almost free colleges, excellent and affordable health care system, and people who rank higher in happiness, well-being and educational level.

Clearly, the majority of Americans and many people abroad still believe in the American Dream. However, a repaired American Dream is called for! America’s citizens need to review what is missing and prepare to deliver much more widespread opportunity that is promised by the American Dream.

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
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
Come to the Third Global Conference on Creating Value, June 2-3, 2020 in Paris France
Join the Creating Value Alliance at creatingvalue.co

Are Firms Becoming More Human?

January 8, 2021

I am writing this article to help companies and executives to create value and prevent reduction of Customer Value in the future. All of you need to think about this as you plan for the future. 

First one must accept that firms are really human, though they often pretend not to be. This is based on a simple thought. They are run and manned by people. This feeling within firms that they are inanimate is a major reason for the culture being non-human centric.

With digitisation and automation, there is an upheaval now. Humans are being partly replaced by robots. AI is being used to answer day to day questions via chatbots. Many mundane jobs are now being replaced by machines, and so there will be fewer humans within the companies. Thus companies will have a greater reason to pretend to be less human. This of course, reduces Customer and Employee Value.

Customers, especially the younger ones are comfortable with net based interactions, including emails. Getting emails on your mobile a few years ago was a novelty. Today it is a necessity. The younger Customers are getting used to non-human companies and non-human interaction. They are comfortable with robots, and working on the net/mobile.

Some of the downside of automation and AI is loss of jobs and having to fire people. What will these jobless people do? They need to be re-trained to make them re-employable.

Those people left behind in companies that are reliant on automation and robots will need more service skills in an automated world. History has shown deep automation in industries like banking led to a crisis twenty years ago, because of job losses. Today, banks for example are making deep labor cuts in departments including customer facing people and also are letting go back end people. Those who are left have to be re-trained in new working ways and skills that are different from the past. Is this meant to add more Value? For whom? The company or the Customer? Guess who will lose?

Customers are expecting and getting used to more voice/data/net type of interaction and less face to face or direct interaction. This requires more humanness in the backend machines. Services have to be more personalised, and help the customer manage his portfolio, his home, his transportation. The demand for services will increase and that for goods will decrease as demographics change to a larger aging population.

Care giving services like caring for old people will need people, and in countries where population is decreasing this could be a problem. In companies, reduction of caring staff could lead to reduced Customer Value, though costs will reduce. Much better customer support will be needed with the people left after automation.

Will this reduce humanness, or reduce Customer Value? Well, there will have to be ‘creative destruction’ of jobs because new skills will be needed with automation of routine processes and backend work, Very well designed customer support will be required. So all of us looking of the future must pay heed to this.

A positive could be, for example, customised products including mortgage products, all being given to the customer in 10minutes with machine decision making help. This will happen because AI will get a deeper understanding of customers, and make decision making easier.

Humans will survive because there will still be a need for curiosity, creativity and communications. And for using my 6As combining awareness (and cusriosity), ability, agility, anticipation, ambidextrousness and attitude. And all this with listening empathy.

These skills do not exist and will have to be taught.. And new jobs such as “mixed reality experience designer”, “algorithm mechanic” and “universal service advisor.

And so the inhuman companies (read bosses) have decided what their people have to do and what their customers should expect. Nowhere do they talk about themselves and their humanness.

The human touch requires deep emotional understanding. Re-training will have to include soft skills along with software and digital thinking. New AI and digitisation aid humans to improve their soft skills by reminding them to be more thoughtful and empathetic in their customer interactions. Simultaneously, the training will be on improving technology skills of the people. The company’s people will have to apply their humanness with sector knowledge, technical knowhow and human skills.

A BrightEdge survey states that 60% of the marketers that were surveyed say they will be using AI or automation. 31% say this will improve customer understanding, 27 % cite productivity gains and only 8% claim higher ROI. The major prize is personalization.

Other questions are:

Will the remaining work force be more human, more caring?

Will added data collection allow better customer value to be created?

Will the bosses become more human so as to create Customer Value? Will companies become more human and accessible and less inanimate?

I can (and I am sure you can) give examples of companies not being helpful and showing their not so human face. Let me give you examples of the human face of companies.

I was in San Francisco and had to go to San Francisco General for emergency treatment. I had medical insurance, and the hospital billed the insurance company, who did not pay, as the policy would reimburse payments made by me. I tried to pay the hospital, but they would only bill me and give me no information on payment or give me bills the insurance company could use to re-imburse me. I found it very difficult to communicate with the hospital. Try doing this from India.

Finally, I called Tata AIG and the call center put me in touch with someone who was willing to listen to me and go beyond the rules. They said they would waive the re-imbursement rule and pay the hospital directly. They were human in understanding my predicament and created value for me.

A second example is a large group of doctors, where I went for follow up treatment. The doctor and the staff treated me, my predicament of being unwell in a foreign country and just helped me out in all kinds of different ways. They never worried about billing. They were always accessible and caring. I could call and get answers and see them without an appointment. They also gave me a care kit free of charge to help me on my journey back to India from San Francisco. Great customer value.

A great example is Air India during the floods in Mumbai a few years ago. The airport was closed for two days. Passengers with other airlines were stranded as their staff had left. Air India had its entire staff at the airport, and took care of passengers (even from other airlines), fed them and took care of them. What caring!

Would this have happened if there was no human staff or reduced human staff (replaced by robots)?

Recommendations

I don’t want to leave you with questions. I want to leave you with actions:

  1. Accept you are human and your company is human
  2. Notice when the company pretends to be not human with employees, partners and customers. How can you change this?
  3. Does the company ask you to wear a not so human company cap and ask you to deal with others wearing that kind of a cap?
  4. Ask how you can make the company more human?
  5. Finally ask how you can make your systems more human. Ask how you can design your AI and non-human assets to be more human.

See the difference it will make. Your customers and your people will notice this. You will leave the not so human companies and people behind. 

Best,

Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
www.customervaluefoundation.com
Twitter @ValueCreationJ Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Value Makes you a Great Executive

Can Marketing Be a Value Destroyer ?

January 8, 2021

At the outset, let me say that I am a marketing person, and I believe in marketing. So do not view this article as an attempt to denigrate marketing. Instead, it is meant for marketers to think, especially in these Covid times and as we go into 2021.

During Covid, 50% of Americans had reported a reduction in household spending along with collapse of many people’s income. Many services have changed and reduced in volume such as healthcare (non Covid), education, food services, transport, event management, clothing and fashion and beauty treatment salons. Let us start by asking, whom does marketing work for? In fact, all employees work for the company. They are paid by the company and they have to do what the company wants. So, marketing works for the company and the good (as defined by the company) of the company. Should they also work for stakeholders and how?
What most companies want is growth, an increase of profits and stock prices. So, the mantra, down the line is increase prices and markets (and market share). And so, marketers toe the company line.

Unless the company has a proper purpose looking at all stakeholders, they cannot inculcate a sense of purpose in marketers and get them to think differently.

However, when the world shifts suddenly in a disrupting and disturbing fashion as it is doing in this Covid crisis, the old norms get thrown out. The Economist calls this the year when everything changed. They say the sheer scale of the suffering from covid-19, the injustices and dangers the pandemic has revealed, and the promise of innovation mean that it will be remembered as the year when everything changed.

Marketing Sherpa says so don’t run your marketing department with rules. Run the department with a customer-first approach as your guiding principle and a value proposition as your core goal.

Stay focused, but flexible. Do not be too narrow in your definition of markets and customers. Crises are a way of life. Find unique opportunities thrown up by virus…. distancing, mask like environment, stay at home, more internet, different needs. There are other crises waiting to happen: climate change, nuclear war, famines etc.

And when a crisis happens be ready to move and move fast. Take the example of Zoom and Skype.

Skype was the preferred choice before Covid for chatting and smaller meetings on line. But Zoom took over with aggressive marketing when they understood this was a big need for such services and webinars and left Skype which did not change, far behind. Focusing on meetings helped individuals, and later companies, schools and colleges. Webinars became a big business. Skype did not change, maybe because Microsoft, their owner was promoting Teams.

Let me give you examples. In many places, doctors are facing a cutback of patients. Most doctors in India have only 30% of the normal patients. Barbers have the same problem. Restaurants, airlines etc. and others have similar issues.

Instead of looking at the old market as a holy grail, can marketers and companies disrupt their thinking and look at the world differently. New products, new markets for existing products. An example is restaurants starting home delivery services. Maybe even restaurants at home…that is bring in a restaurant feeling with the food at home. Travel is advertising lower Covid risk, lower occupancy. An example is Ride the rails from Bavaria to Berlin

The clock is ticking on promo code GERMANY50. Try delicious food and beer and immerse yourself in the lively culture of Germany from only ($899) $849 if you book before midnight tonight.
Your vacation includes:

Round-trip airfare into Munich, out of Berlin
3 nights in Munich

Standard-class rail from Munich to Berlin

3 nights in Berlin

Breakfast daily

And if they had added you can do this Covid free, and quarantine free, maybe they would have more takers.

The euphoria around Airbnb’s blockbuster IPO last week is already long forgotten. Shares have plunged 25% since then, as Wall Street casts a bearish outlook on Airbnb’s current valuation.

Uber for example can become a delivery platform and not just a taxi service. Yes, they have Uber delivery but it could be expanded.

Half measures and incrementalism won’t work when your company emerges from a crisis. Marketers have to think about holistic transformation to go all in.

And what will companies do and what will marketing do when the world limps back to ‘normalcy’ away from the pandemic stranglehold and into a new future.

Warren Harding built a campaign for the presidential election in 1920 around his new word “normalcy”. It was an appeal to Americans’ supposed urge to forget the horrors of the first world war and the Spanish flu and turn back to the certainties of the Golden Age. And yet, instead of embracing Harding’s normalcy, the Roaring Twenties became a ferment of forward-looking, risk-taking social, industrial and artistic novelty.

The positive is that companies and marketers are working to restore the confidence and the economy. For this, marketers are value creators.

Brands came out to help the public during the Covid crisis with ads and notifications. They used digital, virtual platforms in a bigger way.

The negative is we might go back into a “Roaring Twenties” situation which can lead to unbridled growth, leading to another crisis. Then marketers will be value destroyers. And this destruction will include waste, demand for unnecessary things, destruction of Nature and so on.

All this requires marketers to be resolute, resilient and imaginative. Marketers need the 6As of being aware, anticipating, having ability and agility and becoming ambidextrous with a great attitude.

They must think of new ways to win, understand customers better, by also looking at non customers and also better data and analytics, not reforming but resetting according to Mckinsey, and have a renewed purpose for the future.

The future will then admire the way we reacted during a difficult crisis.

So, marketing which can become value destroyers when companies are internally focused can become value creators by changing themselves and their companies.

But it seems to me the urge for companies to grow, will force marketers to grow markets, irrespective of the true needs of people. To quote marketing Guru, Prof. Phil Kotler, Marketing is essentially a value creation discipline. He goes onto say in his article in the Journal of Creating Value, The Consumer in the Age of Coronavirus, that we should place more value on the needs of our family, friends and community. We should use social media to urge our families and friends to choose good and healthy foods and buy more sensible clothing and other goods. Brands must spell out their greater purpose and how each is serving the common good. Marketers and their companies must become more conscious of the fragility of the planet, of air and water pollution, of water shortages and other problems.

When the COVID-19 crisis is over, capitalism will have moved to a new stage.
Consumers will be more thoughtful about what they consume and how much they need to consume. And marketing will have to pay heed to this and create value and more value for the consumer and other stakeholders!

Kotler, Pfoertsch, Sponholz in their book, H2H: The Genesis of human-to-human marketing say that marketing can change the world for the better. During the last decades, marketing experienced many revolutionizing changes that added to the quality of life for many people. However, changes have not all been for the better. Due to some unethical practices of over-zealous profit-minded marketers, the current image of marketing, as perceived by employees and customers, has deteriorated to a point where “most people associate negative words, such as ‘lies,’ ‘deception,’ ‘deceitful,’ ‘annoying,’ and ‘manipulating,’ with marketing”. Public scandals, like falsified market research results, add further aggravation to this bad image. A general lack of trust prevails, which results in the exact opposite of what marketing is trying to achieve.

It is up to us to ensure marketing continues to create more value and destroy less value.

What do you think?

Best,

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