Archive for the ‘Business & Management’ category

My Terms or Yours: What Creates More Value?

August 15, 2021

Before I go into this week’s mailer, let me request you join the 4th Global Conference on Creating Value, http://www.CreatingValueConference.com The conference is on September 21-23, 2021. The conference is free. There will also be a certification program for those who want a Creating Value Certificate. Now let’s look at the article of the week below.

We are all brought up to follow rules. Sometimes we are forced to…when we buy something, we find that we have to follow the terms of the seller. When we enter school, we have to toe the line with the terms of the school (both parents and children). 

When we play with kids and animals, we often want to play with them on our terms; play when we want to, and how. We pay scant attention to whether the kid or the pet wants our attention then, or prefers to be alone or sleep. We want to play ball with them, and they want to read…. who will prevail? 

At the end neither does or one or the other does and the kids get used to following the terms, because they cannot change the parents, the system. 

The most enduring love is when it is on the loved one’s terms and not just on the lover’s terms. Yet we try to impose our terms on the loved one. 

Lessons to be learnt: 

Stakeholders do not want to live just with your terms. They want their terms to be taken into account. This is true whether you are an employee or a customer. Neither want only your rules to prevail. For example, have you thought of the customer’s rules? If the customer is much larger than you, you tend to follow the customer’s terms. 

This has best been brought out in Firms of Endearment by Raj Sisodia, Jag Sheth and others. We all should have terms of endearment. Terms that give rather than take, and are customer friendly. 

Government and bureaucratic organisations are the worst. It is my way or the highway. Countries with economic strength always try to deal with you on their terms. A great example is the US. 

Companies have rules so that there is no confusion, so that they can exercise control, and these rules are made for their convenience (to hell with the customer’s convenience). Health care is an example of not really caring about the customer’s importance. 

I understand you cannot make individual rules to suit individual stakeholders. Perhaps you can segment the customers by those who need more handholding, those that are savvier, those that have less time, those that have a serious problem. 

Even more serious is the issue of what terms do you dictate to AI? What can AI dictate to you? Should AI be allowed to dictate to you? And on what issues?

The least today’s leaders and corporate chiefs and customer people should be understanding the other person or customer’s terms and thinking about how to accept them. This thinking is the first step towards redesigning your own terms, because if you only think your terms are correct and will prevail you will not be able to get customer’s eyeballs and differentiation.

All of us have to embrace the two-way door concept to create value. You can create value by accepting the terms of the other person completely. This is what true love is, true caring is. But it cannot always be a one-way street and has to be two ways to create the most 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 Fourth Global Conference on Creating Value, September 21-23, 2021 e-conference
Join the Creating Value Alliance at creatingvalue.co

Ease and Simplicity Creates Experience and Value

August 1, 2021

“Life is not complex. We are complex. Life is simple, and the simple thing is the right thing.” — Oscar Wilde

I look for ease and simplicity: That is the best experience I can have.

You can attempt to give the customer great experiences…. but it is the simplicity that matters. Trying to delight the customer is very difficult and is a hit and miss action, and costs you a lot…. You have to ask, how do I give a good experience with that product… not just by its looks, not its charm, but its ease of use, its simplicity, not needing help, its working properly, ease of reaching out for help and solving problems and so forth. See Simplicity As A Core Value Of A Great Customer Experience and the article in the Harvard Business Review called: To Keep Your Customers, Keep It Simple .

Just remember, doing the right things in a simple fashion does not cost you as much as trying to give a great experience, when experience has been proven not to correlate to loyalty. And the cost of losing customers because things become complex.

Somewhere, someone has convinced the marketers we want more, whether it is experience, whether it is choice…I do not want customer confusion and value confusion. Take air conditioners made by any one brand, Hitachi or Panasonic or Samsung. In the 1.5 ton size , once you get past the energy efficiency rating and whether you want a split or a window unit, and whether invertor or not (so far easy to understand), there are at least 10 products with different product numbers with no explanation. and I can’t tell the difference between them from the model numbers. This is not experience, this is confusion. The numbers are different. I cannot compare what these are. I cannot tell if it is a 2020 model or a 2021 one. I cannot tell if it has single swing or dual swing without expending more time in search. Once I decide I want dual swing, I get 3 models with different numbers and prices and I have to work to find what they are. Often it is not easy to get the details. So, one lands up buying from Amazon on price!

Another example is buying a lightweight laptop. Many times, the weight is not given. How do I select? Then I get a processor of i5 7th generation or i9. How the heck am I supposed to know which is better? All to confuse me. Which is the latest processor?

They say customer beware, but if you are like me a lay customer with minimal knowledge, what do you do?

You do this by making the journey also very simple, easy to understand, easy to find, easy to buy, easy to receive, easy to service, easy to complain and get rectification. This really is the best experience you can get. I do not want a circuitous route that stops my journey or forces me to abandon my mission and perhaps a purchase. You must avoid customer value starvation and destruction.

I have managed to find people in many companies who can help me, whether it is an insurance company like Tata-AIG or HDFC Ergo; or Epson for printing, or Acer laptops and getting answers and solutions becomes easier.

Why is this the case. Are these people more in tune to help? More knowledgeable? If this is true, are we wasting time by relegating customer problems to grunt workers? People who have no knowledge and continue to say, this is our policy. Or even if you are a registered customer want to know the serial number of your air conditioner or your address when they already have it. Waste my time, waste my energy. And it wasted the company’s time, effort and money.

Don’t people realise these are value creators when you get a good experience, and that a surfeit of unnecessary experience can overwhelm you.

Certainly, I want no duplication. Same question being asked by multiple people. Was your product repaired? Was it repaired to your satisfaction? Have you ever said, no it has not been repaired to my satisfaction, does the person say they will get it rectified?

I have a Hitachi air conditioner, which every now and then starts to leak and send water down the wall. I have to get it fixed. But there is no permanent fix for an air conditioner installed only a year ago. The air conditioner is very noisy. The person comes and says there is no noise. What do I do? Where is the experience?

Some simplicity thoughts. Try to make things simple. Ask customers if they can understand what you are saying and your multiple offerings. Make it simple for them to choose your product. Make sure basic information is available and even more important, correct and up to date like contact numbers, addresses; ensure website links work. Make it easy to get more information. Do not confuse giving information to the customer with gathering information from the customer. I just went on the Pidilite company’s M-seal site. I wanted to know the different sizes the product was available in. The information did not exist on the website. I found a contact number and asked the question. I had to give them my name, telephone number, email, why I wanted to use M-seal and what my problem was and god knows what else, before the call centre person said you have to talk to our service manager in your area to get this information, as I do not have the information on product sizes. What is your pin code? I then get a number and after failing to connect a few times, I get my information. Phew!

When you make it easy for me to deal with you, you create value for me. I want to do business with you versus with someone who makes it difficult for me. Simplicity is about making it convenient for me and creating value for me and not for the seller.

The tragedy is that sometimes an easy buy may end up with a difficult to deal with product and its service. By this time, it is too late for you. And perhaps for the company because we do not get value from them and it may end up in our boycotting them!

I am sure all of you have examples to share with me.“Simplicity is the ultimate sophistication.” — Leonardo da Vinci

Best,


Gautam Mahajan, President, Customer Value Foundation

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

New Delhi 110065 +91 98100 60368

mahajan@customervaluefoundation.com

http://www.customervaluefoundation.com

Twitter @ValueCreationJ

Blogs: https://customervaluefoundation.wordpress.com/

Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic,     Customer Value Starvation

Come to the Fourth Global Conference on Creating Value, September 21-23, 2021 e-conference

Join the Creating Value Alliance at creatingvalue.co

Why “What’s In It For Me” Can Kill Value Creation

July 17, 2021

I live in India. People suffer from the “What’s in it for me” syndrome, which could be a manifestation of the results of poverty and deprivation, latent selfishness or self-centredness, or it could be just suspicious thinking…what is this person trying to get from me? It could also be a sign of poor self-belief and self-esteem that someone can take away my importance by offering or asking for something. For some it is an inbuilt filter to look at new requests or change.

I am not implying that people are selfish, but this could be the first test they use on a new idea or suggestion or request or anything new. “What’s in it for me” is a natural tendency for people. But when it becomes a defence mechanism, a way to say no, a closing of one’s mind, then we have to work on it and create value for people guided by this question.

This is not to say this (“What’s in it for me”) is not a worldwide phenomenon, but there seems to be, in many societies, an openness and curiosity to listen to something new, and perhaps develop it somewhat more. Maybe that is why we in India look for developed thoughts that we can use right away.

This could explain why our development of new technology is limited and our spending on R&D is low. Perhaps this is a phase that emerging nations go through. But this leads us to look at giving and taking.

“What’s in it for me” could also be a manifestation of a desire to seek more value and avoid poor value offerings. It is a combination of what you might get and what you give. Different countries and different people have a different sense of value. Value is subjective, and so different to various people.

I deal with many people. Many are takers. Others are willing to give so that they can take. Fewer are just givers. I come across givers, and they do not seem to have a “What’s in it for me” attitude. This could be because that is their nature. Or that they have developed from being givers and takers to just givers. I would imagine I would fall into the latter category, as compared to when I was much younger. Remember, giving is a sign of creating value.

Most companies and most of us give so that we can take, or extract. There is nothing wrong with it as long as you do not just take without giving or giving a proportionate amount.

Companies and people have to give so that they can get something in return, to create something so as to extract a reward. You give something to a customer or an employee and hopefully take away more than you give (which is profit).

When “What’s in it for me” is accompanied by a giving attitude, it can be positive and create value.

The message business gurus such as Robert E Quinn state is to have a purpose.

Having a purpose can alleviate the “What’s in it for me” thinking.  It can make you more efficient in looking at new propositions and ideas, reducing wasted time. The more you think your time is wasted the more you will hide behind the “What’s in it for me” thought.

Garrett Gunderson says the same thing and adds do not play to win, and he says in Forbes, Purpose = Value and Value = Profits. Stop playing to win is the start of giving first and not taking first. When you do this, you stop asking “What’s in it for me” as the first question.

Giving and not thinking of taking is a cornerstone of Value Creation. In my life many people have given help and support to me without any expectation…I do not want to single out anyone because I will miss many who did the same. All of you can remember those who gave to you, their time, their advice or other things, ungrudgingly and generously.

Faisal Hussain, CEO of Synechron Inc. in Huffington Post discussed why an exit-only strategy kills creation of value and that is why he said no to a $250M buy-out.

That is why many start-ups and their investors learn to give (and bleed) so that they can eventually take.

Ask, for example, what most business lawyers are taught to do. They tend to take or extract for their client without much thought of a give and take. Business people have to step in to do this. I had a colleague and a lawyer, John W. Conway when I worked at Continental Can. He thought of give and take and not just about extraction and that is why he became a successful businessman and Chairman of Crown Cork and Seal.

Reduction of the “What’s in it for me” syndrome could be through education (educating to think beyond oneself) to change attitude; it could be incorporating a learning culture, a culture of awareness and anticipation, and one of sharing. It is overcoming the curse of knowing it all or knowledge that prevents people from learning and creating value.

What we find is that most people who transcend the “What’s in it for me” syndrome are value creators. Leaders for example start as managers and problem solvers, but as leaders, while they continue to solve problems they have to come up with better methods and culture to not worry about the self or to put self interest ahead of the common good. An example is a CEO who knows he will be rewarded based on quarterly results. He is safe with that. But when he ignores that to seek long term gains for his company, he maybe chastised by the owners.

For us to create such value we have to assume our customers have a “What’s in it for me” syndrome, and get to answer that question and how their wellbeing can be enhanced by our offering or how our offering can create value for them. People seek value for themselves and answering the “What’s in it for me” question creates that value. Focus on not only their wants but their true needs, and what will benefit them.

Best,

Gautam Mahajan, President, Customer Value Foundation

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

New Delhi 110065 +91 98100 60368

mahajan@customervaluefoundation.com

http://www.customervaluefoundation.com

Twitter @ValueCreationJ

Blogs: https://customervaluefoundation.wordpress.com/

Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic,     Customer Value Starvation can Kill

Come to the Fourth Global Conference on Creating Value, September 21-23, 2021 e-conference

Join the Creating Value Alliance at creatingvalue.co

Why Creating Value is a skill needed for the future with AI and Technology

July 2, 2021

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

  1. add value beyond what can be done by automated systems and intelligent machines
  2. operate in a digital environment
  3. continually adapt to new ways of working and new occupations

While I agree these are necessary, I feel Mckinsey has defined the skill 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 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.

One of the skills necessary is to understand that creating value also means creating the future. While digitising and bringing in AI, one must:

  1. 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
  2. Ensure our values and human values are incorporated
  3. Have controls and checks for human intervention and control And I add
  4. Be continually adaptive to create continuing value
  5. Become multi-disciplinary and multi-aware

These might sound trite, but the lure of technology is to do more with less, and that seems to be the technologist’s endeavour becoming eventually the human endeavour. 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 to manage the future and do so by creating value. Digital democratisation will make people more equal, unless our AI does not allow it. How can this happen. By poor design. By letting AI discriminate (and this can happen by not giving the tools or training to or re-skilling people and many other factors).

Quickly, Ai is now embedded everywhere

OpenAI’s GPT-3 engines and others generate texts cannot be distinguished from human expression. And AI is becoming ubiquitous.

More reason for humans to be alert and top of all this by value creation

Denis Rothman states You can either be the tool of AI or use it as a tool. Millions of microdecisions will be made every day, and all humans put together will not be able to slow this down.

You have to have the right mindset and creating value is a mindset that can set you ahead and design smartly. Cross disciplinary thinking becomes imperative.

We have to manage the risk versus the value creation potential of AI. Only people with a creating value mindset of risk and value destruction potential can do this if they are AI savvy.

Risks of artificial intelligence  as told by Mike Thomas states there will be

Automation-spurred job loss

Privacy violations

‘Deepfakes’

Algorithmic bias caused by bad data

Socioeconomic inequality

Weapons automatization

“Once computers can effectively reprogram themselves, and successively improve themselves, leading to a so-called ‘technological singularity’ or ‘intelligence explosion,’ the risks of machines outwitting humans in battles for resources and self-preservation cannot simply be dismissed.”

Thus, skilling is necessary not only to use and understand AI, but to manage it and prevent a run-away AI catastrophe. People, governments, institutions, companies need to combine to mitigate AI risks in the future.

Best,

Gautam Mahajan, President, Customer Value Foundation

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

New Delhi 110065 +91 98100 60368

mahajan@customervaluefoundation.com

http://www.customervaluefoundation.com

Twitter @ValueCreationJ

Blogs: https://customervaluefoundation.wordpress.com/

Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic,     Customer Value Starvation can Kill

Come to the Fourth Global Conference on Creating Value, September 21-23, 2021 e-conference

Join the Creating Value Alliance at creatingvalue.co

Does a Customer Seek Customer Experience?

June 19, 2021

Does a Customer Seek Customer Experience?

I, for one, am happy not to get an experience. I do not seek a fantastic experience, but when I get it, I feel great. But what I hate are bad experiences and cannot seem to avoid them. They keep coming.

My parallel example is I do not want to have great health; I just want to be healthy. I do not want to be ill or sick. That really makes me feel bad, and makes me remember how good my health was.

All the bad experiences I get, and all of you get too, remind me that they are not necessary. That companies do not care enough and are choosing to seek great experiences for customers and not avoiding bad experiences: call waiting, call cuts, no return calls, problems not being addressed, wrong items being sent, service not being attended to… or my getting an air conditioner manufactured in November 2019 last month (April 2021). The company would not take it back. These problems are highlighted in my book, Customer Value Starvation can Kill, co-written with Walter Vieira, Phil Kotler’s long time friend.

How many people do you know who ask or seek an experience? Do you seek an experience? Most people want to have a normal experience. It is the bad experiences that cause people to turn away from products and services.

Why then has experience become a buzz word? It has replaced Customer Satisfaction, which was proven not to correlate to customer loyalty.

Customer loyalty can be a result of customer satisfaction, but only along with a lot of other factors.23-Aug-2017 in nicereply.com

As an example, if you are a United frequent flyer, you may have a very poor experience and are highly dissatisfied on your flight from New York to Chicago. The flight is late, the plane looks tired, the steward spills coffee on you. You return on American and everything is perfect. A great experience, and you are highly satisfied.

Will you stop traveling United and switch to American? Chances are you will not. At most you might write to United and say I am a frequent flyer; I do not expect this kind of an experience.

The real source of loyalty is competitive value created by a company over competition. Just measuring your own performance against yourself (did I get a higher score versus last year) does not give you the correct picture. The world is competitive. The customer has a choice. You must improve against competition. You must, therefore, also measure what competitors’ customers say about them.

You can see in my example of United and American Airlines, we have competitive data. This brings us to the next point. Loyalty is not created by measuring transactions or the experience. It is measured from embedded experiences or the memory of the experience. So, loyalty measurements using value have:

  1. Competitive data
  2. Measured not from the user but the decision maker who may not have the experience I described in my example above.
    1. As an example, a parent buys juice for your kid. The kid gets the experience and is the consumer. But the parent is the decision maker.
    1. A company makes a deal with a hotel group for their employees to stay in a particular hotel. The decision maker is the CXO or the Head of Administration. He himself may stay in a different (and better hotel) and so may not have the direct experience of the hotel he selected.
  3. Do not focus on transactions but on embedded feelings. Thus, the memory of the experience is more important for gaining loyalty. The difference between customer satisfaction surveys and customer loyalty surveys is that customer satisfaction surveys are focused on measuring customers’ current attitudes, whereas customer loyalty surveys focus on predicting customer behaviour and attitudes.

I do not know how you measure experience. Through satisfaction type studies? The actual satisfaction study based on the experience can be used for improvements. Through NPS (that gives you no data other than if you will buy again. In fact Gartner is advising to phase out NPS). I always thought satisfaction was based on the experience in buying, in use etc. Others state: Customer Effort Score, which measures how easy the customers found the interaction with your service. However, the list doesn’t end here. There are many other metrics. The Customer Health Score scores customers based on the likelihood they’ll generate an outcome; the Customer Churn Rate measures the rate at which customers stop doing business with you; also, the Customer Renewal Rate (how many customers cancelled a service vs. how many did not) can give you a sense of the quality of your customer experience. (Partly taken from Alon Ghelber, Are we measuring CX the right way?)      

Mckinsey in June 2021 stated: 15 percent of leaders said they were fully satisfied with how their company was measuring CX —and only 6 percent expressed confidence that their measurement system enables both strategic and tactical decision making. Leaders pointed to low response rates, data lags, ambiguity about performance drivers, and the lack of a clear link to financial value as critical shortcomings.

We use the words a satisfied customer, or a loyal customer, not an experienced customer. Our goal is value creation which leads to loyalty.              

I write this, not because I am against CX. I am for it. But I see the danger that CX will not live up to its promise, and go the way of CRM (Customer Relationship Management) or CSat (Customer Satisfaction). Customer satisfaction measurements on transactions are still relevant to make improvements and should be done more often than value studies.

Companies wishing to go into a CX program must ask: How much is it worth to me and how much is it worth to the customer, and how much should I spend. Should I go towards zero complaints first or seek the holy grail of delight instead? They must ask how important is CX in the buying decision and loyalty of a customer. Is it one of many items that makes a person buy? Value, for example compares competitive benefits (which include experience) and competitive costs as a customer would do when buying. Should I buy this shirt or that one. Is it the colour, how it looks on me, when would I wear it, is it easy to wash and iron, and how much does it cost vs. the other choices I have? I might buy the most expensive one (assuming I can afford it) or the cheapest one. But I buy the one that gives me the most value.

I thought it is relevant to also understand the definitions of customer experience

  • Customer experience is the impression your customers have of your brand as a whole throughout all aspects of the buyer’s journey. It results in their view of your brand and impacts factors related to your bottom-line including revenue. (see https://blog.hubspot.com/service/what-is-customer-experience)
  • Customer experience (CX) is everything related to a business that affects a customer’s perception and feelings about it. Customer experience (CX) focuses on the relationship between a business and its customers. It includes every interaction, no matter how brief and even if it doesn’t result in a purchase. https://www.zendesk.com/blog/why-companies-should-invest-in-the-customer-experience/
  • Smartercx presented by Oracle gives 15 definitions, mostly on transactions (see https://smartercx.com/15-definitions-of-customer-experience/
  • Blake Morgan in Forbes: Everything a company does contributes to how customers perceive it, and therefore to the overall customer experience, including the messaging you use, the products you sell, the sales process, and what happens after the sale, plus other internal factors like the interworking of the company, its leadership, and the engineering of the product or service.
  • CXPA interviewed an international panel of CX practitioners, consultants, and academics to provide this independent, platform-agnostic introduction to CX.
  • Customer Experience (CX) is the perception that customers have of an organization- one that is formed based on interactions across all touchpoints, people, and technology over time. 
  • CX Management the set of practices that an organization employs to meet (or exceed) customers’ expectations. True CX management incorporates four key interrelated elements:
    • A Culture of Customer-Centricity
      Every aspect of the corporate culture – from the top-down is focused on the customer.
    • The Realization of the Rewards
      Every customer experience gain contributes to positive business performance outcomes. Holistic Alignment of Systems and Structures
      Every department and employee is united in the quest for customer experience excellence.
    • Evolution Of Business Practices Through a Focus on Customer Needs and Engagement
      Every thought and action is meaningful, making customers’ lives better and showing you care.
  • With so many options available, choosing the right resources to advance the success of your organization CX initiative is a significant decision as you are certain to invest time, money, energy, and attention – all extremely valuable resources. We have addressed common questions in this article to help you make better-informed decisions when selecting resources to strengthen your CX practice.

By and large it is about interactions and customer culture.

Let us end with Forrester’s findings quoted by Business to Community:

They summarize the four key findings that prove the value of an effortless experience approach:

Finding no. 1: The delight strategy doesn’t improve revenue and there is no need for it—loyalty doesn’t increase when customers are delighted. And in fact, the book argues that it costs more to delight.

Finding no. 2: Customer satisfaction doesn’t predict loyalty as well as brands believe. The book states that 20% of customers who reported being satisfied also reported they intended to leave the company.

Finding no. 3: Customer service interactions drive more disloyalty than loyalty, in general. Which emphasizes the need for an effortless customer service interaction.

Finding no. 4: The key to mitigating disloyalty is to reduce customer effort. In fact, 96% of high-effort experiences result in disloyalty, compared to 9% of low-effort experiences resulting in disloyalty. So, my bottom line is use CX carefully. Make it a useful tool, and do not over-use or over-extend it. Give an experience and a journey where it is needed, and minimise both because customers do not have the time and the patience (see Dave Brock’s article) to look for an experience unless they are on a holiday, and the experience is very important. Otherwise, if I buy a phone, I want it to work, I want to use it without hassles and extra work. This no-experience is the best for me. When the phone does not work, the bad experiences take over, which we want to avoid at all costs.

Best,

Gautam Mahajan, President, Customer Value Foundation

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

New Delhi 110065 +91 98100 60368

mahajan@customervaluefoundation.com

http://www.customervaluefoundation.com

Twitter @ValueCreationJ

Blogs: https://customervaluefoundation.wordpress.com/

Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic,     Customer Value Starvation can Kill

Come to the Fourth Global Conference on Creating Value, September 21-23, 2021 e-conference Join the Creating Value Alliance at creatingvalue.co

Should Creating Value Be Part of Leadership and Education

June 7, 2021

In HBR Ryan Gottfredson and Chris Reina wrote, and I quote 

Organizations worldwide spend roughly $356 billion on leadership development efforts. Yet, the Brandon Hall Group, a human capital research and analyst firm that surveyed 329 organizations in 2013, found that 75% of the organizations rated their leadership development programs as not very effective. Why aren’t companies getting more bang for their leadership development buck? Our latest research suggests it’s likely because most leadership development efforts overlook a specific attribute that is foundational to how leaders think, learn, and behave: their mindsets.

That is why focus on training education and in particular, and whether the MBA program truly creates leaders or just imparts knowledge.

Leaders are born, often by circumstances, sometimes by opportunities, but most often by attitudes and mindsets.

My 7As for executives holds for leaders also:

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

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

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

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

Adaptability: Being able to change with circumstances

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

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

MBAs are taught functional things. And they are great at these, and in playing what ifs. But the focus on mindset is limited. No one teaches value creation.


I say why not a mindset to get things done, to be liked, to believing in one self, and in history and tradition.

My own experience is that mindset changes during times and situation and most leaders are a complex combination of all of these. In the good all days, we tried ego drive, social drives, tradition and learning drives and the impatience to get things done.

Too much is taught about functional issues and traits but not about true mind set. One that is value creation is a thought process, is a mind-set that makes your training, your background, your psychological needs focus on creating value. How do we teach this which is not taught in MBA programs?

Mindsets are set from childhood experience, likes and dislikes, events and people. Mindset is influenced by books we read, our teachers and parents.

In later life, leadership coaches teach traits and functional changes we need.

Creating Value is a way of thinking. It, if part of the mind-set, becomes a very powerful leadership tool by guiding the thinking towards positive leadership to do good and improve the well being and worth of institutions. Because of its 7As it provides tools to be pro-active. The earlier creating value is taught the better impact it has on mindset.

I am not saying a creating value mindset is the only requisite to be a good leader. It is not, but it is a very positive way of thinking and with other traits can make a leader successful.

Executives and leaders are not taught to create value in MBA courses, and indeed in most education. Instead, the focus is on traits, values and functional skills. All are necessary, but the creating value mindset makes you think of doing good, improving the well being of, increasing the worth of people and institutions, and the more refined, the more capable a leader becomes. He can then see things differently, he can weigh different options simultaneously, he is much more aware, he notices things that others might not, he anticipates in a better way. He is much more adaptable in situations, and has an attitude to see things differently and to win. Winning is just for himself but for the best outcome for the team.

George Mason University cites core values (which are actually traits): “Respect, as demonstrated by self-respect and respecting others regardless of differences; treating others with dignity, empathy and compassion; and the ability to earn the respect of others, making a difference are all traits. Integrity, authenticity, courage, service, humility, wisdom etc. are values.”

Modesto A. Maidique and Nathan J. Hiller is academic director of the university’s Centre for Leadership in MIT divide core mindsets into Sociopath when you serve no one, the Egoist who serves the self, the Chameleon who is good to anyone, the Dynamo who serves goals, the Builder who serves the institution(institution) and the Transcender, who serves society. Everyone has a mix of these, and these mixes can change with circumstances. Thus, you may become amore of a transcender when needed and so on.

That is why it is important for leaders to think of their purpose, and whom they serve.

This is the like the 4 basic traits we look at in people, their ego trait, a social trait, their drive (seen as impatience) and the traditional looking traits where your learning, your traditions, history tend to drive you. The latter are good scholars. The relative importance of these four traits (and we can measure them) determines your personality.

The fact is we are not one self but a combination of many senses that must be controlled by a creating value attitude.

In her wonderful book, Working Identity, author and leadership expert Herminia Ibarra wrote: “We are not one true self but many selves and these identities exist not only in the past and present but also, and most importantly, in the future.

I quote from literature:

Mindsets are leaders’ mental lenses that dictate what information they take in and use to make sense of and navigate the situations they encounter. Simply, mindsets drive what leaders do and why. For example, they explain why two different leaders might encounter the same situation (e.g., a subordinate disagreement) and process and respond to it very differently. One leader might see the situation as a threat that hinders their authority; another as an opportunity to learn and further develop. When leadership development efforts ignore mindsets, they ignore how leaders see and interpret problems and opportunities like this.

Lolly Daskal, thinks of leaders from a point of view of values and traits. Gleeson in Forbes’ talks of traits like openness, ambition, desire for ROI, belief that its important, fear of Consequences of Inaction, soul-Searching, commitment to Self-Improvement.

This might seem obvious, but the best leaders see leadership as excellence and a constant journey as opposed to a destination. They are never truly satisfied with the status quo always asking, “How can I improve?” They are life-long learners and always ripe for growth, he adds.

I feel that we are more comfortable talking about functional things and not the mind set so necessary in a crisis, in a situation requiring change, fast action (or even inaction if necessary)

Bob Dunham of Institute of Generative Leadership talks about a value creation culture:
If we are going to grow a value-creating culture, we need to see that organizations exist to create value, not just to get things done. If what we are doing isn’t valuable, then it likely is waste. As leaders, we want to help our teams, organizations, and communities go from cultures that focus only on excellence in execution to cultures of value creation.

He calls it a field of action that has structure, process, and skills. It’s something that can be learned and grown over time, and it is becoming more of a competitive necessity in a changing world.

We need to make value creation a practice and a skill.

He emphasises that value is as seen by the customer or the beholder

Yes, creating value is an essential part of leadership and education and must be embedded in both, through mindset and thinking.

Best,

Gautam Mahajan, President, Customer Value Foundation
Founder Editor, Journal of Creating Value jcv.sagepub.com
New Delhi 110065 +91 98100 60368
mahajan@customervaluefoundation.com
http://www.customervaluefoundation.com
Twitter @ValueCreationJ
Blogs: https://customervaluefoundation.wordpress.com/
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic, Customer Value Starvation
Come to the Fourth Global Conference on Creating Value, September 21-23, 2021 e-conference
Join the Creating Value Alliance at creatingvalue.c

THE POWER OF VALUE

May 22, 2021

CVF ARTICLE OF THE WEEK

The real power of value, the real importance and significance of value, the true value of value is that value is what we all seek for ourselves. We want to create value for ourselves and our associates and connections which includes our families, firms and society, country and so forth, making value most valuable to us because it makes us more valuable. While creating value for others we co-create value for ourselves. We empower others. This process makes us aware of what is happening around us and that value is all around us, and that we can create more value for the greater good including ourselves, and that value is waiting to happen.

That is why value is so important to you and your connections, your families. The true power of creating value is that the process creates value for you.

I wrote an article on Power and Value, and focused on whether Power can create or destroy value. The conclusion was unbridled use of power destroys value.

However, in that article, we dd not focus on the power of value. In other words, is value powerful and does it create power?

Value, especially when created for others, creates more value for the giver. The more value the giver gives, and without expectation, the more power he gets and the more value he gets back. This power could be in the form of respect, or in terms of fame or in advancement. It could also be monetary.

Giving without any expectation (of returns) is the best kind of value giving. Thinking of a quid pro quo is how most giving is done, and is how companies should work. Giving selfishly and meaninglessly is the worst form of giving.

Giving selflessly is creating great value for yourself and the recipient. The power of this value is immense. It gives you blessings and future good that you can use. It is like banking value for the future.

So, Value happens when you do something good or improve the well-being of people and entities.

Value is powerful, because if you are creating it, people notice you and think of you positively, and consider you worthy of power and fame. Value is powerful because when you create value for others, they mark you as value creators and therefore leaders and better than others who are not creating as much value as you. In business, bosses recognise those who create value more than they notice just good performers. The people who get ahead are value creators. Many people become powerful not because they set out to get power but because power comes to them because of the value they created. This power, generally that value creators achieve, if not misused but used meaningfully to create more value for others is good power to have.

This is the power of creating value.

In addition, customers recognise a company as a value creator, and tend to buy from the company creating the most value.

Companies that create value for their stakeholders are preferred and succeed. Stakeholders and customers reward them by creating value for such companies in return. This value creation is often monetary and seen as profits, or with potential to create profits, like loyalty or referrals to the company.

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.

Based on this definition, we want to improve the overall good for or improve the well-being or worth of people, companies, goods and services, and stakeholders including the society and the environment.

Thus, companies have to do good for or improve the worth or well-being of these various stakeholders. Taken by itself, it may appear to be one sided. After all there is no question that companies exist to create value for themselves and to make a profit. They are not meant to be purely charitable organisations.  This was the point that Milton Friedman clearly made in his infamous 1970 New York Times Magazine editorial,  “In the present climate of opinion, with its widespread aversion to “capitalism,” “profits,” the “soulless corporation” and so on, this is one way for a corporation to generate goodwill as a by‐product of expenditures that are entirely justified in its own self‐interest. “Thus, companies have to extract value from stakeholders to be profitable, and if in the process they need to say something to generate goodwill, so be it”. This, crudely, was the profit motive. However, if the purpose is also to create value for stakeholders, who in turn create value for the company then this becomes meaningful. Such value created by stakeholders for the company can be extracted. Of course, it is important the stakeholder feels value is being created for them. This becomes a win-win situation. Such value creates power.

What is important is that the company must realise they are the first movers within the value creation process. They have to create value for the customer, who in turn decides to buy from the company based on the value the company has created for him or her and other stakeholders. In making this decision to buy, the customer most likely is looking at the whether the company is adding or destroying value for society and the environment and other stakeholders.

When the customer buys, they hopefully give the company value which is partially profit, partially long-term loyalty etc.

Likewise, companies have value created for them when they create value for society, the environment and other stakeholders. This is the power of creating value for stakeholders.

As a reader, Zain-Ul-Abedin commented: “when power gains value then system drains, when value gains power then law and justice prevails and society flourish, this is when right is might, and it negates might is right.”

Therefore, do create value for others and taste the power of value.

The older article is below.

POWER AND VALUE

Gautam Mahajan Gautam.mahajan@gmail.com

D. Sudarshan former Dean of and Prof Emeritus, U of Kentucky said to me that power creates value and is the ultimate value. He said the goal is also to empower stakeholders, and that of course includes customers. That empowering creates value is true.

Power assumes the right to control oneself, one’s environment, and others. Personal empowerment assumes no such power over others, but recognizes complete responsibility for self and the choices made by self. Those sound-like pretty clear definitions, but the urge to exert power over others might blur the lines between each. So, we need to clarify.

To me, power is one of the rewards people or companies look for beyond money or profits or instead of them (they feel money will come to them because of power; or the reverse, power will come to them because of money). We have always said profits follow value creation, and so does power if sought: it follows from creation of value. So, the more you create and the more you get the richer you get and the more powerful.

Fame is yet another item people seek (or being known). This is almost as important to power seekers as money may be.

However, there are people who may achieve fame without seeking power. These are people creating value for others and not for themselves, and they create more value than power and fame seeking people, who tend to destroy value also. Some college professors are examples of creating immense value for others.

Unfortunately, there is the possibility of pursuing and possessing too much power. Unbridled power, i.e., power improperly used can and perhaps will destroy value just as will profit creation absent empowering customers. Some people feel only a tremendous amount of power can create value. This is a mistaken notion. For example, monopolies sooner or later get regulated or even broken up. Excessive power can be seen as a power imbalance and nature abhors imbalances, except in entropy- that too only as far as we know (who knows what black matter and black energy do for entropy!). Customers will form buying clubs or cooperatives either formal or informal in structure- neighbours helping neighbours.

The message is that power should not be misused. Such misuse causes value destruction for others.

The ultimate customer loyalty is when empowered customers choose a brand/firm over others because it serves them better and they see more value from them.

Empowerment creates value. Value is created when you empower someone, and empowered people create value.

Beware of powerful people and moneyed people who wish to wield their power and impose themselves on others. They are destroyers of value.

Today in Covid times in India, hoarders and black-marketers exert their power over hapless citizens by controlling medicines and oxygen (and concentrators), hospital rooms and so forth.

May the curse be with them.

Best,


Gautam Mahajan, President, Customer Value Foundation

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

New Delhi 110065 +91 98100 60368

mahajan@customervaluefoundation.com

http://www.customervaluefoundation.com

Twitter @ValueCreationJ

Blogs: https://customervaluefoundation.wordpress.com/

Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic,     Customer Value Starvation

Come to the Fourth Global Conference on Creating Value, September 21-23, 2021 e-conference

Join the Creating Value Alliance at creatingvalue.co

Power and Value

May 16, 2021

by Gautam Mahajan, gautam.mahajan@gmail.com

D. Sudarshan former Dean of and Prof Emeritus, U of Kentucky said to me that power creates value and is the ultimate value. He said the goal is also to empower stakeholders, and that of course includes customers. That empowering creates value is true.

Power assumes the right to control oneself, one’s environment, and others. Personal empowerment assumes no such power over others, but recognizes complete responsibility for self and the choices made by self. Those sound like pretty clear definitions, but the urge to exert power over others might blur the lines between each. So, we need to clarify.

To me, power is one of the rewards people or companies look for beyond money or profits or instead of them (they feel money will come to them because of power; or the reverse, power will come to them because of money). We have always said profits follow value creation, and so do power if sought: it follows from creation of value. So, the more you create and the more you get the richer you get and the more powerful.

Fame is yet another thing people seek (or being known). This is almost as important to power seekers as money may be.

However, there are people who mat achieve fame without seeking power. These are people creating value for others and not for themselves, and they create more value than power and fame seeking people, who tend to destroy value also.

Unfortunately, there is the possibility of pursuing and possessing too much power. Unbridled power, i.e., power improperly used can and perhaps will destroy value just as will profit creation absent empowering customers. Some people feel only a tremendous amount of power can create value. This is a mistaken notion. For example, monopolies sooner or later get regulated or even broken up. Excessive power can be seen as a power imbalance and nature abhors imbalances, except in entropy- that too only as far as we know (who knows what black matter and black energy do for entropy!). Customers will form buying clubs or cooperatives either formal or informal in structure- neighbours helping neighbours.

The ultimate customer loyalty is when empowered customers choose a brand/firm over others because it serves them better and they see more value from them.

Empowerment creates value. Value is created when you empower someone, and empowered people create value.

Beware of powerful people and moneyed people who wish to wield their power and impose themselves on others. They are destroyers of value.

Today in Covid times in India, hoarders and black-marketers exert their power over hapless citizens by controlling medicines and oxygen (and concentrators), hospital rooms and so forth.

May the curse be with them.

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 CreationTotal Customer Value ManagementCustomer ValueInvestmentHow Creating Customer Value Makes you a Great Executive  The Value Imperative,Value Dominant  Logic,  Customer Value Starvation can Kill (with Walter Vieira)

Join the Creating Value Alliance at creatingvalue.co

The Covid Blame Game

May 1, 2021

By Gautam Mahajan, gautam.mahajan@gmail.com

Indians have become experts at the blame game, especially during Covid times. Some blame is politically motivated, other is just trying to find a scapegoat. No one wants to look at these problems objectively and whether they are to blame also.

Have you ever thought: Does Covid come to my house selectively, looking for me? Or do I allow it to come in? The answer of course is that if we are careful, and do not have outside contact and do not let our maids in, do not let delivery boys in, do not let friends in, Covid cannot come into our house and infect us. When we start letting people in, chances keep increasing for Covid to enter and infect us.

Second, if we do not go out, Covid cannot infect us. However, if we go out, chances are ever increasing depending on the circumstances that we will be exposed to Covid attack.

Take people who insist on playing golf, of meeting friends (even selectively) over coffee, walking next to people, attending parties, attending weddings, going shopping, going into crowded areas. These people are exposing themselves to Covid.

Thus, the first person we have to blame is ourselves.
Yes, I know there are circumstances you cannot avoid. My friend, a JNU professor had to spend 5 full days at National Testing exams in Okhla. Or the unfortunate people having election duty and coming in contact with the public, or cops, or health workers. Or you have to go out just to make a living, or get essential supplies.

The Government and also the people have to accept the blame for going to the Kumbh or attending political rallies where the public and the political parties are to blame. People did not have to go to the Kumbh or to rallies.

Then we come to the crisis in hospitals due to Covid cases.

First the number of cases were minimal in February 2021.  There were zero deaths for the first time in 10 months. 90% of the hospital beds were empty. The positivity rate in Delhi dropped to 0.18 per cent.

Today there were 391 deaths yesterday and over 24000 new cases reported and a positivity rate of 33%. No wonder the hospitals are full.

Are all the Covid infected people that are hospitalised really requiring hospital treatment? One neighbour entered hospital because it was too difficult for his wife to take care of him.

We never heard of oxygen as a serious treatment till a few days ago, and now there is a full blown oxygen shortage. We had heard of ventilator shortages. Were the hospitals not aware of this need? Was the Government the only one to be concerned about this?

Who is to blame for this huge spike in admissions?  Is it the new strains of corona? Or the government for allowing Kumbh and mass gatherings? People for going to these knowing the dangers? But the spike in Maharashtra pre dated the Kumbh and the elections.

How about those people with Covid, hiding the fact they have Covid?

And then there is black marketing, hoarding and indiscriminate buying of medicines. Here again the people and the private/public sector must share the blame. The false information on social media getting people to buy and stock indiscriminately is also to blame.

I think we all share the blame collectively, the people (that is us), the distributors and middlemen and the central government and the state governments.

The time has come for us to stop the blame game, and each one takes his responsibility seriously and acts on it. Let us stay away, and be masked.

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 Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic
Join the Creating Value Alliance at creatingvalue.co

Value Washing

April 21, 2021

By Gautam Mahajan and Philip Sugai

Try googling Value Washing. You get washing machines. Which is not what we mean by Value washing a term first used by co-author Prof. Philip Sugai of Doshisha University in Japan in his 2019 article for Campaign magazine.

The unfortunate reality is that we have gotten used to value washing. Many companies make statements they do not follow such as we are customer friendly, we are customer centric, the customer comes first, and we are environmentally friendly. These words are meant to give a warm fuzzy feeling, but fail to actually improve the situation for their customers.

Value washing is a form of fluffy (and often meaningless) statements companies make when describing their work in value creation. This is more common for societal and environmental value creation. However, as one digs deeper, washing is present in all forms of stakeholder value creation whether for customers, for employees or partners. Value washing can happen by using jargon, vague terms, outright lying, irrelevant claims, and often with no proof something is really happening or there is a change in thinking or action actually being set in place.

Often this is just plain white washing and often brain washing.

This happens because:

Many companies have mastered the art of washing by giving meaningless statements and platitudes to customers for years. They keep saying we are customer centric etc. but they are not. They in turn may actually believe what they are saying, but never put in place actual metrics to measure their results, nor transparently disclose these so that an outside authority can judge whether or not they are indeed doing what they say.

This also happens when companies begin to write about issues that are currently trending, in order to improve traffic to their websites or social media accounts without actually offering anything concrete. Value creation for stakeholders has become fashionable, and companies feel they have to show they are doing something. Therefore, the fluff and meaninglessness of the words that they use relative to their actions.

To do so, let us explore what value is and how it is washed for each of the following stakeholders, whether customer, employee, partner, society or Nature. We start with a well-known term, green washing.

Greenwashing is the process of conveying a false impression or providing misleading information about how a company is environmentally friendly or the company’s products are more environmentally sound. Greenwashing is considered an unsubstantiated claim to deceive consumers into believing that a company’s products are environmentally friendly. (Taken from Investopedia)

An example of greenwashing is the multinational oil and gas corporation ExxonMobil indicating they were reducing greenhouse gas emissions while they were actually increasing. (January 20, 2021 article)

“Greenwashing” refers to fashion companies claiming that their products are environmentally friendly, when often they are not. Examples of greenwashing from companies today include the fast-fashion brands Uniqlo, H&M, and Lululemon — which are popular with college students.03-Mar-2020

Let’s contrast this definition with the meaning of value creation:

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.

Based on this definition, we want to improve the overall good for or improve the well-being or worth of people, companies, goods and services, and stakeholders including the society and the environment.

Thus, companies have to do good for or improve the worth or well-being of these various stakeholders. Taken by itself, it may appear to be one sided. After all there is no question that companies exist to create value for themselves and to make a profit. They are not meant to be purely charitable organisations. This was the point that Milton Friedman clearly made in his infamous 1970 New York Times Magazine editorial, “In the present climate of opinion, with its widespread aversion to “capitalism,” “profits,” the “soulless corporation” and so on, this is one way for a corporation to generate goodwill as a by‐product of expenditures that are entirely justified in its own self‐interest. ”Thus, companies have to extract value from stakeholders to be profitable, and if in the process they need to say something to generate goodwill, so be it. This, crudely, was the profit motive. However, if the purpose is also to create value for stakeholders, who in turn create value for the company then this becomes meaningful. Such value created by stakeholders for the company can be extracted. Of course, it is important the stakeholder feels value is being created for them. This becomes a win-win situation.

What is important is that the company must realise they are the first movers within the value creation process. They have to create value for the customer, who in turn decides to buy from the company based on the value the company has created for him or her and other stakeholders. In making this decision to buy, the customer most likely is looking at the whether the company is adding or destroying value for society and the environment and other stakeholders.

When the customer buys, they hopefully give the company value which is partially profit, partially long-term loyalty etc.

Creating value for the society can mean good governance; can mean helping employeesto benefit and directly serving society through social responsibility actions, through adding to the tax base, through consuming from other companies in the society mix, by hiring people, by adding infrastructure, etc. Companies can add value by using their expertise to help solve societal problems, taking up humanitarian causes or having products or services that can do that.

Society creates value for companies by good governance, by being a source for people, services such as sewers and power, by being a marketplace for the company by providing roads and infrastructure, a justice system and so on.

Creating value for the environment means being environmentally friendly, not destroying the environment, by replenishing the environment, by using recyclable materials and products, create environmental awareness within employees and to society at large and manage such efforts, by not wasting power and other resources, and even trying to reduce their usage. Protecting the environment creates important value for the company as does the prevention of natural calamities caused by human error and design like pipe bursts, oil spills, forest fires, etc. Deforestation, over-mining, over-fishing or dumping wastes into nature are examples of destroying the environment which companies should not do, and efforts are underway globally, through the Capitals Coalition and other organizations to make companies accountable for such value destroying activities.

Value created by nature for the company could be realized as a good environment to work in (assuming they have not polluted the environment), natural parks and wilderness to enjoy, giving renewable resources to the company such as rainwater harvesting (which is an example of co-creating); nature is a primary source for raw materials and energy, a source for food and good air, diversity of flora and fauna, A good environment reduces stress and increases pleasant feelings. The destruction of nature will eventually lead to a future where our planet itself can no longer sustain us.

We can think of value created for employees to include such things as: a good place to work, giving meaning and sustenance (financial and non-financial) to people. Employees in turn create value for companies through making the company more human, by earning profits through their good work, by working on and helping society and the environment.

For partners, it is to be fair and honest and help them make a good profit and in turn partners create a supply and delivery chain that makes a profit for the company.

The shareholder profits from the company by sharing in the profits, while in turn supplying capital and other support to the company. It is well known that the cost of this money has to be less than the profits generated or extracted from this investment

To do this, a company must have a purpose, and not a wishy-washy value creation statement but a true value creation objective.

They then have to have a vision and mission that includes value creation. This then becomes a culture to perform. Lastly the company has to believe that they are human and not an inanimate entity, and that profit is a result of creating profit, which can be intangible and tangible.

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, while focusing on the environment and society. Purpose guides life as it did for Gandhi and Eichi Shibusawah and sports people like Tiger Woods. Purpose has an impact on behaviour, gives a focus on direction and goals and makes life meaningful and full of value.

The purpose has to be good for the company and the stakeholders, and must therefore be good for people, and society. These concepts are called Blended Value by Jed Emerson.

Sadly, there has been destruction of the environment, of people, of society under the guise that the company is good for the people. Carelessness, and bad management has led to damage of the environment and forest fires, or oil spills, whose impact is disguised through the use of value washing. Getting companies to think they are human and not inanimate is a good starting point. Getting them to commit to a clear set of objective goals with clear and transparent reporting on their efforts to achieve them is the next step and one that many organizations globally are working to help us achieve.

We would like to have your views.

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 ValueInvestment, How Creating Customer Value Makes you a Great Executive, The ValueImperative, Value Dominant Logic
Join the Creating Value Alliance at creatingvalue.co