Customer and Value Migration

Your Customers move where they perceive they get better Customer Value, causing your company Value to migrate to competition

Step1: The Company does something to reduce the value they deliver: by increasing price, making it difficult to buy or maintain or get service, or reduce product features. They reduce value to Customer.
Step 2: Customer Value Migrates to (is better at) your Competitor.

Step 3: Customer starts to look for better Value.

Step 4: Customer Migrates to your Competitor.

Step 5: Value (profits/returns/sales) Migrates to your Competitor

Why do some Customers migrate? And why don’t others?

Many Customers remain with a company because of convenience and inertia. They are just too lazy to move. Just because they stay they are not essentially loyal.

And loyalty is not necessarily a long term or a lifelong phenomenon. Loyalty has to be gained and maintained by providing higher Customer Value.

And as your competitors start to provide better Customer Value, there is consequent Customer and Value migration away from your company towards competition.

In 1996, Adrian Slywotzky described Value migration. Bala V. Balachandran in a 2007 article, Customer Centricity Drivers: Driver for Sustainability Profitability cautions that failure to keep up with Customer Value migration is a key reason for a reduction in the performance of a company

Value Migration of Customers happens because your business model is outmoded and Customers are finding companies which create more Value for them and probably through a better business model.  The competing Value-creating forces have moved beyond your company’s offerings.

And Marketing strategy, according to Adrian is the art of creating Value for the Customer. This can only be done by offering a product or service that corresponds to Customer needs. In a fast changing business environment, the factors that determine Value are constantly changing.

A business model describes the rationale of how an organization creates, delivers, and captures Value

We have seen the shift from land lines to cell phones

From teletype to fax to email/scans

From full fare to discount airlines

From Lotus 123 to Excel

The various storage and replay devices, spool tapes, cassettes, video tapes, floppies, CDs, iPod, Pen drives

Thus Value can flow between industries, between companies, and within a company. And this happens in stages.

Value can be absorbed by different industries or companies, iphone and the Samsung clone (the inflow stage). Then there is a Value equilibrium stage where there is some stability. And as companies fail to innovate and move ahead and do not create Customer Value there is the Value outflow stage.

Since we are looking at the Value your firm creates versus competition, Customer Value Added is always relative. This is a necessary measurement for you to make.

Unfortunately marketing and CXO thinking is focused more on acquisition, and sometimes retention. But the Customer is growing, evolving and changing. He graduates from being a student to an earning member of society and acquires a family and affluence. His needs are changing, and just trying to get him to remain loyal is not enough. How do we get him to buy the things he was never buying before? Or he will migrate.

And more importantly, when he migrates you might ignore him. That is why your data has to show when a person moves from being a heavy user to an influencer and a light user. Take someone who stays in a hotel chain and acquires titanium status and then gets promoted and travels less, but influences the use of the chain within his company. But he is ignored because he no longer is a heavy user of rooms!

Therefore beware when you reduce Customer Value. It will hit you because as your actions reduce Customer Value, you are causing Customer Value to migrate to your competitor, and consequentially Customers migrate and Value migrates with them away from you. Be careful when you reduce Customer Value. You might be reducing your profits!

Your comments are welcome!

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transform the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

Long Term Strategy Creates More Shareholder Wealth Than Short Term Results

To Create more Shareholder Wealth, would you Focus on the Short Term?

The CEO has to think whether Value Creation is a flawed concept, particularly as it places the customer and employees ahead of the shareholder.

This concept implies that doing good things for employees and customers not only makes excellent common sense but also creates more long term value for the company and ensures its longevity.

Fortunately many CEO leaders are supporting the Value Creation belief through thinking about Conscious Capitalism.

Recently thought leaders are questioning the concept that has been drilled into CEO’s minds that value creation for shareholders is their goal. Not only that, this goal has to be achieved in the short term, and long term thinking has to take second place in the CEO’s thinking.

Many people have come out against this thinking.

These include Lynn Stout, Professor of Corporate and Business Law at the Clarke Business Law Institute at Cornell Law School, John Mckay once CEO of Whole Foods and Paul Polman, the Chief Executive Officer of Unilever.

John McKay coined the phrase conscious capitalism.

He states that while it is essential to make money, the company has a higher purpose, and this purpose goes beyond profit. The purpose could be creating value for society, and the company’s stakeholders: ‘They understand that their role is to serve the purpose of the organization, to support the people within the organization and to create value for the all of the organization’s stakeholders’.

Yaz Ishitaka, formerly with Toyo Seikan in Japan, said when you ask whom does the company work for, one of the answers will be for society (as tax payer), for customers who provides the means of life, and for employees. Need not to hurry but conclusively, the most important key is who provides the source of wealth to sustain corporate and individual life, customer is it.

Paul Polson, talks about today’s capitalism and how it has to be flawed, when it cannot be inclusive, when the poorest 3.5 billion people make less money than the richest 85 people, 1 billion people go hungry and we use 1.5 times the resource availability in the world. Do we wonder about sustainability?

Lynn Stout talks about value destruction for employees, taxpayers and society, but shareholders too through a relentless focus on share price which can hurt not only the shareholder but also the enterprise. Instead of thinking the purpose of a corporation is to create and delight customers, it seems CEO’s think the purpose of a customer is to increase shareholder wealth.

Lynn calls this “shareholder capitalism” which is robbery.

She says companies have to think of enterprise prosperity versus profit of shareholders. Hence customers have to be nurtured and must be at the center of the firm for the sake of the enterprise!

Conscious business is similar in thinking: Conscious Businesses focus on their whole business ecosystem, creating and optimizing value for all of their stakeholders, understanding that strong and engaged stakeholders lead to a healthy, sustainable, resilient business.

They recognize that, without employees, customers, suppliers, funders, supportive communities and a life-sustaining ecosystem, there is no business. Conscious Business is a win-win-win proposition, which includes a healthy return to shareholders.

During the last century as capitalism concepts grew, for the most part the professional manager viewed himself as a caretaker responsible for taking large public enterprises towards crating benefits for shareholders, employees, customers and society.

Unfortunately linking managerial wealth to short term profits has changed some of this thinking.

Lynn Stout talks of short term gains that have harmed companies. She cites that in the name of increasing shareholder value, public companies have sold key assets (Kodak’s patents), outsourced jobs (Apple), cut back on Customer service (Sears) and research and development (Motorola), cut safety corners (BP), showered CEOs with stock options (Citibank), lobbied Congress for corporate tax loopholes (GE) and drained cash reserves to repurchase shares until companies teetered on the brink of insolvency (much of the financial industry). Some corporations even used accounting fraud to raise share price (Enron and WorldCom).

Public companies employed these strategies even though many executives and directors felt uneasy about them, sensing that a single-minded pursuit of higher share prices did not serve the interests of society, the company or shareholders themselves.

Thus short termism harms shareholders!

In fact corporations are legal entities, with shareholders having a contract with the corporation as owning share of the stock.

The corporation must fulfill its higher value creating purpose. And for this they need a Conscious Culture that fosters love and care and builds trust between a company’s team members and its other stakeholders.

Conscious Culture is an energizing and unifying force that truly brings a Conscious Business to life. Polman talks about the change in the shareholders as Unilever moved towards long termism. Stock price volatility reduced, and long term prices increased.

Lynn Stout states that it is time to recognize that the philosophy of “maximize shareholder value” is just such a defunct economist’s idea. Let’s throw off our intellectual chains so our corporate sector can do a better job for shareholders — and the rest of us too.

This according to Polman requires different leaders requiring skills such as the ability to focus on the long term, to be purpose driven, to think systemically, and to work much more transparently and effectively in partnerships.

He reiterates that long term thinking gives increased profits, and it also means you have to work to annual goals and meet them over the long term.

Sustainability, like not buying products from companies that rely on de-forestation to produce edible oils is a stand taken by many companies.

This focus on sustainability is reaching a critical mass that will reduce deforestation and improve the eco-system.

This is an example of a higher purpose of an organization.

So the CEO has to decide whether his role is to make short term profit to the detriment of everything else.

He has to determine if his bonuses are more important than longevity.

He has to decide whether he is good enough and smart enough to create value for all stakeholders while expounding a purpose for the corporation leading to long term growth and wealth.

You have to create a company culture as Zappos did.

Culture is about purpose. Culture means that the employee and customers come first. It is about building a relationship with employees and a Like-Like experience for the customer (all positive).

Polman says people are proud to work for companies with a purpose and the culture that employees, customers and sustainability come first, and they love a company that is prepared to make a difference and improve the quality of life…

If it works for Zappos and they grew exponentially with the employee/customer culture, so can you.

Your comments are welcome!

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transform the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

Whom do I work for?

If you work for a company, whom do you really work for? Or whom should you really work for?

Ask an executive this question and the answer will be for the company or the boss. However, when you dig deeper, we find that executives and employees typically think of the three main pillars of a company

The investors (represented by management)

The customer hopefully represented by you (the employee) and the management

The employees (managed by the managers)

If you were in Japan you would have said you worked in a family, the family being your company. This system was based on three precepts, lifetime employment, seniority-based wages, and enterprise-based unionism. To these, a fourth precept was later added: community consciousness within the company, one based on vertical relationships, reciprocal obligations, and decision-making by consensus.

However, in the Western world, we have to decide whom we work for.

Today, it is becoming clearer than ever before that we really should be working for the customer. But the reality is we work for our bosses.

In a survey, we found that 90% of the employees said the customer comes first, and managers should work for customers and employees. Managers, on the other hand were evenly divided on the investor and the customer coming first.

Perhaps there is one more pillar we should work for. This fourth pillar is ourselves.

Thus working for ourselves (looking out for oneself), or creating value for ourselves should become an important part of our thinking.

If management is focused on adding value for the employees, then this fourth pillar all but disappears, or becomes a smaller aspect.

So let us re-ask:

Whom are we working for? Investor, Customer or Employee

Thought 1

Does the customer really come first to you or are you just saying this because this is the fashionable (politically correct)?

Ask yourself, when push comes to shove who comes first the company (read investor) or the customer; or the boss or the customer?

The answer is pretty obvious.

Then why do we pretend? Or are we forced to pretend? Or is the company not truly in sync with the customer? Or is it mouthing the right words but doing the wrong things?

Thought 2.

Maybe some CEO’s and executives will say all three, employees and customers and investors are equally important. Maybe they are symbiotically attached and one cannot function in the absence of the other? Or the three are the necessary pillars and the foundation for success (however described).

If you believe this, then you have to ask if truly you are not veering towards one or the other.

You have to ask if you have independent programs focusing on each one of these pillars.

Will this continue even when there are problems with one of the pillars (or focus, and generally on the investor).

So the moment financial results falter, the focus on employees and customers, goes away, the spending and effort on customers and employees is reduced.

So one pillar is favoured over the others.

Why? Does the investor think he is most important? Or is it the CEO deciding that he must focus on the investor to get his bonus? Or is it because the investor does not get proper and sufficient data on employee and customer assets? Or that the CEO does not have this data?

And therefore the investor and the CEO thinks customer and employee data are not as important as financial data?

You, CEO’s and investors have a lot to learn and do! If you don’t you will not change, and will not create value. You have to start looking at your company culture as Zappos did. Culture is about purpose. Culture means that the employee and customers come first. It is about building a relationship with employees and a Like-Like experience for the customer (all positive).

If it works for Zappos and they grew exponentially with the employee/customer culture, so can you.

Whom do you work for?

Your comments are welcome!

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transform the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

Training vs. Mind-set in Value Creation

What we want to create is a H2H environment in our company and with our customers and partners.

Is it the mind-set or the training that is more important to our Customers and in Value Creation?

While both are extremely important, I believe mind-set changes are overlooked, not because they are not important, but because conventional training does not focus, indeed is not capable of changing mind-sets. Often it is said training is for dogs (sit, bark, roll!) and education for human beings. Mind-set changes are best impacted by self-introspection.

Why do customers get angry? Why are they happy? What is my role in the customer behavior? Realistically, to change mind-set, we must first build the self-esteem of people.

Once we have done this, we will find they are more open to ideas.

Then, we have to build their awareness, which will allow self-evaluation, and self-improvement.

Once we have done this, we can embark on a Continuous Customer Improvement Program (CCIP) led by front facing employees, not executives. We also let the front end employees examine the Customers Bill of Rights. We ask them to comment on how they will ensure this will work and what support they need.

For making this happen, we start Customer Circles, which are led by front facing employees working with Customers and on the CCIP.

During the Customer Circle sessions, these employees will also figure out how to keep the promises made by the company and its Bill of Rights (and also by the employees).

This leads to massive mind-set changes and taking over of ownership of the Customers by the employees. This also means a change of mind-set of the bosses, to let go and instead of always telling people what to do and training them. The bosses then let the employees tell them what the employees are going to do and what help they need from the bosses.

(As an aside, people are more likely than not, told what to or not to do.

As children, we are told not to reach for the cookie jar, we are told to wipe our faces, not to put our elbows on the table, not to talk with our mouths full, to eat the spinach, and, and, and and. This continues in school, when teachers tell us to stand up and say ‘Good Morning, Teacher’, or to do our homework.

Being told what to do continue at work.

Our boss says you will see four customers today. Why would you see a fifth Customer if you had time?)

As mind-set changes occur, we also have to ensure that the employees understand the mission of the company and whether they understand the importance of and how the mission can guide them.

Earlier, I mentioned that for executives to work on mind-set changes, they too have to change, and learn to let go, and let the employees handle Customers. The executives have to learn that they have to stop directing and ordering (and saying thou shalt…), but actually providing a supportive platform for the employees to perform.

Another reason for not working on mind-set changes is that we tend to manage what we measure….the tangibles.

We have difficulty in working on intangibles because we cannot measure them. We have to learn what is important to Customers, not measure only things that companies wish to measure.

What does a Customer want from a billing process? Accurate bills that are easy to correct if they are not accurate. What does a company wish to measure? Are the bills being paid, and Past due payments. These do not measure the Customers concerns. Worthwhile to measure is percentage of wrong bills, and percentage corrected in one call.

Chip Conley (founder of Joie de Vivre Hotels and author of the New York Times bestselling, EMOTIONAL EQUATIONS) uses the Maslow hierarchy to describe this. He believes Survival, Success and Transform is the Maslow for the corporation. Transform leads to mind-set changes. I believe at Customer Value Foundation, that success often means doing your job and Value Creation means going beyond your job to transform.

I have a number of stories of wonderful experiences in airlines and hotels and in other service renditions and I also have a number of horrible stories. I am sure you, the reader has similar great and horror stories.

Why is there no consistency? Is it the training or the mind-set? I believe with mind-set changes, the number of horror stories will go away. The routine experience we get as Customers is based on training. But when there is a crisis mind-set has to creep in.

Top on my horror stories is when employees feel that their role is to protect the company. The company is always right.

And so they lie. They say that (not in so many words) it is not our fault (implying it is the customers fault). Horror stories include not wanting to help the customer especially during crises hiding behind policies and rules.

An example is when I was downgraded in Brussels on a flight from New York changing planes in Brussels for Delhi, I was told we do not know the rules for a partial refund for a downgrade! Or when we want your money for a flight, you have to pay at once (and no refunds) but when we have to refund, our rules are 30 days.

Don’t companies know this is not right? Do they care or don’t their mind-sets allow them to change?

Customer service departments are trained to solve a customer’s problem. When they solve a less than usual problem, their mind-set does not allow them to initiate a systemic change so that future customers will not face the same issues. Examples of Tata Sky when you want to change an annual plan, you cannot do so without closing and reopening the account. Why can’t their system allow the change of a set box serial number? For or without a fee?

But these companies feel they have a customer centric mind-set, and the Customers do not agree. In fact 56% of all companies feel they are Customer centric and only 12% of Customers agree. Whose mind-set needs to be changed?

One mind-set I wish to change in companies is to get to Zero Complaints.

Executives are ‘trained’ to believe that Customers will always complain and so they cannot move to Zero Complaints (or at least attempt to get there).

They are trained to forget they too are Customers, and training transforms them from being Customers and behave like and become executives! The executive mind-set is often not a Customeric mind-set. And if they start to think like Customers, the conversation they will have is Customer to Customer, not B2C.

Most of us will agree It is true that intangible of happy employees builds the tangible of business success. Moreover while we cannot always make everyone happy, we can set the environment and mind-set to try to make everyone happy

What counts?  H2H: human to human!

Your comments are welcome!

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transform the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

Chief Value Creation Officer (CVCO)

I have been writing about Value Creation. I was asked to define the Chief Value Creation Officer by my readers. I found companies that have Chief Value Officers, trying to improve the Value of the company or the Value to the Investor. The typical way is to decrease costs, and increase market share thorough product proliferation or pushing into the marketplace through price, and through the distribution system. Very few look further into the companies, to see if the company is adding value to the employee and externally to see the value created for the customer (rather than looking at the customer as a sale). A CVCO is more than a Chief value officer.

Keep in mind that the company is dependent on three major stakeholders: Investors, employees and Customers. All three are necessary for the establishment and wellbeing of the company.

People will argue that we do not need one more C level officer. Others will maintain that value creation is the CEO’s job or everyone’s job. Why we need a CVCO is because a business and cultural transformation is necessary to become the best and to create the most value for the investor by creating value for employees and customers, and by making value creation the main role of an executive.

This is why I have written up what a CVCO should do. Please feel free to suggest changes and improvements.

1. Show executives that Value Creation is the main role of an executive.
   1. This means going beyond just doing your job, or being an efficiency expert or just a good administrator
   2. Becoming aware of Value Creation and Value Destruction
   3. Educate employees and give ideas on Value Creation
   4. Share the Value Creation done by one person/department with others
2. Build a Value Creation culture
3. Ensure there is a Chief Employee Value Creator, and create value for the employee
   1. Measure the Employee Value Added
   2. Incorporate Value addition for employees
   3. The role of HR should change to create value
4. Increase the Value Creation for customers
   1. Is the Chief Customer Officer effective?
   2. Build a Customer strategy
   3. Measure Customer Value added
   4. Increase value to the Customer
   5. Break organisational silos
   6. Ensure Bill of Rights is honoured
   7. Incorporate Customer Circles and a Continuous Customer Improvement Program
   8. Improve awareness and proactiveness of front line people
5. Ensure Value is being created for partners, supply, delivery chain and unions
   1. Involve all departments
6. Look at Value Creation for society, and for sustainability
7. Measure the Value created for investors and Value created for employees and Customers. Ensure you focus on loyalty increase leading to market share and higher profits. Understand the cost savings by becoming more efficient for the Customer and because you make fewer mistakes
8. Ensure reporting of financial measures, employee value added and Customer Value Added (including employee assets, customer assets) with quarterly results and to Board of Directors

Ideally, the Chief Value Creation Officer should be on the Board of Directors because he cuts across all functions of the companies, and is charged with improving their working and effectiveness, and in impacting the company culture.

Your comments are welcome!

Call at (+91) 7838333300

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transform the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

The real sources of value: Assets and Performance

Companies tend to focus on financial assets and financial performance. They measure every aspect of these, and in known periodicity. They report these internally and externally, and are pleased that they are following the really important factors for the company’s success and future wellbeing. These people are sometimes called bean counters aka finance people. They also track investor assets because they feel they have to compete in the market place for the investors’ capital.

Because of this focus, the company loses track of other important assets, and do not get the bean counters to track them well:

Employee Assets

Customer Assets

Partners as assets

Social Assets

Intellectual Property, knowhow, and innovation assets

Brand Assets

Value Creation Assets

Investors as Assets

Note you could use the word Capital instead of assets, although I prefer assets.

Just as an aside, traditional assets in a company have to be maintained. There is a maintenance and depreciation plan for them. Plant and machinery, mobile phones and laptops, furniture, buildings.

The other assets mentioned above are not always maintained well. In fact many of them can appreciate in time (unlike physical assets that might depreciate), unless an employee leaves or a customer leaves. There are poor maintenance plans for them: Just enough for them to stay on and perform. In fact we are more interested in the performance than in the asset itself.

Non-financial assets are often shrugged away as intangible, difficult to measure (and therefore difficult to manage?) Or is our management and focus inadequate? Some will even say these intangible assets form 80% of the investor’s focus of the company value. So if we cared about our investors assets we would care about the non-financial or “soft” assets (and make them as important as “hard” assets).

I think most people understand the various intangible assets and broadly know how they are defined. Value Creation assets are less well understood and developed. Your value creation assets exist in:

Plant and machinery assets: you will certainly overhaul your manufacturing capabilities and watch, analyse and revamp them to create more value

Product offering assets: You work on creating products that will create more value

Employee assets: You create value for employees in order for them to create more value and you invest in teaching your employees assets to create more value for the customers, the partners and society and thereby for the company. You set up an environment conducive to, and encouraging value creation (for example value creation councils)

Customer assets: How do you create more value for the customer, thereby increasing loyalty, market share, prices and profit assets?

Social assets: Where do you put funds that your customers perceive as adding value, thereby making them prefer your company more than competition? Do you understand how Values create value for the company? Values include trust, honesty, and loyalty (to customers), sustainability, safety etc. How do you get employees to create more value here?

Brand assets: As value creation increases, brand assets increase. Value creating employees have brand equity that increases the brand assets of the company

Innovation, proprietary information, know how, intellectual property assets: Value creation in the minds of the employee increases these assets, because they work consciously to create innovation and value

Do your investor assets really know about these intangible assets and the true value of these and how you are growing these, resulting in value for your company? Can shareholders really judge the true source of value creation? Are you giving them the tools to do so?

And are you putting the tools into place to create and measure value: the processes, structure and the organisational skills to do so. Are you creating value for the employees? Do you have a Chief Employee Value creator? And do you have Value Creation councils to bring to the fore Value creation by employees for themselves, their colleagues and other employees, their customers and society? And can you measure this value creation, and the increase in assets and performance? Do we have the competences to create more value, and to encourage value creation?

So let us encourage Value Creation Councils. Let us report our intangible assets and its performance as much as we do the financial performance.

Your comments are welcome! 

Call at (+91) 7838333300

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

Customer Value foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transform the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

Example of Value Creation in Education

Example of Value Creation in Education: At the Michener Center, U of Texas, Austin 

As many of you know, I have been writing about Value Creation in education. Much of the discussion has been generic. That the role of a teacher is to go beyond just imparting knowledge but to create value by showing the student how the knowledge is used by others, what they do with the knowledge, and how the student can use the knowledge and benefit from it and enhance his environment (employer, society etc.) 

A few days ago I had the privilege of witnessing this Value Creation in action. This was at the Michener Center at the University of Texas at Austin. The Michener center has assembled brilliant talent in fiction, screenwriting, poetry and playwriting. Students in the MFA (Master’s of Fine Arts) were graduating, and the graduating class spoke about their amazing, life changing experience. 

The one thing all those graduating said was that the teachers and staff just gave and gave and the students just took and took. The giving was selfless. I wondered what value was being created for the teacher. Was it just satisfaction? Was it more, the pleasure of helping people become creative and successful? And I remembered my article that creative people did not need incentives for creating and helping others create value. Incentivisation does not increase creative power, but may create the environment (like the grants to the students). But the teachers were not incentivized by higher salaries for creating the value they did. They gave because that is the nature of secure and creative people to create more value, and to get satisfaction from doing a better job than others. 

The students went on to talk about how their fellow students created value for each other—by example, when they wrote or did something well; by witnessing the disappointment and disillusionment and the lows their fellow students experienced, and helping each other to get going and try again; by giving emotional support. Much like what the teachers gave them. 

The teachers gave them the enthusiasm, the secure environment, the emotional strength to go through the winning and losing, and helped them manage the emotional highs and lows. The staff gave them emotional support in their private lives, their special needs etc. and a sense of being part of a family and being at home. 

But what was common was building the sense of security in the students, when they felt insecure, inadequate and unable to cope, or unable to find that whiff of genius that could help them with a flow of brilliance, and happiness. 

What struck me were the enormous emotional bonds that the students had formed with the teachers and their fellow students, the gratefulness to them. Many cried, as they related their story of growing at the Michener Center. 

I had written earlier about the need to be secure to create value. Insecurity can come from when you are growing up or in your work or personal environment.  And so the teachers and staff created the environment for fostering talent and security. 

One teacher told me that the students were inherently talented, and the teacher’s role was to make the student use the talent and grow. An environment of trust, of belonging, of self-belief, of relying on colleagues and helping each other (creating value for each other), by building emotional strength and bonds helped the students rise to their inherent abilities. And that is what the teachers did. They also helped the students to unlearn so that they could learn faster. 

And the importance of unlearning and learning and unlearning. 

So this is an example of Value Creation in education by teachers and students, and how you too can create value. 

It is not incentives! It is not self aggrandizement that makes creative teachers create value. The students too will realize that their creativity will flow despite incentives or lack of it…and as they grow, they will find that if they can create value for their readers, by getting them to learn, or to get an emotional bond with the writer, or making the readers feel good about themselves. Then the writer will become even more successful. 

As one teacher said, when you leave, walk backwards so that it appears you are coming in. Or that you are still with us and you belong. 

And when you walk away, ask if it is the experience or the memory of the experience that was more important. 

And if you as students and teachers consciously start to think of value creation as your role, you will find that all of you will enhance your offerings because now you have added yet another dimension to your creativity and work. 

Will you, the student become a value creator? Will you use the special ability the teachers helped you find and hone to become value creative writers? 

With special thanks to some unusual value creators: Jim Magnuson, Elizabeth McCracken, Michael Adams (all of whom I met), the other students and staff of the Michener center. 

Your comments are welcome. 

Call at (+91) 9971288580

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@customervaluefoundation.com
website: http://www.customervaluefoundation.com

Customer Value foundation (CVF) helps companies to Create Value and profit by Creating Value for the customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transform the entire company to focus on Creating Value for the customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

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