More customers at higher prices. That’s the promise of a value-based strategy. That’s what you want.
You’ve tried some of the quick fixes. You’ve sent sales to value-selling seminars. You’ve incentivized them to hold out for higher prices. You’ve told marketing that they need to make sure the company’s products are value-added, even though nobody can agree on exactly what that means. It’s not working. Results remain mostly unchanged.
If you want to consistently enjoy the commercial success promised by a value-based strategy, there are no quick fixes. Your whole organization must align to create exceptional customer value and then extract fair compensation for that value. If you want your company to adopt a value-based strategy, you need to approach it with the same seriousness that you’d apply to any major organizational development effort.
But serious doesn’t have to mean impossible or even impractical. You can get there by following these four steps:
- Develop a critical mass of understanding
- Assess the organization’s capability and determine development priorities
- Develop an action plan and implement
- Re-measure and set priorities for continuous Improvement
1. Develop a Critical Mass of Understanding
The most important thing to do when you implementing a value-based strategy is to get everyone on the same page. You’ll need two critical resources for this step. You need an owner and an expert. The owner is the person in your organization that will be held accountable for value-based strategy competency development. The expert serves as trainer, coach, and jungle guide for your value-based strategy journey. If you have an expert in inside your company, it is possible, even desirable that the expert and the owner are the same person.
Once you’ve identified your expert, have him or her facilitate the development of a common value-based strategy
- Expectation for roles and responsibilities,
- Framework for implementation and measurement, and
- Definition of the critical success factors.
Your owner’s job is to ensure that all the key stakeholders participate and develop the same baseline understanding of a value-based strategy. Those key stakeholders typically include:
- Business unit owners,
- Marketing managers,
- Product managers,
- Engineering managers, and
- Sales managers
2. Assess Organization’s Capability and Determine Development Priorities
With the organization aligned on the language and expectations of a value-based strategy, the next step is to assess the organization’s capability and establish improvement priorities. This is a critical step. Knowing where to start is just as important as knowing where you need to end up. To do this:
- Develop a capability assessment survey to measure key value-based strategy competencies (as established in step 1)
- Have all key stakeholders complete the capability assessment survey
- Interview all survey participants to further understand survey responses
- Seek and examine evidence to confirm (or disaffirm) survey results
Then compile the assessment results, summarize conclusions, and recommend priorities for capability improvement.
3. Develop an Action Plan and Implement
The process owner, value-based strategy expert, and the key stakeholders next need to identify opportunities to act on the assessment recommendations. Here’s the secret to making this work – Identify implementation initiatives that simultaneously produce tangible work-product and improve value-based strategy capability. Look for things that you already need to do that now need to be done in a manner consistent with implementing a value-based strategy. Things like the following:
- Opportunity analysis and validation
- Market requirements and product definition
- Marketing strategy development and execution
- Situation and competitive analysis
- Product strategy and roadmap development
- Voice of the customer market validation
- New product development and introduction
- Sales and marketing tools development
- Sales force development and training
Stakeholders own the initiatives. Your process owner and expert are their coaches and ensure value-based strategy concepts are applied.
4. Re-Measure and Set Priorities for Continuous Improvement
At the appropriate time such as after a round of initiatives have been completed, repeat the capability assessment to measure progress and re-assess improvement priorities. Keep repeating this process until defining, implementing, and improving your value-based strategy becomes an organizational habit.