Jun 3, 2024

Create A Winning Organization Through a Unified Value Creation Cycle

Terry Danylak Strategy 5 minutes

What is a winning organization? It is one that continually increases profit and market share through innovation and the delivery of value for its customers.

Apple is a winning organization, as are Google and Costco.

Without creating value or, at the very least, ensuring that current offerings don’t lose their value, organizations can’t win in the game of business or survive for a long time.

To win, you must develop a unified value-creation mindset in your organization.

Value is a result of scoring and defending.

To create value for your customers, you must develop two very distinct but connected mindsets.

A mindset of creating new value is like scoring goals in a game of soccer. To win, you must score more goals than the opponent. A mindset of protecting existing value is like defending in a game of soccer. To win you must also prevent your opponent from scoring in your net.

While most leaders tend to adopt one or another mindset, it is critical to remember that value results from both scoring and defending.

So, how can you help your organization develop a unified value-creation mindset?

  • Recognize the existing value mindsets.
  • Introduce the unified value-creation mindset.
  • Communicate the expectations to all leaders.
  • Developed focused priorities.
  • Plan, execute, evaluate, repeat.

Let’s break down each of these ideas.

Recognize the existing value mindsets.

There are two types of value mindsets. A creating value mindset and a protecting value mindset.

A creating value mindset has growth and progress as its foundations. Those who continually think of new ideas, new products, and new opportunities have this type of mindset.

A protecting value mindset has preservation and efficiency as its foundations. Thos who continually think of how to improve existing processes, and minimize errors and mistakes have this type of mindset.

Both mindsets are valuable for the organization because value is created on both sides of the spectrum.

Introduce the unified value-creation mindset.

To win in the game of business, you must combine these two mindsets and introduce another variable into the mix.

Organizations often segregate people with creating-value and protecting-value mindsets. But this is a disadvantageous approach. Value can be created by combining both mindsets and finding new innovative solutions to existing problems.

Introduce the unified value-creation mindset, where both sides of the table can collaborate and create value. To make this work well, create an innovation team that combines people with both mindsets.

Remember, winning is about both scoring and defending.

Communicate the expectations to all leaders.

It is not enough for you to announce the new unified value-creation initiative. It is important to communicate your expectations to all organizational leaders.

Leaders should:

  • Monitor value-creation activities.
  • Identify new areas to experiment with and find new value.
  • Align their behaviours with value-creation goals.
  • Connect value-creation to performance evaluation.

A unified value-creation mindset begins with leadership.

Developed focused priorities.

Focus is paramount to success. Trying to create value in all parts of your organization will lead to unfocused efforts and failure later on.

You should:

  • Find a few key areas where value can be created.
  • Develop a plan to extract value through unified value creation.
  • Focus limited resources on these areas to get the highest value ROI possible.

Focus is paramount to success.

Plan, execute, evaluate, repeat.

Once you have identified your value creation priorities, it is time to execute.

To win, you must create a unified value-creation cycle where you do the following activities:

  • Plan - identify value creation areas with the highest potential and ROI
  • Execute - create innovation teams focused on the creation and protection of value and execute the plan.
  • Evaluate - review results, make decisions and adjust according.
  • Repeat - repeat the process.

Value creation is a never-ending cycle. To win, you must continually create value for your customers.

Today’s Action Steps

Here’s how you can act on this advice today:

  • Identify members of your team who have a creating-value mindset.
  • Identify members of your team who have a protecting-value mindset.
  • Bring them together for a day of brainstorming.
  • Ask them to identify two value-creation areas with high ROI.
  • Ask them to identify two value-creation activities per area.
  • Create a plan and task the team to execute it.

It’s as simple as that.

Outro

A winning organization continually creates value for its customers. This value can be created by creating new value or protecting existing value.

To win in the game of business, you must do both. You must score, create new value, and defend, protecting existing value.

And that’s all for this week.

See you next Monday.

P.S. I’d love to hear what challenges you are facing in your business. What can I write about to help you personally?

Reply back to this email to let me know.