Saturday, September 16, 2006

Value Creation

Value creation is really a driving factor in so many parts of life... and in business it is no different. Something really isn't worth doing/spending time or money on, etc unless it is going to be a benefit and create value for the company.

That is both a good and a bad thing. For one, the concept of getting the most "bang for your buck" has resulted in much outsourcing and offshoring in the past few years. Are those companies more productive overseas than those in the US? No. What they are is less expensive and really if somebody can build a product overseas and ship it here for less than it would cost to build it here, then they are going to do so. Anybody that plans to not try to compete in this way had better have a strong niche market that is focused on their products. Say Harley Davidson for example. People around the world love Harley, the image it creates, and so on. They can still be competitive paying a premium on wages and parts.

However, most companies don't have a product that sells in that manner, and having a competitive price is a factor. If it wasn't, why would Dell be putting out desktops for $450?

So the questions that I have to ask myself are:
  1. What kind of value do I bring to an organization?
  2. How can I grow to provide more value?

When I answer these questions truthfully, it first of all lets me see just how important I am to my company (because if I don't bring value, why am I there?). Or unimportant, if I'm not producing. Along with that, it also tells me if I am doing what I need to be doing with the company. If they hired me for X and that creates value for them, if I find myself doing more of Y which they find less important than I need to go back in and refine exactly what it is I am doing to bring myself inline with what they need.

That is one of the values of using Six-Sigma, and well, several other quality methodologies. They point you to the customer and their needs. Where you go from there is an effort to meet their needs, and not what you view their needs to be. You can create the most amazing product, process, etc.. and if it isn't what they wanted or needed, what real value have you created? You haven't, and those of us with grandiose thoughts and ideas need to keep them to ourselves if tapping in to them won't bring an additional value play to the customer (internal or external).

I'm digressing a bit. The main point is value creation, and what it is that you do for your company. This is a busy world and we have so much going on that it is easy to forget what our priorities are. It is never wrong to spend a little while and think about what your purpose at work is (from your companies perspective..) and determining just how well you are accomplishing that.

4 Comments:

Blogger Charles-A. Rovira said...

You comments on this post addresses the dichotomy of being "market facing" versus being "innovative."

Six Sigma will let you design, or make that refine, an existing product to tighter tolerances.

But it won't do a thing for you if you don't already have an existing product for an existing customer base.

Innovation is the other side of the same coin potentially applied to every stage of the product, like an MP3 player, and the product production process, like Dell's supply chain management.

What makes for a great company and a great corporate enmvironment is the interplay of restriction versus innovation over the entire output.

Most companies excel at only one area at the expense of the others.

Thus MP3 players are iPod and the also rans."

PCs are iMacs, MacBooks and MacPros and the also rans.

Cars are the Prius and the also rans.

Its not Dell is incapable of creating a great supply chain. They clearly are.

Its not that Pinafarini or Rolls Royce or Bentley are incapable of creating a great car. They surely are.

But they are missing the art and science of designing a complete corporate system.

9/16/2006 12:03 PM  
Blogger Justin said...

Hey Charles, thanks for dropping by. I appreciated your well thought out post and the ideas that it expresses.

Would you say there is an absolute dichotomy between being market facing and being innovative?

Thanks for the posting. I noticed your blog on MS... my Aunt has MS and I've seen its impact on her life. I enjoyed reading through your blog, best wishes!

9/16/2006 1:53 PM  
Blogger Charles-A. Rovira said...

I would say that its a more a case of absolute schizophrenia.

As human beings we have yet to face the fact that things always change.

Our reaction to that change has filled the pages of Shakespeare as much as those of the morning paper.

We demand certainty in an unsure world (and that unsureness extends down to the very quantum.) How else can you explain the existence of religion.

Of course, we get righteously angry when the universe goes on expanding without asking us.

The same irrational impulse that drives jihadists to blow themselves up in crowded marketplaces is what drives most of the marketplaces.

For the most part, we do not reward producer behavior that destroys value by introducing any kind of novelty.

But our consumer behavior tends to be exactly that.

And in a well ordered society, we are both the producers and consumers of the things we sell (for as much as the market will bear) and buy (for as little as we can pay.)

For the most part true novelty is hard to come by and seeing it applied wisely is extremely rare.

The real successes are those people who ran ride the shockwave and surf from yesterday into tomorrow.

Unfortunately, that wave is the very same tsunamy that drown villages full of unfortunates.

Enough mixing of metaphors. We're all nuts. Deal with it. :-)

9/17/2006 9:12 AM  
Blogger Charles-A. Rovira said...

Say "Hello" to your aunt for me.

And tell her she's doesn't need an iPod to listen to my show. :-)

And my demographics are so screwed up by now that you don't even need MS to listen to it either.

Yes, I'm "Charles-A. Rovira, podcaster."

Building an audience the old fashioned way; one listener at a time.

9/17/2006 9:29 AM  

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