Whether explicitly or simply by default, your company most likely tends to focus on one of the three Value Disciplines described by Treacy and Wiersema: Customer Intimacy, Operational Excellence, or Product Innovation. I took a rather hard line in this post, “Hybrid Strategy Management”, advocating for a more balanced approach (especially in the B2B market), but the evidence of success for those firms that have chosen to dedicate themselves to one of the disciplines is undeniable. And as the authors have themselves noted, the value disciplines are meant to be a viewed as a primary focus, not an exclusionary approach.
For example, customer intimacy is often the value discipline of choice, if only as the slogan – “We’re customer centric”. It’s easy to get so narrowly focused on the sales and marketing aspects of customer relationship management that we forget how components of the other disciplines can be brought to bear in support of this strategy. Knowing your customer, through Customer Intelligence, is a good start, but don’t forget all the downstream activities, like warranty processing, call center management and after-market service and sales that make you and your product unforgettable in the customer’s mind.
Likewise, it would be good practice to identify, amplify and integrate those elements of the other two disciplines that can specifically address and support your primary discipline. In the case of Customer Intimacy, what aspects of Operational Excellence and Product Innovation should you integrate into your customer centric strategy? From the operational excellence side, quality and manufacturing flexibility should certainly be top of mind. As for product innovation, design for serviceability, sustainability, and the user interface would be among the most important aspects that enhance the customer experience. Also, building an effective customer input and feedback loop into product design might just be the customer connection you are looking for.
Switching strategic focus from the customer to the product, quality would again seem to the main contributor to innovation from the operational excellence track. Getting customer support for innovation may be a function of brand management and even social media.
Lastly, a strategic focus on operational excellence and low cost production would clearly require product designaspects that emphasize manufacturability and cost avoidance. As they say, it’s a lot harder to reduce costs once the product is in production than it is for engineering to avoid those costs in the first place. Getting customer support for operational excellence can be a daunting task if “everyday low price” is not already your corporate message. Setting and managing customer expectations for quality, feature/function or after-market service can be a challenge when there are so many other consumer choices available, which means that nurturing brand loyalty can have big payoffs when it comes to price wars.
The key take away here, of course, is strategic alignment. The strategic decision to go with one particular value discipline over the others means that you need to get the entire organization to fall in line behind that decision. You can’t be having R&D, out of habit, training and nature, packing in ever more features and complexity when your customer-centric strategy says that a simple, friendly user interface or experience is the focal point of your marketing and business strategy. Likewise, nor can you afford for operations to be continually gearing up for long production runs when your customer relationship strategy depends on responsiveness.
Whether you choose to call yourself customer centric, smoother operators, or innovators, any one of these can provide a sufficiently powerful vision around which to rally the organization, but to succeed requires that the entire organization align behind the chosen strategy – it’s why they call it value “DISCIPLINE”.
By Leo Sadovy, EPM Contributor, from: http://blogs.sas.com/content/valuealley/2013/05/28/alignment-with-your-value-discipline-strategy/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ValueAlley+%28Value+Alley%29
Leo Sadovy handles marketing for Performance Management at SAS, which includes the areas of budgeting, planning and forecasting, activity-based management, strategy management, and workforce analytics, and advocates for SAS’ best-in-class analytics capability into the office of finance across all industry sectors. Before joining SAS, he spent seven years as Vice-President of Finance for Business Operations for a North American division of Fujitsu, managing a team focused on commercial operations, customer and alliance partnerships, strategic planning, process management, and continuous improvement. During his 13-year tenure at Fujitsu, Leo developed and implemented the ROI model and processes used in all internal investment decisions—and also held senior management positions in finance and marketing.Prior to Fujitsu, Sadovy was with Digital Equipment Corporation for eight years in sales and financial management. He started his management career in laser optics fabrication for Spectra-Physics and later moved into a finance position at the General Dynamics F-16 fighter plant in Fort Worth, Texas.He has an MBA in Finance and a Bachelor’s degree in Marketing. He and his wife Ellen live in North Carolina with their three college-age children, and among his unique life experiences he can count a run for U.S. Congress and two singing performances at Carnegie Hall.