Journal of Creating Value

This article reminds readers that the terms ‘value’ and ‘performance’ are used so routinely that we risk losing sight of their meanings, which results in a risk that Value Measurement and Performance Management become confused. A basic definition of value is provided—benefits minus costs—and discussed, making the point that tangible (rational) and intangible (emotional and social) issues must be taken into account. The work of Jean Baudrillard is referenced to help explain some of the complexity around buying value perceptions and decisions. A four-step process is outlined to help readers develop value assessments in a business context: (a) Value Hypotheses; (b) Sources of Value Flowcharts; (c) Value Word Equations; and (d) Value Models. An established means used by medics to evaluate pain is referenced to demonstrate the measurement of intangible factors. The information is then put into context with performance: What is Performance Management? And what does it mean for the multiple trade-offs that every business has to make every day? The article concludes with a summary and suggested action steps.

This article introduces an area of value creation seldom considered in the strategic sense in business: value creation from human connections. And given the number one reason for customers leaving a business is a feeling of indifference from a company representative, this is an area that holds a great opportunity for companies to really stand out from their competition. This article examines where business has come from, where we are now and why the critical need to revamp our way of thinking. When a company transforms into a customer-centric organization, a collective mindset to design for the desired outcome of customer emotion emerges. The context for thought is creating value for the customer and is expressed in changes to processes, products/services and people. When an employee transforms into being customer focused, the individual mindset of paying attention to how he leaves a person feeling begins to develop. This shift from task to the customer lays the foundation for developing human connection skills. Customer value creation becomes a common language of understanding with different expressions of it for company and individuals. The reader will discover why traditional soft skills training has failed to bring about lasting behaviour changes and offers an alternative, based on the insights provided in recent years from neuroscience.

A component of increasing value to customers is the interactions that a customer has with the seller both before and after sales transactions. However, many products do not include features within the design of the product that enable a continuing stream of interactions. This is not due to inferior work by design engineers. Rather, most requirements provided to development teams are product-centric and do not address the relationship interactions that occur between the seller and customer. There are no requirements for creating or enabling a steady stream of customer interactions. Development teams create designs based upon the requirements they are given. Product-development methodologies restrict the development teams so that the designs they create do not include features that are not found in the design requirements. Transforming design requirements to include these features will lead to a dimension of customer value creation that can be operationally managed for competitive advantage.

When companies try to become more customer-centric, one of the biggest problems has to do with aligning their internal systems, accountabilities and responsibilities with the needs and interests of individual customers. This ‘alignment problem’ comes in three different forms. ‘Alignment 1.0’ involves coordinating individual business units and divisions to ensure an enterprise-wide view of individual customers. ‘Alignment 2.0’ requires integrating the performance metrics at individual business units with customer-specific tactical goals. And ‘Alignment 3.0’, the most difficult issue, requires a company to reconcile customer-centric metrics, such as satisfaction scores, or the financial asset value of customers, to more traditional financial metrics of success, such as quarterly sales and profits, and shareholder value.

Even though marketers continue to plug away at measurement, marketing leaders still struggle with how to demonstrate the impact of marketing on business. Numerous studies have been conducted on the topic over nearly two decades. Is there anything new left to learn? There is, and as a result, this article shares the insights Demand Metric and VisionEdge Marketing learned from the fourteenth century annual marketing performance measurement and management study conducted with over 360 business executives and marketing professionals from around the world across all industries.

The study sought answers to three questions:

How much progress, if any, have marketers made in being able to measure contribution, value and impact?

Today’s market is being driven by continually accelerating innovation. Much of that innovation is being driven by the Internet, which has become a global platform for innovation and engagement. Through it we can connect people, processes, data, systems and devices faster, more effectively and more powerfully and innovate faster because of it than at any time in history. That capability and the innovation it enables are rapidly changing what customers value and are blurring the boundaries between how we create products and services as well as companies, and how we engage customers. Those changes are leading us into a market composed of digital ecosystems and intelligent products that anticipate and facilitate high-value customer/user outcomes based on the users context. To compete in the digitally transformed future will require not just understanding the technology, but also being immersed in the cultures creating it, and working collaboratively with customers and other participants in the digital ecosystems to identify and create new breakthrough value. For products and services to be competitive they must be highly personalized for users and contextualized based on their location and needs at the moment. Transforming your company into an organization that can compete and lead in that future is critical to your success. It requires a top-down commitment from your most senior executives. And it requires working collaboratively with your most visionary customers and partners to create a digital vision and a continually adaptive strategy and transformation plan. This article provides a series of questions and recommended action items to help you develop that vision and strategy and to help you become a vibrant part of that digital future.

During the last five years marketing underwent a sea change. It adopted more tools, applications and data than ever before. It is not unusual to see marketing teams use 70 software applications and publish hundreds of messages daily.

By their nature, digital marketers interact with millions of customers and prospects daily. Their work shapes customers’ and prospects’ perceptions of your products and services. In the Internet era, they are your frontline employees.

But recent studies point to a troubling gap: digital marketers believe their companies are only 34 per cent proficient (effective) at digital marketing. Which chief executive officer (CEO) would want efficiency if that creates a frontline function that, by its own account, is effective less than 50 per cent of the time?

Just like a CEO would work with their service, sales or manufacturing functions to improve effectiveness, they must also work with their chief marketing officer (CMO’s) to improve digital marketing’s effectiveness. To do this, a CEO must understand digital marketing’s levers, what does a best-in-class organization do and the steps their organization can take to become more effective.

This article presents the effectiveness of Mind Maps as a thinking tool and explores opportunities for using Mind Mapping to add greater value and effectiveness in managing projects. The article briefly explains what a mind map is and how it positively impacts key skills for managing projects. Four key avenues for creating value in projects are identified: Purpose (or Project Vision), People, Problem solving and Customer. The article puts forward the case for Mind Maps by sharing a real life case study and representative examples on how they can add value in areas mentioned above.

This article identifies the root cause of a group of wicked global problems which is lack of value creation from radical innovation that has existed over the last four decades. This article describes the essential part of a solution which is adoption of a new fourth generation of innovation management (4G) to emerge as best practice since 1900. 4G effectively enables radical innovation.

Radical innovation is required for sustained, adequate rates of economic growth driven by improvements in productivity, quality and cost in industries such as health care, education, construction and energy. As a result of inadequate radical innovation for decades, a group of major economic, social and environmental wicked problems , such as, income inequality and global warming, remain unsolved, and these problems exist in all countries including the United States. In his landmark book Capital in the Twenty-first Century, Thomas Piketty linked inadequate economic growth to income inequality.

A distinguished economist and professor at Northwestern University, Robert Gordon, has identified the current global situation as a period of potentially permanently stalled economic growth unless value creation driven by radical innovation is resumed at a level and with rates similar to what occurred in the three industrial/information revolutions since 1750.

Since 1900, there have been three separate and successive periods of time in which a new generation of innovation management was created and then adopted as best practice to replace, augment and improve the practices in earlier generations. The root cause of the global problem is that none of the three generations have been effective in creating an adequate amount of radical innovation which requires a new dominant design to transform (a) capabilities in organizations based on knowledge, tools (which include purchased products and services), technology and processes, (b) business models and (c) the structure of markets and industries.

4G is guided by 12 new principles and practices to effectively and efficiently create radical innovation based on new dominant designs while also improving the efficient creation of incremental innovation. Part 1 of this article describes 4G and the first four principles of 4G in detail. Another companion article, Part 2, will later describe the remaining eight principles in detail as essential part of a solution.

This article shows how a critical thinking perspective in teaching business cases can create value for students and educators. We introduce a free, online case emphasizing value co-creation in a consumer retail setting that was co-developed by marketing faculty at Illinois State University, Best Buy and IBM. The case focuses on the problems of showrooming (i.e., evaluating products in a physical store, but purchasing products via another channel such as online) and webrooming (i.e., researching products online, but purchasing the products in physical stores) that currently challenge many traditional retailers. The extent of the information created through the case videos of involved managers and other means encourage critical thinking which supports the achievement of higher order thinking skills in students’ business decision-making. The case further adds an additional value by (a) providing current summaries of the emerging marketing literature related to service dominant logic, value co-creation and customer engagement, and (b) engendering greater student engagement in learning. The case is freely distributed, and can be found at http://business.illinoisstate.edu/bestbuy/. Suggestions for extending and/or improving the case are encouraged.

Red tape, corruption, discourteous behaviour, lack of citizen focus and ease of doing simple tasks as getting copies of say, birth certificate, driving licence, vehicle registration and others, have been major areas of concern in governance. Recognizing this, the government initiated a regulation for ensuring time-bound public services called Sakala. This article examines reasons for its introduction, details of the scheme, its implementation, its effectiveness and the value it creates for citizens.