Tweet

Customer Value Creation In A Down Economy: Avoiding Near-sighted Strategy Mistakes

Guest post by: Joe Evans

Article Overview: A slow economy provides many challenges for business leaders, but that does not mean we throw out the baby with the bathwater. Despite the challenges, long-term viability of our businesses relies on keeping our strategy focused beyond the horizon-line. Chief executives must own the responsibility to stay the course on value-creation, championing the cause to maintain enthusiasm for innovation within the business organization.

Customer Value Creation In A Down Economy: Avoiding Near-sighted Strategy Mistakes



Officially, the recession ended two years ago. Don’t tell that to the U.S. manufacturing businesses who saw orders for airplanes, autos and heavy machinery decline in June, according to Commerce Department data just released this week. The anemic economic growth so far in 2011 is also effecting service firms, where they experienced their weakest growth in 17 months during July, according to the Institute for Supply Management. This sector accounts for 90% of U.S. employment. Odds are, your business is feeling the pinch and has made or is making adjustments to accommodate for slower sales.

Keeping The Lights On During The Recovery

A slow economy provides many challenges for business leaders, but that does not mean we throw out the baby with the bathwater. Yes, most executive leaders are battling pressure from boards and investors to implement quick fixes that will keep IBITDA on target with projections. Others are tapping into innovation and R&D dollars to fund operations with already allocated monies. There are limited marketing dollars to go around and sales numbers...well, let’s not even go there.

Despite the challenges, long-term viability of our businesses relies on keeping our strategy focused beyond the horizon-line. The recession and painfully slow recovery has put tremendous pressure on virtually all organizations, and as a result, strategy investment towards customer value creation has slipped into second place behind overhead reduction plans in order to reach a bottom-line targets and performance objectives for some businesses. This is short-sighted in terms of maintaining a competitive edge and almost certainly was not what your organization's strategy prescribed. For forward-thinking executives that want to do the right things (yet would like to remain employed), this creates an internal struggle about managing this dichotomy.

The conflict relates to the struggle of maintaining balance between internally focused overhead reduction strategy goals on one side and those related to the creation of customer value on the other. In recent years, corporate planning became overly focused on creating shareholder value, sometimes to the exclusion of customer value. This creates a gap which serves to allow market share to be taken away by more nimble competitors in your space -- those focused on creating a better value proposition for their customers and planning accordingly. The gap represents a huge risk; a potential loss of competitive advantage.

Chief executives must own the responsibility to stay the course on value-creation, championing the cause to maintain enthusiasm for innovation within the business organization. That does not mean that operational costs cannot be streamlined. The key to a balanced approach is to avoid focusing too heavily on cost removal. After all, margins can be improved through value creation programs, still effecting EBITDA positively.

Focused Spending On The Right Strategic Initiatives Will Create Value

With the corporate mission statement as a guide, the planning process can be adjusted towards viewing strategy and goals in terms of key customer outcomes.

• How can the organization increase the efficiency of customer interactions?
• How can we improve the cost-effectiveness of our product or service?
• How can we develop better customer intimacy and grow customer loyalty?

These are but a few examples of questions that should be triggered when thinking about strategy with a customer key outcome mindset. With the central themes being customer value creation, customer acquisition and customer retention, chief executives should work with their boards to garner support for long-term thinking and not knee-jerk cost cutting. Even if that means keeping spending at prior year levels, strategic investment is an imperative.

This translates into:

• Investment in projects to improve staff productivity
• Investment in projects to make business processes more efficient and cost effective
• Investment to promote innovation

All of the above can mean cost-effective delivery of products and services to the business’s market and improvements in quality and function that put competition further behind in the rear-view mirror - despite a troubled economy.

---

For permission to use or reprint any portions of this copyrighted article, contact Method Frameworks at articles@methodframeworks.com.

About the Author:

Joe Evans is the President and CEO of Method Frameworks. Joe is a published author, frequent speaker and recognized expert in corporate strategic planning. To contact Method Frameworks about scheduling Mr. Evans about an upcoming speaking engagement, visit www.methodframeworks.com/business-speaker or email requests to media_relations@methodframeworks.com.

---

New Change Management PDF Download Available

Download our Guide to Change Management

Our guide to successful change management, called "Transforming the Organization", is a 17 page complimentary resource to help your organization initiate a successful corporate change management program, accomplish organizational transformation and make it stick.

In this change management guide, we cover the following:

• Defining change management
• Exploring why change management is a big deal
• Examining why change management is considered difficult to do well
• Describing how to do change management effectively
• Discussing what challenges to expect during the change process
• Setting expectations about what to expect if change management is done well

Download Transforming the Organization in PDF format now.

---

Do not miss these two important strategy-related PDF downloads for executives and business strategy professionals.

---

Join the Strategic Planning Xchange group.

Learn More

Method Frameworks is a leading business strategy and management consulting company, based in the Dallas / Fort Worth area and serving clients nationally and internationally.

Discover our capabilities and learn why Method Frameworks is the strategic planning partner chosen by Fortune-500 companies and small businesses alike. Let us show you how to realize 140%+ ROI on your strategic planning efforts through our unique Plan4^SM process that brings together strategy and execution into a powerful plan. Plan4 is our proprietary business planning process that involves an integrated set of actions designed to help companies gain sustainable advantage. Download our brochure to learn more about Method Frameworks and our services or download our Plan4 Planning Process Overview.

You can contact Method Frameworks at 877-317-5264 (877-31PLAN4) or follow this link to request a meeting with a planning consultant. Check our articles and blog often at www.methodframeworks.com to get many more planning tips and information about our Plan4 process.

Locations

Atlanta	Chicago	Dallas
Los Angeles	New York	Washington DC

Related Articles
  3 Reasons Why You Should Use Social Co-Creation To Develop Better Products
  Networking Mistake Myopia
  SURVIVING THE ECONOMIC DEPRESSION BY CREATING A STRATEGY FOR YOUR BUSINESS DEVELOPMENT
  Cold Calling Mistakes: Top Tips To Avoid
  You Screwed Up - Now What?
  Common Costly Mistakes When Selling A Product Online
  Fail in Favor of the Customer
  Home Business Expert: Wealth Creation
  Instant Article Writing Template: The Top Mistakes Article Writing Template Explained in Detail
  How to Avoid Sales Mistakes
  Report: 40% of companies to hire contract or temp employees
  5.1 The SME Development Policy (SMEDP): Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
  Business Plan Help
  This is YOUR Economy - Go Get It!
  Understanding “Social Co-Creation” and its Role in Business Development
  Three Common Marketing Mistakes
  Book Review: Web Marketing For Dummies
  4 Must Know Strategies To Thrive In Any Economy
  Midterm Election: A Shovel-Ready Project
  Nigerian Government Creates $426m Microcredit Development Fund

Article Tags: business leaders, business organization, business strategic planning, chief executives, corporate strategy, customer value creation, joe evans, management consulting, method frameworks, strategy consulting
Referred by: http://www.imageworksstudio.com/



Related Forum Posts
Re: Tactics for Blog Traffic - some more tips to drive traffic to blog or to promote a blog. Squidoo Lens Creation Hub Pages Creation Social Bookmarking (Digg, Delicious, Stumble, Reddit etc.) Be helpful in forums Social Networking (Facebook, Twitter, Myspace, LinkedIn etc.) syndication blog commenting (other blogs) Guest post
Book: Secrets of Six Figure Women - Secrets of Six Figure Women: Surprising Strategies to up your earning and change your life Barbara Stanny, 2002 Jacket: Maybe you've noticed - a subtle trend is gathering steam. Quietly and steadily, the number of women making six figures or more is increasing, and it continues to rise at a rate faster than for men. From entrepreneurs to corporate executives, from white collar executives to free lancers and part timers, women are forging careers with considerable financial success. Through extensive research and hundreds of interviews, including dialogs with more than 150 high earners whose annual incomes range from $100,000 to 7 million, Stanny discovered that ...they all had certain traits in common: 1) a profit motive 2) Audacity 3) REslience 4) Encouragement 5) Self-awareness 6) Non-attachment 7) Financial knowhow She amplifies on these in the book itself. Table of Contents Intro: Welcome to the era of the six-figure woman 1. The Queen in the Countinghouse 2. The Lowdown on low earners 3. Raising the bar 4. Strategy 1: The Declaration of Intention 5. Strategy 2: Letting go of the ledge 6. Strategy 3: Get in the Game 7. Strategy 4: Speak Up 8. Strategy 5: The Stretch 9. Strategy 6: Seek Support 10. Strategy 7: Obey the rules of money 11. Claiming our power Appendces: Resources and websites Tips for getting out of dent Investing Basics: Wealthbuilding 101
Re: Two Useful Books To Help You Focus On The CLIENT - Hi David, To add to your thread, I'd like to recommend Jonathan Tisch's "Chocolates On The Pillow Aren't Enough: Reinventing The Customer Experience". Tisch's book includes content on "Welcoming Customers", "The New Art of Customization", "The Challenges of Customer Diversity" and "Offering Something Extra to Your Customers" to name a few.
Re: What can you do if your franchise is hit by a scandal? - GT - Brilliant Strategy... What can I add? I'm at a loss for words...so I'll shut up now...
Introducing a Learner - Hi everybody, It is really my pleasure being around so many Entrepreneurs and strategic minds. Strategy is something I always loved and eager over every new move. Being a newbie I would need your support and I hope I would get that. Thanks Stephen


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Local Marketing: 3 Simple Low-Cost Strategies

Taking Advantage Of Internet Advertising Trends

What is an Adaptive Organization

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.