Driving Business Value – The Alignment Of Strategy, Knowledge And Relationships
The ability of today’s business community to deliver sustainable value is often viewed as how well it positions itself in the market, how well it innovates, how well it manages its operation or how well it develops its human capital. However, the true test comes in how well the company understands itself, its customers and its business partners.
“It’s not what people don’t know that hurts, it’s the things they know that is not true.”
Herbert Stein
One way to establish a foundation for the quantification of who the company really is, and not what we think it might be, is to conduct an internal/external assessment to identify your relationship, knowledge and strategy gaps.
Relationship Strategy Link
Relationship factors * Relationships the Company must have with the Customers and Partners
Relationship Gap
* Relationships the Company has with the Customers and Partners
Customer factors * What must be known about the Customers
Knowledge Gap
* What the Company knows about the Customer
Strategy factors * What the Company must do
Strategy Gap
* What the Company can do
This model positions the information points into three categories; strategy, relationships and knowledge.
The relationship element: what is viewed as essential for the company to have a satisfactory relationship with its Customers and Partners? Then what are the essential elements required to build an exceptional relationship with both?
Once these have been established then develop a reality position – what is the actual relationship and how sustainable are they?
The customer factors: who are the customers? What do we know about them, need, buying patterns, demographics, etc.? Is there a segmentation strategy or should there be one? If a segmentation strategy is to be deployed, what will be the key attributes and how will it be measured and monitored? Then what technology and people factors are essential in order to provide sustainable relationships?
The strategy aspect: considering the operational, technological, staffing, training, and marketing what can the company do and what must it do to drive value?
In each of these initiatives there will be a series of Gap elements, once identified careful consideration should be given to how they can be prioritized and resolved by the organization.
Business value impacts from industry studies indicate that, for a bank, small to mid size businesses ($5MM to $50MM) cost $5k to acquire. Studies further indicate that 10% to 20% of that market turns over each year. Extrapolated that means your customer base has the potential to erode every five years. The cost impact can be significant to your company, especially if a significant portion of this lost business represents your “A” category base.
Over the past ten years two trends have been the “buzz” for problem resolution within the business community. Benchmarking and Six Sigma have been touted as the way to move forward efficiently and provide a foundation for customer retention.
Each of these initiatives has merit and a series of success stories to support their value, but each company has its own set of unique characteristics and these should be taken into consideration when the prioritization and execution strategies are developed to close the value Gaps. It is essential to recognize the real strengths and weaknesses of your company when trying to establish strategic and operational initiatives. This model should serve as a baseline for the company and periodic execution will produce areas of refinement.
William C. Carter, has over thirty years of experience in strategy alignment, process optimization, and business transformation. He uses his consulting, banking and business development background to deliver bottom line improvements to domestic and international clients in the financial, manufacturing, and hi-tech business sectors. He may be reached at williamcarter07@aol.com
