A Zombie Idea: Value Improvement

If a firm is not creating and keeping customers, it’s not because the value offered must be improved, it’s because the value being offered is wrong. Firms spend huge amounts of resources and money on Lean and Six Sigma programs to help improve value. These firms should realize that value is designed, not improved. Lean and Six Sigma can help you create and deliver value efficiently and with minimal variation around a specified value target, but they are not the way to develop that target itself.

Only when a firm fully understands market need can it begin to innovate and design value. Designing value is not about designing a product or service. It is about designing benefit and utility for a customer (or customer group), where the benefit/utility perceived by the customer exceeds the price being asked. The product or service are merely the carriers of the value.

Marketing and innovation are the two fundamental business processes that drive value design. When a firm cannot design value that creates and keeps customers, it should look to these two fundamental processes, not to the shop floor.

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