Value Creation Part II

In my last blog I wrote about the importance of value creation for the long-term success of an organization. We defined value creation as “the ability to anticipate and profitably satisfy customer needs.” At the end of the blog, I raised the question “is there a standardized process for value creation?” The question that I probably should have asked is “what is our company’s standardized process for value creation?” The short answer, would be, that we don’t have a standardized process for value creation.

Although we have never defined our value creation process, we do have examples of value creation taking place throughout the company. How powerful would it be if we could standardize this process, and promote the use of this process throughout the company?

A few weeks ago, Jeff Doss, our Dispatch Manager came to me and mentioned that he had noticed that a few of our fuel customers had quit buying fuel from us. He asked if it would be OK for him to reach out to these customers and see if he could find out why they quit purchasing their fuel from us. Later that same day Jeff came back and mentioned to me that he had already contacted a few of the customers, and found out why they switched. In most cases we had lost the business due to simple concerns that could easily be solved. Jeff asked if he could make the necessary adjustments for the customers, and once again I told him he could.

Over the next couple of weeks, Jeff continued to call customers, and the same pattern emerged. The customers had some concerns, and Jeff typically found that his experience working as a dispatcher, had given him the capability to solve most of these problems. In many cases, the customer’s concern was not the price of the fuel, as had been previously assumed by many others within the company. There were concerns about price, but there were also concerns about split load fees, missing delivery windows, and credit terms. Jeff found out that since he and his team were in direct control of the customer’s fuel loads, they were in a unique position to address these concerns with the customer. Jeff had created value for these customers.

I asked Jeff if he could train and empower the rest of his team to reach out to customers and solve their concerns just as he had done over the past couple of weeks. If he could, the additional value that Jeff had created, would be duplicated with each additional team member on his team.

As Jeff and I talked, we realized that the key question that we needed to answer was “what is the best process for value creation?” The conversation that ensued from this simple question helped uncover a process that I believe can help us all accelerate the pace of value creation within our teams. Here’s the key steps that Jeff and I came up with:

1. Training - A team member’s ability to anticipate and satisfy a customer’s needs will be greatly enhanced if a team member is proficient at her job. This ability will also be enhanced if the employee knows the company’s core values, and has a good understanding of the company’s various key functions and activities. The best way to accelerate this process is to ensure that the employee undergoes a thorough training process when they are first hired, and participates in on the job training.

2. Manager Relationship – The Manager/Team member relationship is a key to this process. If a team member believes that her manager is interested in her success, she will be more likely to share ideas with her manager. This sharing of ideas will accelerate the level of creativity and innovation within the team.

3. One on One Meeting – Past experience has shown us that the 1:1 meeting is the most critical meeting that takes place within the company. During this meeting Managers have the opportunity to meet one on one with their team members. Managers are encouraged to use this meeting to reinforce commitments made by the team member, and to discuss ways that the team member can create additional value for the team, the company, and most importantly the customer.

4. Weekly Department Meetings – Managers are encouraged to hold a weekly team meeting with their team. This meeting provides an excellent opportunity for team members to bring up their ideas for value creation. All team members should feel comfortable to bring up their ideas at this meeting. In addition, the Team Manager can bring up ideas that have been brought up to her during 1:1 meetings. This meeting provides an excellent forum for the team to process the ideas that have been brought up, and decide which ideas should be implemented.

5. Rewards/Recognition – Managers are encouraged to find fun ways to reward and recognize those team members that actively participate in the value creation process. This will help support the ongoing success of the value creation process.

I’d love to know your thoughts. tony@repowell.net