By Travis Barker, Consulting Partner at Stellar
A few months back I wrote an article discussing the eternal challenge of aligning organisational action with strategic intent. In that article I touched on the mounting pressure for incumbents to better address this challenge before facing the growing prospect of digital disruption – market transformation led by emerging digital technologies and business models.
These innovative new technologies and models can impact the value of existing products and services offered in an industry, so if your organisation is not operationally aligned it can be incredibly difficult, if not impossible, to rise to the challenge of digital disruption.
Having a clear understanding of your value proposition – the implicit promise your company makes to its customers to deliver a particular combination of price, quality, performance, selection, convenience, etc. – is obviously a critical prerequisite.
The harder piece of the puzzle is in aligning your operating model – that is, the combination of operating processes, management systems, business structure, and culture that gives your company the capacity to deliver on its value proposition. And this is where you are vulnerable to disruption.
Bestselling business classic The Discipline of Market Leaders introduced the concept of value disciplines back in the 1990s to isolate the ways in which successful companies combine operating models and value propositions to be the best in their markets. Through their research the authors identified three distinct value disciplines aimed at producing different kinds of customer value:
- Operational excellence: Companies that pursue this are not primarily product or service innovators, nor do they cultivate deep, one-to-one relationships with their customers. Instead, they provide middle-of-the-market products at the best price, with the least inconvenience. Their proposition to customers is simple: low price and hassle-free service.
- Product leadership: These companies concentrate on offering products that push performance boundaries. Their proposition to customers is an offer of the best product, period. Moreover, product leaders don’t build their propositions with just one innovation; they continue to innovate year after year, product cycle after product cycle.
- Customer intimacy: Customer-centric companies focus on delivering not what the market wants but what specific customers want. These companies do not pursue one-time transactions; they cultivate relationships. They specialise in satisfying unique needs.
As the authors note: “No company can succeed today by trying to be all things to all people” – they must master one value discipline on which to stake their market reputation.
So, if you’re operating in one of the industries that are being disrupted the most by digital, and you don’t have a tight grip on your value discipline, then it might be time to sit up and take note.
Stellar’s customers are using data-driven innovation – Business Intelligence – to not only earn more value from their customers, but to disrupt their competitors.
Here are some examples of how we’re helping them do it:
- Optimising business processes: For customers seeking a step up in operational excellence we use data warehousing, business intelligence and analytics solutions to make business processes and decision-making faster, better and more cost effective.
- Product & Service Innovation: Customers seeking product leadership turn to Stellar to help them monetise their data assets. We use cutting edge technologies and techniques such as cloud services, big data and machine learning to create new experiences and opportunities for customers.
- Customer Intimacy: Leveraging the power of big data and analytics is a critical discipline for customer-centric organisations. We help customers who seek a deep understanding of their customers to enrich and analyse vast datasets to produce individually targeted recommendations and personalised services.
A few months ago I gave a presentation on this topic (see below) to the New Zealand Government CFO Forum and discussed how they, as business leaders, could be driving more value out of their agencies through these very same disciplines.
If, like them, you are still unsure how Business Intelligence can generate new levels of performance in your company then it’s probably time to give us call. Stellar works with New Zealand’s best organisations on these challenges every day – so I’m sure we have a few insights to share.
In my next few articles I’ll discuss each of the value disciplines in a little more detail and give you some real world examples of how Stellar’s customers are using data-driven innovation to own their markets and ward off digital disruption.