In this third piece of our series on value realization, we discuss achieving value for your customers. This capability is by far the most important—and most difficult—to master.
Capability No. 3: Achievement
To deliver value, you must communicate your goals and measure the process, step-by-step. The heart of value achievement is demonstrating how the customer ultimately achieves financial, operational, and strategic benefits.
Eric Almquist and his coauthors do an excellent job of delineating types of benefits in his “Value Pyramid,” pictured below. Our focus here is on functional and ease of doing business value achievement.
Measuring value achieved compliments and improves on widely used customer experience metrics such as the Net Promoter Score and the Customer Engagement Index. We believe that a key benefit of effective value achievement is superior accountability across the organization for the outcome targets and the path to attaining those results.
Here are five rules for effective value achievement:
- Ensure that senior business leaders feel a strong sense of ownership by engaging them in the selection of performance improvements to target, track, and measure. Involving corporate finance for their input and support can often help add credibility to the process.
- Review and recalibrate value drivers and performance measurements regularly (ideally quarterly) to prevent them from going stale or obsolete.
- Demand line of business accountability for deployment project funding and delivering results. If the business is unwilling to have the benefits be incrementally counted against their operating plan, that’s a red flag.
- Be selective about the number of performance indicators and business outcomes to be managed. Focus on just a few for each functional area affected.
- Use outcome-oriented language in how you communicate so that everyone stays focused on the results that truly matter across the business.
In helping many organizations with value achievement, we have found that there is a common set of questions that are asked of us:
- What benefits can I expect and how quickly will I see them?
- What do I need to do to assure these benefits are realized?
- What benefits have other customers achieved? Over what period of time?
- How do I drive consumption or uptake of the ongoing updates that I will be receiving?
- Do I really need all those updates? Does the organization see them as interference of operations or as new capabilities to be acquired?
- What’s the best way to document benefits realized?
A well-orchestrated value achievement program will anticipate these questions and will look something like this chart below, broken out by target, track, and measure elements:
When looking at performance indicators, remember that benefits can come from many and varied business objectives. Existing literature does an excellent job enumerating the types of business objectives to consider when outlining an approach to benefits measurement. One especially strong example is Business Benefits: Measure and Value All Benefits by Marty Schmidt. Here are the categories suggested by Schmidt:
The bottom line: Value achievement practices can’t be cookie-cutter solutions. Rather, they are composed of a unique set of roles, processes, and tools. Successful practices are highly context-driven and consider the organization’s culture and leadership style.
Don’t wait for everything to be perfect; that will never happen. And most important, institutionalize this capability into how projects are managed going forward. The more effectively you produce and demonstrate business results realized, the more you’ll be perceived as a true business leader or strategic partner.
The ultimate expression of a seller’s confidence in, and commitment to, guiding their customer toward agreed upon business outcomes might be the willingness to sign a contact with fees dependent on those outcomes. In our research, we asked organizations to rate on a 1-10 scale their willingness to enter into a such an agreement. When you look at the top 10 industries represented in the survey, telecommunications organization scored the highest at 6.5 out of 10. Manufacturing scored the lowest at 4.6.
In the next and last article of this series, we will cover advocacy, the fourth capability. The focus on customer value through alignment to customer strategic objectives, systematically driving customer adoption of your product, and organizing customer engagement for value achievement is the best way to assure that your customers will engage in enthusiastic brand advocacy for you.