The terminology has always struck me as a little slick for something so fundamentally important: “value proposition” is a concept that every organization needs to own and revisit in its relationships to employees, to customers and other key stakeholders.
I unpack it this way: we have a responsibility to regularly ask ourselves the question, “what is the value of our offering or relationship to that stakeholder?” And then to solicit the feedback from that same stakeholder. Sometimes it happens naturally in the course of business: you submit a proposal and it is either accepted or rejected. That is their answer to the question of whether they see the value as you do. But because pandemic, economic disruption and altering of global dynamics have been so impactful over the past couple years, it seems essential to acknowledge that pretty much every value proposition needs to be revisited, revised or re-invented. We have all dramatically changed our thinking on what we value, how much and for how long. It is important to note that the pandemic has accelerated many of those changes, but they were happening before COVID became part of our reality.
It is true in real estate, in professional services, in retail, in financial services, in education. B2B dynamics are more opaque but the reality is the same in manufacturing and utilities. It is also impacting the ways we think about government, especially at the state and federal levels. And it is important to say that none of this is bad. Change is a natural part of our existence. But driven by technology, by the consequences of changing global market realities and by consumer trends, the reality is that essentially every business model is under pressure. Every organization is needing to assess whether their value propositions are valid or competitive anymore. And at the same time, evaluate all the value propositions that fuel and impact their own performance: every supplier, every part of the workforce, every investment in R&D and in compliance.
There was a great book authored back in 1996 by Adam Brandenburger and Barry Nalebuff called ‘Coopetition’ that I have been reminded of lately as I think about the value propositions that make up our business model. I took the opportunity to go back and remind myself of its key insights. In a nutshell, they explored the various ways any enterprise is comprised of a mixture of relationships: customers, suppliers, employees, communities and so on. They employ game theory to lead the reader through exploration of how moving around the puzzle pieces might impact competitiveness: for example, by focusing more tightly on core competencies, might two ‘competitors’ become collaborators in order to garner more share together than either could expect to win alone? Some of the gamesmanship leads to decisions about acquisitions or mergers, but often the benefits can be achieved even more nimbly. For anyone grappling with the dynamics of their value proposition, ‘Coopetition’ is a worthy re-read.
As someone who has enjoyed the challenges of adaptation to changing business realities for more than thirty years, I will confess that the scale and scope of disruption in value propositions is, to me, unprecedented. But acknowledging the reality of it is the first step. Being guided by big vision is another key. Building in reality-checks to possibilities and also building risk mitigation into decision-making are other keys. But don’t wait too long to get into this work – and don’t think too small.
Here we go!