Defining and Delivering Value To Customers
One of the key questions in any business is how to deliver value to the customer. So, what is value and how to define it? The thoughts of great business thinkers such as Drucker, Porter, and Goldratt can be summarised: The customer value is not determined by the vendor but by the customer. Therefore the question can only be answered by looking at the business from the outside, from the customer perspective. This wisdom is more profound than one might think after reading it the first time. Quite easily companies proceed to a wrong direction when they consider their product or service mostly from their viewpoint. One typical example outcome of such definition of value is the addition of features and complexity to the product although customers are looking for simplicity. Or quite often the difference in worldviews of customers and vendors is that customers see the vendor product more boardly than the vendor itself. Vendor sees only the core physical product or service but the customer values flexibility, short lead times, proactive approach, warranty, etc. This same question is a key topic in the following excellent books. Lean management system teaches to address this question vigorously all the time. Womack & Jones: Lean Thinking Morgan & Liker: Toyota Product Develoment System: Integrating People, Process, and Technology Christensen in his books regarding innovation. The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business The Innovator's Solution: Creating and Sustaining Successful Growth Goldratt - the author of business novels Goal and Critical Chain has also written a book about deliver customer driven value Goldratt: It's Not Luck And finally Kim & Mauborgne Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant How does this relate to software development and application creation? That's a topic for upcoming posts. And by the way - the same applies to Employee Value! :=)
