DC Velocity - September 2011

BY ART VAN BODEGRAVEN AND KENNETH B. ACKERMAN

basictraining

When soft is hard—winning
value propositions

WE TEND TO THINK OF BUSINESS STRATEGY AS ESSENTIALLY timeless, but that’s not necessarily the case. A lot of times, yesterday’s paradigms are worth about 20 cents.

In the last century, for instance, value propositions tended to center on a few themes:

▪ Price – we are less expensive than the competition (the term “cheaper” was studiously avoided)

▪ People – we are smarter than anybody else

▪ Processes and Products – we’ve built a better mousetrap, and we’ve built it a better way.

But these days, we’re hearing some new themes, such as:

▪ “We are really easy to work with”

▪ “You ain’t seen nothin’ ’til you’ve seen our service”

▪ “We help you make things happen”

▪ “We’re in this together.”
So what does this mean? Have cost, quality, cre-
ativity, and processes fallen off the radar? Not at
all. Continuous improvement in value (what the
customer gets for the cost, not simply a low unit
price) will remain a core objective for companies
and for supply chain organizations. Attracting
and retaining the right talent will forever be a
critical contributor to success. And re-engineer-
ing and refining processes for design, planning,
execution, quality, communications, and market-
place relevance must be a way of life in a fiercely
competitive global economy.

What has changed is that nowadays, everybody claims to have the best prices, people, and processes. And when everyone has them, they’re no longer a source of competitive differentiation. They’ve simply become table stakes—the ante just to play the game.

ENTER THE NEANDERTHALS

Some are left shaking their heads. “Enough of this soft stuff; we’re after hard business results.” They’ve made fun of what they call the “soft stuff” for so long that we’ve all become a little defensive about it. What they’re not getting is that the “soft stuff” is the hard stuff.

To put it another way, what they call the “hard stuff” is not sustainable without the soft stuff. Lowest price might get the first order; shoddy quality might disqualify a supplier from any future sales.

Smart people who are abrasive might get through the bidding
process but turn an entire company against them over the course of
a working relationship. And bright people will not
stay long in a working environment that is not
positive and supportive. Perhaps they’ll tough it
out in a weak economy, but they’ll bolt for the
door at the first sign of turnaround.

WHY IS THE SOFT STUFF HARD?

There are several reasons, and they’re all important. And they’ve got to be mastered before a company can hope to be effective at the hard stuff.

It begins with the reality that people are all wired differently. Left to their own devices, they’ll kill off (figuratively) those who aren’t pretty much like them. They—at all levels in an organization—need to learn how the “others” are different, and how they can use the differences to create more effective, higher-performing organizations, solutions, products, and processes. Along the way, they also need to learn about themselves, their strengths, and their weaknesses.

Then, there’s the vital need for alignment, again at all levels. The senior management team has got to be, without reservation, behind a singular vision and mission. Components of the organization must link their efforts with strategic directions and clear supporting objectives. They also need to communicate and collaborate with peer corporate functions for integrated and multi-faceted solutions—and learn to trust those they’ve been suspicious of in the past.