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Chapter 1 (Continued Page 3 of 3) |
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A New Way To Look At Value Creation In summary, there is a need for a new approach due to: · The move towards flatter, less hierarchal organizations where it’s not possible to look over everyone’s shoulder; · The rise of the largely self-directed knowledge worker; · The role of intangible assets as the major source of value creation and investment allocation; · The move from being constrained by capital to being constrained by having the right people; · The shift from share of market to share of customer; · The transformation from mass markets to mass customization; · The ubiquity of information via the internet, and the rise of transparency; · The change from an inward ‘silos’ focus to an external focus on ‘one face’ to the customer; · The convergence of customers, employees and shareholders; · The emergence of the corporation as a responsible member of society.
These ten developments have created an opportunity for a new type of leader and manager. A leader and manager who operates not by command and control in the traditional sense, but by creating a “pull” force field throughout the organization that resonates with employees, customers, suppliers, investors, boards of directors and other stakeholders of the firm. Leaders and managers who understand how to create an “invisible hand” that guides the actions and decisions of all stakeholders so as to create and maximize value over the long term while motivating all players to operate with enlightened self-interest.
We will offer ideas upon which a consciously competent foundation for effective and efficient leadership and management can be built. These ideas create a more unified view of leadership and management, and make the brand value of the enterprise the centerpiece of value creation and measurement. It offers CEO’s and their management teams new thinking about the mission-critical role of brand in their company, and how enlightened brand strategy conserves and creates value and reduces risk in a sustainable manner in an increasingly competitive environment. It also serves as a warning to those who don’t understand, ignore, or act in violation of the basic values inherent in their corporate, product and service brands.
These ideas can be used by those executives whose companies are doing well, and want to do even better. Executives who welcome a way to challenge their organization and to enjoy their success even more. They’re open to a big idea that can help them fill in a blank sheet of paper that describes the future as they’d like it to be.
These ideas are useful for companies that are treading water, getting results that are OK, but not making much progress in terms of generating more business or value. It gives people throughout the organization ideas they can apply to raise the company to the next level of performance.
These ideas may be most useful for companies and management teams that are in real trouble, getting ready to ‘prepare three envelopes’. Companies ‘at risk’ may be ideally positioned to benefit the most from this book, since there is a direct correlation between how much trouble a company is in, and the willingness of its employees to embrace change and try new solutions. We’ll give the management team a prescription for what to do to reverse negative performance with a breakthrough concept.
These ideas are also intended to provide insight for service companies like ad agencies, PR firms and other ‘trusted advisors’ who need to redefine their role in order to be once again viewed as trusted advisors, rather than hawkers of media. Current trends towards ubiquity of information, customization of products and services, fast cycle times, and “niches of one” serve to redefine the relationship of their clients’ customer to the clients’ company. Ad agencies and other service companies who can provide an objective, outside-in view of how these trends will impact the client firm; the implications for future innovation, brand and related marketing initiatives, and value creation and measurement based on the ideas in this book will have a competitive advantage. This insight is key to turning the tide of client defections and program cancellations. It also opens up the possibility of linking enhanced brand building and value measurement techniques into agency performance-based compensation structures.
For brand practitioners within companies, creating a better understanding of the contribution of the company’s brand(s) and brand practices to the company’s future value will help practitioners be successful in protecting and garnering budgets and programs needed for success. This understanding will also position the brand practitioner as a vital part of the executive team.
Financial types within the company can get great insight into how the current metrics are inadequate to the task at hand. They’ll gain a greater understanding of the role and challenges faced by marketing, and the ability of the organization to create and destroy value. This insight and understanding will lead them to develop new measures, and new ways of keeping score. We hope to inform the development of those measures.
Financial types outside the company can use this book to develop a deeper appreciation of the value of intangibles, and how to better understand the unrealized potential, and challenges, that merged or acquired companies may represent. Investors can use the ideas so as to better perceive the ‘hidden’ value in the firm, and the prospects of the firm over the coming months and years. Everyone will have a tool with which to better evaluate performance, long-term risks, and use this to arrive at more rational stock prices - within the overall context of the economy and market.
An expanding part of our economy is represented by so-called “non-profit” firms. The non-profit/not-for-profit sector in the U.S. consists of 1.4 million organizations with reported combined 2004 annual revenues of $1,400 billion, and $1,300 billion in assets. 8 out of 10 non-profits make a profit; they call it a “surplus.” 1 in 12 Americans work for a non-profit either full or part-time. According to the MetLife Foundation’s 2001 survey report, Giving and Volunteering in the United States, 83.9 million American adults representing the equivalent of 9 million full-time employees gave time valued at $239 billion. We believe that “for profit” firms can find much to learn from the way leading non-profits use principles-centered brand leadership to create value. There are many non-profits that can learn and apply these lessons as well. Much of what we write about is also applicable to individuals. Look at the ideas in this book through the “lens” of how they apply to your company, as well as through the “lens” of how they personally apply to your life and future career choices. We’ll give you tools with which to evaluate your company’s corporate brand, its product and service brands, and how your own “personal” brand fits in. Similarly, company human resource professionals can use our concepts to improve their recruitment, training, recognition, compensation and retention practices.
Our solution describes a way to continuously transform the enterprise while creating greater value. A way to create your own good luck. A way to create meaning in all you do. It’s a journey that need never end.
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