With small signs of an economic recovery in sight, I have noticed many companies making preparations to shift back into high gear. But simply returning to old practices could extend the downturn if one’s business is not aligned with key stakeholders and their evolving needs.
The recent economic turmoil has undoubtedly made customers, employees, suppliers or other key stakeholders look at products and services through a different filter. And new stakeholders may emerge that have greater influence in the future:
- Do the company’s value propositions resonate in the new leaner, meaner era we’re entering? Can stakeholders get excited about it?
- Has technology pushed the IT department above the customer service group in terms of priority?
- Are some key customers still stumbling while new market segments are prepared to move forward aggressively?
- Which suppliers are innovating and could provide a sustainable differentiator in terms of efficiency, pricing and/or willingness to collaborate so you both can grow stronger together?
The New Survival Instinct
By all accounts, Springfield ReManufacturing Corporation in Missouri should have gone bankrupt during the 1980’s recession. Instead, the company embraced a survival instinct born out of necessity when a few employees bought the company in 1983 as a way to save their jobs when International Harvester announced it was closing the facility.
Springfield’s core business is to bolt components together into engines that are used in cars, heavy-duty equipment, tractors, or anything else that moves. The vehicle parts industry is suffering badly these days, but Springfield remains a vibrant company because it constantly re-evaluates its stakeholders and value propositions. This preparation has helped the company quickly switch to adjacent markets of manufacturing natural gas pumps and retrofitting U.S. Postal Service vehicles as the auto industry tanked.
Three Preliminary Steps to Take
The Springfield example emphasizes how revisiting with stakeholders can drive success even when the world outside is melting down. A leader’s first responsibility is to communicate a clear vision of where the company is headed. But the right stakeholders can provide the fuel that will help drive to that vision.
- Step 1: Every stakeholder will ask the “what’s in it for me” (WIIFM) question when evaluating a value proposition. Progress will be difficult if the company values don’t line up with the stakeholder values. Getting stakeholder feedback will help validate whether you’re on the right course or not. Help stakeholders articulate their view by using starter phrases…
- As an indispensable business partner, we provide….
- As a trusted source, we provide the best experience and expertise to…
- As the leader of innovation in X, we establish the standards and…
- Step 2: Analyze what each group of customers, staff and suppliers expect. Judgment calls are then made to determine whether expectations can meet realities.
- Are there new opportunities or different stakeholders that offer a better promise for success? Or are these alternatives too far from the core mission?
- What changes do stakeholders need to significantly increase the company’s value to them? What can be eliminated? Are there inefficiencies that have emerged as the business has evolved? What critical success factors must remain regardless of anything else?
- Which stakeholders can make a lasting impact based on the mission? Which stakeholders’ roles need to be changed, or eliminated?
- Step 3: Success can be found where the organization’s mission and value statements intersect with stakeholders’ needs. Distill the final value proposition into clear language that resonates with both internal and external stakeholders. It’s a fine balance. Make it too simple and the value proposition becomes meaningless. Too complicated and the value proposition can be misinterpreted Powerful value propositions have several common characteristics:
- Consistency with the organization’s mission statement. Stakeholders can become paralyzed if the mission is to market “Blue Widgets,” but the value proposition screams “Green Gadgets.” Seems simple, but many companies miss this part.
- Compelling value that answer the stakeholders’ “WIIFM” question with confidence.
- Specific enough to be measurable.
- Flexible to adjust to changing stakeholder needs.
- Pride is created among stakeholders; they feel honored to be part of the effort.
- Inspiration pours out to compel stakeholders to buy into the value proposition, either philosophically or literally.
Determining and constantly evaluating your stakeholder value propositions is an important step to thinking strategically on an ongoing basis. And in tomorrow’s economy, it is a skill set you won’t want to be without.