Unlocking long-term success with value creation in your business
How value drives growth and stability
Value creation is a powerful way to set your business apart. Discover why and how to do it for sustainable, long-term success.
In today’s uncertain economy and competitive business landscape, being ‘good’ is no longer good enough. So how do you take your business from ‘good’ to ‘great’?
Value creation takes your business to the next level by delivering something beyond a ‘good enough’ product or service. By creating additional value for stakeholders – including customers, employees, shareholders and society as a whole – value creation drives growth and long-term success.
In this post, we’ll guide you through ways to create value – including customer centricity, innovation, data analytics and more.
Understanding business value
Business value is the estimated overall health and wellbeing of a business. It is measured through tangible and intangible elements including assets, stockholder equity, brand, trademarks and societal benefit.Shareholder value describes the value possessed by a shareholder for owning shares in a company. An increase in shareholder value occurs when a company earns a return on invested capital (ROIC) that is greater than its weighted average cost of capital (WACC).
While shareholder value is based purely on a financial measure, holistic value considers environmental and social measures, encouraging value creation for stakeholders beyond shareholders and consumers to the entire map of diverse stakeholders – including the planet.
Ultimately, creating value is vital for business growth and stability as it grows customer loyalty, share of wallet and overall profitability.
Creating value through customer centricity
All business success starts and ends with the ability to create value for customers. Taking a customer centric approach to value creation reflects this reality.
More than simply increasing customer satisfaction, customer centricity requires a redesign of company strategy, structure, culture and processes. Here are some ways to make it happen:
Customer research: first, do the work to intimately understand your customers through market research, surveys and feedback.
Products and services: provide high-quality, customisable products and services, tailored to customers’ preferences, to build customer satisfaction.
Customer experience: deliver an exceptional customer experience (CX) by creating a culture that prioritises the customer and rewards employees for delivering exceptional customer service.
Personalisation: add value throughout your CX by providing a personalised experience that builds long-term loyalty.
Continuously improve: collect and analyse customer feedback on an ongoing basis to identify and action areas for improvement.
Creating value through innovation
Creating value requires out-of-the-box thinking to help your business stand out from the crowd.
Fostering a culture of ongoing innovation is a big part of this, encouraging employees to explore new ideas, do things differently and find creative solutions to common customer problems. Make innovation part of your business’s DNA by scheduling regular brainstorming sessions, encouraging collaboration across departments and providing employees with the resources, creative space and rewards they need to innovate.
While innovation is crucial, it needs to be anchored with solid operational processes. Optimising your processes allows you to create more value by increasing productivity, reducing costs and freeing up time for creative pursuits. Make sure your processes are streamlined by investing in process mapping, technology that supports automation and continuous improvement initiatives.
Methodologies like Six Sigma and Lean also support business optimisation. Six Sigma focuses on improving output quality by identifying and eliminating errors and minimising process variability. Lean focuses on eliminating the eight kinds of waste: over/under production, waiting, unnecessary transportation, over/under processing, excess inventory, unnecessary motion, defects, and unused creativity of team members. Lean Six Sigma is a synergised managerial concept that combines the two methodologies to provide greater scope for identifying errors and waste, and driving process improvements for increased value creation.
The right technology also has powerful potential to drive innovation and improve operations. By leveraging automation, artificial intelligence (AI) and digital transformation, you can streamline processes, implement customer relationship management, provide personalisation and enhance CX to gain a competitive edge.
Finally, it pays to stay attuned to market trends, conditions and changing customer preferences. Don’t try to be everything to everyone – instead prioritise the features that will deliver most value to your customers and differentiate you from your competition.
Creating value through data and analytics
Harnessing data effectively provides the information you need to maximise opportunities to create value and thrive.
Data makes customer centricity possible, ensuring you have the insights you need to make data-driven decisions based on customer segmentation, profiling and feedback.
As well as helping you assess what is via data analysis, data also helps you determine what will be via predictive analysis – a key part of deciding where to go and what to do next, informed by market and industry trends.
To harness and analyse data successfully, you need the right technology, resources and expertise. With these critical elements in place, your business will be better equipped to build value with visualisations, reports and dashboards that highlight specific challenges and identify opportunities for improvement.
More ways to create value
Other ways to create value include:
Employee engagement and development: attract and retain the best talent, develop their skills and motivate them to produce powerful value for stakeholders.
Financial performance: boost profitability to create business value by investing equity back into your business.
Cost control: reduce excessive spending and waste to redirect resources to more productive areas.
Sustainability: enhance brand reputation and customer loyalty by prioritising environmental and social responsibility.
Competitive position: clearly communicate why your product offers more value than competitors.
Competitor analysis: understand and assess your competitors to stay one step ahead for competitive advantage.
Unleash your organisation's potential
The temptation to focus on short-term results in a challenging economy is strong, but a value-focused approach will pay dividends in the long term. Sustainable profitability from intentional value creation enables you to reinvest in your business, hone your products and/or services, build customer loyalty and drive long-term growth. There’s no one-size-fits-all approach to creating value, so consider engaging an accountant who can guide you to the value creation method that will deliver the biggest impact.