Delivering One-to-One value

How stakeholders create businesses

Peter Druker once famously said that the purpose of business is to create customers. This inside-out thinking has gone through a radical evolution, and we are fast approaching the point where stakeholders make or at least co-create businesses. That is because they have the power to demand the value that they want rather than accept the products and services on offer.?

Increasingly it is not only customers that have this power. Gen Z and Millenial employees demand that their employers value their hopes, dreams, and lifestyles. As a result, they choose to work with and buy from businesses that promise an ethical approach.?

Building value in these relationships to create a leadership position for your business in the perception of these stakeholders is the only feasible response to the entry of new cheaper competitors into established markets. That is because neither of the two alternatives provides a long-term strategy.

The first is to compete on price head to head. That is very difficult because these new entrants often have an insurmountable advantage in achieving price leadership by offering acceptable quality and service with a lower cost base. It also inevitably means an unsupportable race to the bottom.?

The second is to overcome price leadership with performance through developing innovative technology and services. The problem is that it results in the hamster wheel arms race of short-term technical advantage, which lasts at best six months.

So sustainable value leadership in your relationships with your stakeholders is the best long-term way to build a future for your business. But how? These need to be one-to-one relationships, and building these at scale means using technology such as Customer Relationship Management systems and HR Databases to listen and hear what your stakeholders say about the individual value they seek.?

By hearing from these stakeholders, you can develop the services and products that will deliver these individual values. And delivering these co-created products and services also relies on technology in areas like production, logistics, and inventory for customers and talent management, rewards, and more for your employees.

This is a key driver for turning traditional businesses into IT Services organisations. That means taking a different approach to the way that they need to be managed. These businesses can learn a lot from this IT Services sector and the solutions they have found to delivering individual value. Principally this is ITIL4.

In the rest of this paper, I will explain why adopting this model makes sense for most businesses, what it will mean, and perhaps where you can get the help you need.

Every Business is now a Technology Business.

Some organisations like Amazon started as IT service companies. Does Amazon sell books, or is it an IT Services company providing a platform for small merchants? Others have become IT service companies. For example, when ordering groceries on Sainsbury’s site, are you dealing with a retailer or IT Services company? Do the changes in the Accountancy sector mean they offer more online services and does that make them IT Services businesses?

But for many becoming an IT Services business means undertaking a process of Digital Transformation. This evolution is happening at different paces in different industries. The Pandemic has driven this process faster than most of us had anticipated. As a result, there has been a considerable increase in these projects to improve value for stakeholders like employees and customers.

This Digital Transformation is done well in some cases, but most businesses have wasted ￡millions. Often that is because they have understood the technology alone and haven’t recognised the strength of stakeholders in this new world and the need to build one-to-one futures with their employees, customers, and suppliers.

But also crucially, many have seen this as a once-off transition rather than a continuing process of value-driven innovation.

Continual Digital Transformation??

Digital Transformation isn’t a project that is started and completed. Instead, it is a path of continual transformation. Two forces, in particular, have introduced accelerating rates of change, making yesterday's Digital Transformation irrelevant to tomorrow's world.

The first is not a startling insight. But, as predicted by Moores's Law, technology is changing, opening up new opportunities and impacting the stakeholders' perceptions of the one-to-one relationship and values they expect. These changes in technology interact with the second factor.

This second factor is the pressures from the world where these stakeholders live, which adds a fluid and dynamic aspect to these perceptions of value. These include external events such as global warming and the Pandemic. The demographics of the stakeholders also change. For example, Millennials and Generation Z employees are less driven by career and more by purpose, which I will expand on further below.?

Putting these two interacting factors together, you get a business environment that is no longer the simple system of traditional industries with fixed geographical barriers but a complex web of interactions and connections requiring a systems approach to thinking.?

That is why innovation needs to become the norm to survive. But, unfortunately, that will be too much for many businesses driven into competing on price or attempting to achieve leadership in performance that will only be short-lived if it delivers the value it promises. The longer-term answer is to re-engineer your business to manage a continual process of renewal and delivery of one-to-one added value - as Business as Usual.?

The ITIL4 framework provides that structure for an IT Services sector struggling with this problem for decades.?

A Framework for permanent value leadership

ITIL4 is not new but remains unknown outside the IT Service delivery sector. So how would adopting it lead to permanent one-to-one value leadership for your business?

ITIL4? continually adds value to stakeholders through looking for and engaging with opportunities for improvement and consistently delivering added value. At its heart is a best practice approach to developing a service (Service Value Stream) that is Agile enough to co-create value for its stakeholders. Around this is a framework of General Principles, Governance, Practices, and a commitment to Continual Improvement.

The Guiding Principles are a shared understanding of why the business exists - its purpose. Governance articulates the direction of travel in line with these principles, while Practices describe how to live these purposes. This framework isn’t a dead hand. Instead, it is driven by finding ways to make these practices relevant and valuable to each stakeholder.

Although it now has a tarnished brand from an employee perspective, Amazon, probably the most successful business in the world, exemplifies this approach - “customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking.”. It uses its powerful technology to present a one-to-one experience for its customers that delivers individual value to them.

How can you adopt ITIL in your business?

Adopting ITIL in your business should lie at the heart of your Digital Transformation. It will be about developing a clear Service Value Stream that judges every innovation and change in your company by the value it adds to stakeholders.

It will also mean developing a shared understanding of what your business is about that is relevant, makes sense to all the stakeholders, and has operative power. This shared purpose needs to go beyond the boilerplate mission statements seen in most reception areas. It also needs to be more than the vision of the executive with buy-in from your employees. It has to be driven from the bottom by the business's stakeholders.

Once you are clear about your shared vision, you need to develop a set of practices, culture, and ethics that means every employee lives these principles at all times because they reflect who they are.?

The role of technology is to support them in living these principles so that they consistently add individual value for your customers, an essential aspect of which is the development and nurturing of a one-to-one relationship. That means this work is needed before a Digital Transformation program can start.

Managing and developing this technology to continually deliver individual one-to-one value means that change in both becomes Business as usual. You need a best practice approach to do that.? However, you need to tie this development to your general principles, which inform how you manage this technology and the practices of your people, chief amongst which is the constant search for improvement.?

Further thoughts and help

If you are interested in the above topics, you may be interested in a webinar I am planning, where I will explore them in more depth and offer some practical advice. Please either inmail me or send me an email at [email protected]