Lean Musings and other stuff...

The Warping of the Value Proposition

I have fallen into the trap of the Instapot. If you don’t know (how could you not know), someone took the run of the mill pressure cooker, combined the convenience of a crock pot, and ta da – Instapot. Want French Onion Soup in fifteen minutes from scratch – done. How about Fettucine Carbonaro – done. Curry Butter Chicken in twenty minutes – done. It’s a problem yall. I wonder if there’s a recovery program of Instapotters?

Corporate America is funny thing. And yes, you are in Corporate America. This modern phenomena of creating businesses that are largely self-sustaining isn’t that old. There was a time when your business did something and just that thing. If you wanted accounting help, assistance with shipping things, or even just advice on how to pay people, you only had two choices. Go out and pay for that service or figure it out yourself. But in Corporate America, that’s not the case at all. Here, when we have a service need, we start a department. We internalize our service needs.

Doing that comes with some interesting challenges.

The Service Provider Challenge – being a service provider comes with some obligations. Whether you are an auto mechanic, hair stylist, or web designer, when you are approached, you are being sought out to provide a service that the customer believes they cannot or will not provide for themselves. That’s how service providers provide value. In those examples, it isn’t like there’s only one mechanic, or that you couldn’t cut your own hair, or even look for tools that help you create your own website. In each of those instances, someone is offering services to those who are open to the terms of service and the cost associated with them.

What happens though when you:

• remove those accepted terms of service
• remove having multiple service provider options to choose from
• or don’t have the dynamic of directly paying for a service

You get Corporate America. By design, companies select and build out internalized service functions versus contracting them out or foregoing them all together. Once you do that, some unintended things can begin to happen. Without the norms we all use in almost every other facet of our lives, we begin to erode and warp the value proposition between service requestor and provider. That creates three challenges if left unchecked:

• Role Merging – over time it becomes unclear who initiates certain work, who owns the activity, or even who’s accountable for it’s completion. What was once the responsibility of the service requestor slowly becomes an additional service provided by the service provider. It would be like someone wanting to order food at a drive thru, but over time, expecting the drive thru to come get their car, guess at what they want to order, go and order it from their own drive thru, return the car and order, and then be held accountable for any gaps or mistakes in the order.
• No Limits – providing a service when there is no tangible exchange of “payment” can create odd byproducts. The requestor isn’t experiencing any visible cost so the service seems unlimited, or at least, not constrained to how much of that service they can afford. The provider can’t measure what or how their work is most needed so it all becomes equally important.
• Fear of No - Because there is no exchange of “fees” for service and all the work seems needed, the provider moves their perceived value from the services they were put in place to provide to always being available – always saying yes. If this happens, and it becomes generational, another words it becomes the new normal, the idea of declining to offer a service becomes unheard of. You simply don’t say “no”. Because if you did, of what value are you? It’s not in the specialized services you uniquely provide anymore. Those were overshadowed long ago and replaced by simply being present, available, and receptive to any request. The word “no” isn’t available to you anymore .
• Codependency – in a relationship, even in the workplace, you can become an “enabler” in a codependent relationship. Between groups or individuals, it happens slowly and often unintentionally. One party needs a little help. Maybe they forgot to provide a data point or follow up on a open item? The other party, realizing it was an innocent mistake, willingly covers for them this one time. Then it happens. The group or individual that came up short last time sees this and decides to take advantage. A new habit is formed. Now when work is exchanged, they know they don’t have to do it well or constantly, because the other group will cover for them. As time goes by, the service provider begins to get very good at covering for the requesting group. They begin to see this as an additional service – a needed activity. You know ol’ so and so, they always forget to fill out the form, get it in on time, or provide that information. That’s just who they are. And, that’s how you just become who you are – an enabler in a codependent work relationship.

It is a luxury and competitive advantage to, not only have them, but to have highly adept in-house service providers. Before you think this just about teams like Finance, IT, or HR, the same argument could be made for more frontline groups like delivery, marketing, or sales. In every service provider and service consumer relationship, the challenges above exist. It’s up to both parties to be vigilant and constantly refresh the “arrangement” to best reflect the service requestor’s needs and the service provider’s capability and commitment to those needs. Tools like a SIPOCr, Process Map, Value Analysis, and a RACI are all helpful in that endeavor.