1. Strategy and Value Exchange
Value Network and Value Exchange
Everyone is familiar with Michael Porter’s Value Chain concept.
Porter stated that any company is a chain of activities delivering customer value.
But any company is also a part of what Porter called a ‘Value Network.’
A value network consists of businesses that help you create value for your customers.
They are your suppliers, subcontractors, distributors, retailers, IT service providers, etc.
Oftentimes, we look at them only as suppliers or subcontractors.
But if you involve them in the value creation process, both you and they will benefit.
A few companies I've worked with took the task of building the value network seriously. But those who did flourish.
Do you take this task seriously?
Contemplation questions:
[1] What businesses does your Value Network include?
[2] What contribution do they make to the value you offer to your customers? How does their work affect the value you provide for your customers?
[3] How could you persuade your Value Network members to cooperate in creating value for your customers?
[4] What exactly could you do together to generate more value for your customers?
[5] Who in your company could be responsible for the task?
2. Customer cognitive biases: Availability Heuristic
If potential customers are aware of your products but prefer those of your competitors, the availability heuristic may be the reason.
The availability heuristic is “a cognitive bias that occurs when people rely on immediate examples that come to mind when evaluating a specific topic, concept, method, or decision.”
An idea that comes to mind first seems good.
A product whose name pops into a customer's mind seems more attractive.
People often buy branded goods not because they are better but because they look familiar.
Our brains are programmed to save precious energy, so they tag ideas or things that are easier to recall as better or more reliable.
Products more frequently mentioned in the press, social media, advertisements, or even in private conversations often seem more attractive when people see them on store shelves or online.
Want to sell? Make your product familiar to customers.
It doesn’t mean that every ad sells.
It doesn't mean that familiarity is the key to all doors.
But never lose a chance to mention your product this way or another.
Contemplation questions:
[1] How can you make your products more familiar to your clients?
[2] What information channels could you use?
[3] How could you evaluate the ROI of such investments?
Check out my new book, Red and Yellow Strategies: Flip Your Strategic Thinking and Overcome Short-termism, here.
3. Trend of the week: Gen AI creates more work for employees than it takes away
In a recent study by the Upwork Institute, 2500 global C-suite executives, full-time employees, and freelancers in the U.S., UK, Australia, and Canada were surveyed about AI and its impact on productivity and efficiency.
Key outcomes:
[1] 81% of global C-suite leaders acknowledge they have increased demands on workers in the past year.
[2] Leaders have high hopes that generative AI will help boost productivity, as 96% of C-suite leaders say they expect the use of AI tools to increase their company’s overall productivity levels. Already, 39% of companies in the study are mandating the use of AI tools, with an additional 46% encouraging their use.
[3] However, this new technology has not yet fully delivered on this productivity promise: Nearly half (47%) of employees using AI say they have no idea how to achieve the productivity gains their employers expect, and 77% say these tools have actually decreased their productivity and added to their workload.
[4] About 40% say that they're having to spend more time reviewing or moderating AI-generated content, and 21% are being asked to do more work because their managers believe AI let's them "do more."
[5] 38% of employees report being overwhelmed by having to use AI to do their jobs.
Bosses believe that a technology will increase their subordinates’ productivity because they have no idea what the subordinates do, and how.
Don't you have a sense of deja vu? Haven’t you seen something similar ten or twenty years ago?
Get strategic insights in my main newsletter Strategic Seeing.
Help me make this newsletter popular: share this post on social media or restack it here.
Read also: Strategic Roots: Why Goal Trees Fall Short and Processes Matter.
Thanks for keeping them coming.