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Can't find growth? How much value do you want to create?

Start your search for value by first asking the question: How much value am I looking for?
Sustained growth has always been hard to find and it is not getting any easier. I have posted a couple of blogs related to finding growth: Can’t find growth? Redefine what business you are in! Can’t find growth? Look beyond your Industry to your Business Ecosystem!

An interesting area that I do not see covered is how much value are you looking to create. In my internal and external consulting over the last 10 years one of the first questions I ask is “how much value are you looking to create?” $1M? $10M? $100M? $1B? The absolute numbers matter less (because they depend on what business you are in and the size of your business); rather it is the relative order of magnitudes.

About 10 years ago when I was driving a business model agenda at HP, I took the time to calculate the relative value of a feature improvement, an architectural innovation and a business model shift. The results:

Order of magnitude

Major feature change $1Ms
example: performance improvement

New Product $10Ms
example: new printer

Architecture innovation $100Ms
example: new chip architecture, shift in engineering design,

Business model shift $1Bs
example: low cost business model, systems business model

Why does this matter? Whether you were asked by management to find new sources of value or you are a consultant, asking how much value needs to be identified will point you to where you need to start looking. Do I need new features? Do I need to innovate the architecture or do I need to be able to innovate the business model or come up with a new business model. The work is very different. The risk is very different. The skills and resources needed to deliver on the request are very different.

But there is something common across these options. We need to understand the customer value gaps – the gaps in experience where the customer is willing to pay to close the gap. That information can be purposed to develop new features, new products, new architectures and/or new business models. And without that fundamental understanding, it will be very difficult to impossible to find value, let alone sustained value growth.