I'm about to embark on a strategic planning effort for my department at work. In preparation for this effort, I'm going back and re-reading Peter Drucker's classic book, Management. Mr. Drucker leads you through a series of questions in the process of answering the big question: "What is our business?"
One of the lead-up questions is: "What is value to the customer?" That's the one I will be focusing on at work. Some people confuse value with low price. It's not the same. Here's an example discussing what "low price" means in terms of a component of home construction.
Electrical equipment such as fuse boxes or circuit breakers are paid for by the homeowner but selected and bought by the electrical contractor. What is price to the electrical contractor is not the manufacturer's price for the product. It is the price of the manufacturer plus the cost of installation - for that, of course, is price to his customer, the homeowner. Contractors are notoriously price-conscious. Yet, a high-priced maker of fuse boxes and circuit breakers is the market leader in the U.S. To the contractor this line is actually low-priced because it is engineered to be installed fast by relatively unskilled labor.Where I work, we have several groups who are deeply confused about this point. One group produces Lotus Domino team sites for free. The sites are loathed by all because they are practically unusable. Information stored on these sites is nearly impossible to find. While the site is free, the cost of using it is enormous.
That group never answered the question, "What is value to the customer?" In that case, "value" is sharing information. An expensive site that allowed them to share and collaborate quickly and easily would "cost" far less than a free Lotus Domino site. In their case, that group has implicitly decided that their business is the creation of Lotus Domino sites and not helping the workforce collaborate. If they worked in the commercial world, they would have gone out of business long ago because they never asked themselves the right questions.













