Saturday, October 23, 2010

Creating a Value Proposition

One of the questions I am frequently asked is, "How do I communicate my real value to my customers?"  It doesn't sound that complicated, but understanding what your customers are truly paying for and learning how to frame a summary statement powerfully and succinctly is actually quite a mind-bender.

So, here is a brief process outline that will assist you in analyzing your own value proposition from the comfort of your desk.

1.  What is a 'value proposition?'  A value proposition is a clear and concise communication about the core benefits your business provides to customers based on their goals (not yours). The point of having one is to provide a compelling reason for people to want to do business with you.

2.  Here is a simple exercise that will assemble the key components for a value proposition by prompting you to answer questions about your business.

  • What is your core business offering?
  • Who do you serve?
  • What differentiates you from other competitors?
  • What are the specific solutions you provide that will meet your customer's objectives?
  • What factual results have you achieved in meeting your customer's needs and wants?

3.  Next, you need to compile your completed responses into a coherent statement.  Here's an example of how to structure a value proposition:

"At XYZ IT, we focus on providing cutting-edge technology solutions to health care facilities and hospitals throughout the Midwest.  The difference we make for our clients is reducing technology costs, increasing the life cycle of technology equipment, and improving the experience of employees and patients at the facilities we serve.  Partnering with us for IT solutions allows our clients to increase profits without sacrificing convenience, affordability, accessibility of information or quality of care. Over the past 10 years we've slashed IT costs by 10% or more in over 100 health care facilities while earning an average satisfaction rating of 9.4 on a scale of 1-10 from our clients."

4.  Make sure that your responses to the questions really delve into the heart of what you offer your customers.  Remember that while you have your own goals, ideals and reasons for being in business, those will seldom align with why your customers will make a purchase from you.  If you don't know what your customers are really after just ask them and find out!  Get specific about:

  • What are you really selling?  A perfume is probably not sold based on the combination of floral scents assembled in the formula or the shape of the bottle.  The perfume is truly selling sensuality or confidence.  
  • What are the benefits to the buyer?  Let's shift to the example of scheduling software... the benefit of buying and using the software isn't the pretty calendar layout - the tangible benefits are really organization, productivity and control over time.
  • Why make the decision to buy (value)?  This is where the rubber meets the road.  Address directly the problem that is driving your customers to you and provide proof that your solution is the best option available.
One of the keys to business success and salesmanship is being able to articulate the value of a product or service to potential buyers in a clear and compelling way.  I've seen many businesses fail that built a great product or delivered a very valuable service, but they couldn't convince customers to invest their hard-earned dollars in a sale.  Take a moment to examine your pitch and make sure that the value proposition you're putting out into the marketplace is worthy of attention.

Sunday, October 10, 2010

HELP! I'm An Underperformer.

By: Amy Gallo

No one likes to be an underperformer. It can be embarrassing, discouraging, and bewildering. Yet, many of us have at times failed to meet expectations. The good news is that poor performance isn't incurable. It's possible to turn it around and save your reputation with awareness, a sincere approach, and the right support.

What the Experts Say
"Usually a person doesn't realize that he or she is the underperformer," says J. Richard Hackman, the Edgar Pierce Professor of Social and Organizational Psychology at Harvard University and author of Leading Teams: Setting the Stage for Great Performances. Sometimes a boss, teammate, or HR representative will tell you you're not up to snuff, but according to Hackman, it happens less than it should. No matter how your underperformance is identified, by yourself or another, owning up to it is an important first step. "If you're underperforming, chances are that everybody knows it. If everybody knows it, let's acknowledge it because at least then we are all living in the same world," says Jean-François Manzoni, Professor of Leadership and

Organizational Development at IMD International and co-author of The Set-Up-to-Fail Syndrome: How Good Managers Cause Great People to Fail. Once you've done this, follow these guidelines to improve your situation.

Accept and understand it
"We all have an amazing capability for retrospective sense-making, which allows us to rationalize difficulties as 'not my fault'," says Hackman. It's easy to be defensive about not pulling your weight, especially because the underlying reasons are rarely straightforward. There is often a complex set of causes. You may be managed poorly or have inherited a weak team. Whether there is concrete data, such as sales numbers, or consistent feedback from your boss, peers, or direct reports, it's important to balance the information. "For someone struggling, the tendency is to attribute too much to external events," says Manzoni. This is largely because of self-serving bias. For example, you may believe you have a tougher sales territory or a more difficult team.

While those things may be true, there are probably aspects of your own behavior contributing to the failure too. Manzoni recommends taking a hard look at your performance and distinguishing between what you can change and what you can't. Hackman suggests asking colleagues for their input to better understand how you are missing targets. But don't just ask: "How am I doing?"

"It's generally much more constructive and helpful to seek confirmation and disconfirmation of one's own assessment than to ask someone to respond to an open-ended question about one's performance," Hackman says.

Ask for help
"If you're screwing up, you should be open with your boss," urges Manzoni. Many bosses respond better to "I need help" than they do the various rationalizations and explanations that often accompany poor performance. Be concrete about what you ask for. "Others will be more open to helping you if you show them how they can help, and you show them you are taking responsibility for what's in your control," says Manzoni.

Involving others — peers, mentors, even direct reports — can also be helpful. Ask for feedback about how you are performing and advice on how you can improve. These discussions serve two purposes. One, they help you gain useful insight into your own behavior. Two, they also let people know you are working on the issue. If they know that, they are more likely to give you the benefit of the doubt in assessing your future performance.

Decide what to focus on
Hackman recommends using a three-part checklist to assess the underlying causes:
  1. Effort. Am I putting enough time and energy into the work?
  2. Strategy. Am I working smartly rather than relying on routine?
  3. Talent. Do I have the skills, knowledge, and capabilities to do my job well?
"Just asking one's self those three simple questions often will surface some concrete things one can do to improve," says Hackman. Use the answers to decide where to focus your efforts.

Restore your reputation
As you begin to turn your performance around, you may realize that your reputation has been damaged. "The most telling and valid signal is whether you are actively sought out for the most challenging and important work, or whether you are overlooked when something comes up that really counts," says Hackman. If this happens, you need to pay careful attention to how you appear to others. "You not only need to perform better, but you need to be seen to perform better," Manzoni says.

Once you've made some progress, share your success with others. Ask for feedback to confirm they see improvements. Hackman recommends saying something such as, "I've been doing some work to improve the degree to which I do X. Have you noticed any changes? Are there additional things you might recommend I consider?" He cautions, "There always is a reputational lag. It will take some time before improvement is noticed, and even more time before people actively seek you out for the important work."

If all else fails, consider a change
There are occasions when you might find it too difficult to restore your reputation. Even if you make objective progress, others may not recognize it as such. It's also possible that you realize that you are underperforming because you are disengaged or uninterested in the work. In both these situations, consider moving on, either to a new team or a new employer. As Hackman says, "Sometimes withdrawing really is the best option."

Principles to Remember

Do:
  • Recognize what is in your control to change and what isn't
  • Sincerely ask for advice and feedback
  • Include others in your improvement efforts so they can see and appreciate your progress
Don't:
  • Be defensive about your underperformance and try to blame it on outside events or other people
  • Assume that just because you are improving, others recognize it
  • Stay at a job where you've become permanently labeled an underperformer