08 Feb How Leadership Can Impact Value Creation
Lately, I have been thinking a lot about value creation and leadership. With so many companies experiencing persistent revenue pressure, disruptive innovation from ever increasing competitors and the need for strategic leadership, why are many companies struggling in this area? I believe it’s because we continue to kick the ball down the road. Once we achieve that ever elusive “number”, then we can focus on non-core, not time-sensitive activities that will grow our business. Unfortunately this idea continues to perpetuate product-oriented, short-term thinking. Senior Executives are committed to cost containment and revenue optimization, although where customers and suppliers interface, dynamics are demanding insight and mutual value creation.
I believe the answer lies in leadership driven by reciprocity. Why do we expect our customers’ organizations to be so vastly different than our own? Aren’t they wrestling with the same issues of doing ever more with ever less? Leadership at its core is focused on others’ considerations before our own. Facilitating others’ success as a path to our own success. How can we do this and position mutual value creation? To put their objectives before our own and focus on helping them to define their value propositions, showing them how to better engage their best customers, be more operationally efficient and compete more effectively in their markets.
Partnerships thrive when both parties perceive that they receive an equal amount from the relationship. That the sum of the whole is infinitely greater than the individual parts. Once the perception is the value exchange has significantly shifted from one side to the other, there is no longer trust and an open dialogue. People naturally push back or wait for the balance to come back into equilibrium, which can only happen when one demonstrates leadership, steps up and re-establishes common ground to continue the conversation. Anyone with children and has experienced the “Mexican stand-off” can attest to the fact that pushing one’s position only engenders hard feelings, defensive positions with no positive forward movement. In my opinion, value creation at its core lies in reciprocity and the leadership to focus first on how to deliver value before seeking to extract value.
The strongest compliance principle in the world is reciprocity. That’s why we offer free white papers, charities give free address labels when soliciting donations and the Hari Krishnas give out flowers. The time has come to understand and demonstrate how leadership with a you before me approach is the path to sustainable, mutually beneficial value creation. In the end, isn’t that what we all want?
Let me know what you think.