The Expectation Is Value Creation, Part II
By Mike Cosentino
Assessment and Exchange: Where Value Creation Becomes Personal
Portions of this commentary come from Chapter 9 of my book, It’s Not the Bricks, It’s the Mortar: Optimize Your Retail Business for Lasting Success.
In last month’s installment of The Monthly Mortar, we covered a lot of ground! In addition to the oft-overlooked definitions of both terms that actually comprise Value Creation as a deliverable (“value” and “creation”), we leaned into an important reality for successful service businesses with this concept: Value Creation itself is our creation of the vision those we serve have for themselves or something they care about (i.e., their business, their family, their convenience, their discretionary time). Their vision cast is to become our value created. And this ground truth helped us illuminate and detail the first action required for successful Value Creation: Investigation. Along with core investigative principles, it is a deep reliance on thoughtful questions, diligent listening, and meaningful research that allows us to uncover what others need, desire, and envision for their future.
I encourage you to digest Part I and complete the recommended homework before consuming what lies ahead. Here’s a quick link to do so. The forthcoming content in Part II will pick up where we left off last month. And as we cover Assessment and Exchange as the remaining 2 elements of effective Value Creation, it will become apparent how each element of Value Creation is fundamentally connected to the others. This triple-braided cord transforms good intentions into healthy relationships and healthy returns.
The Shoe May Not Fit
Oh, this is unwelcome news! But it doesn’t make it any less true… Just because our Investigation accurately identifies a need or opportunity, such capable detective work does not mean we are qualified or optimized to assist or create value.
In the same way Investigation reveals what matters to others, Assessment determines whether we can confidently create value in those matterful areas. What we’ve learned by looking outward must now pass through a filter instated by looking inward. Assessment is the term we use – but it is correctly perceived that Investigation is followed mostly by introspection.
And the central question of this next step is remarkably predictable: Can we really (really, really) create value for this prospect?
To best answer this self-directed query, there are popular (even expected) accompanying questions that are not to be asked. We do not ask whether we could sell something. We do not ask if we could generate revenue. Or profit. We do not ask how we might persuade someone to become a customer. Or an even better customer. In the Assessment, we exclusively determine whether we’re currently capable of delivering the desired impact. Nothing more. And nothing less. Without debate, this can be both uncomfortable and unfortunate. As service professionals, we are conditioned to believe that every possibility deserves pursuit. Our ambition is matched only by our perseverance. It is but a few degrees that separate our traditional outlook from our almost entirely unrestrained optimism.
Even so, there will be instances when an honest Assessment, concentrated on the resources, capabilities, and circumstances necessary to produce a meaningful outcome, will render us an unpleasant verdict. And it will always be against the grain when we heed our intuition and experience that tell us the following is true:
Our resources are misaligned with the desired outcomes.
The expectations exceed our capabilities.
The timing is wrong or off.
Yes, sometimes the truthful answer is that we are not the best solution. Like in those rare instances in our stores (Big Peach Running Co.) when we have pairs of shoes scattered about us, sometimes a good fit does not exist. Square peg. Round hole. The voice inside your head telling you, “This won’t work,” is right. Move on. The discipline to walk away creates capacity for better opportunities. More importantly, it preserves – even engenders – credibility. And it is this currency that ensures a brighter future more than any single sale or contract ever can.
The Assessment as Confirmation
Now, the much better news: most Assessments will identify something that suggests moving closer. In other words, you can verifiably assist. Hooray! Your organization or operation very much has resources or solutions that will make a meaningful difference. The ground between a hopeful aspiration and its eventual attainment is the space you occupy.
When this occurs, it’s almost impossible to contain your enthusiasm. Because of the Investigation you’ve done AND the Assessment you’ve completed, you now know something too good not to be shared. And when it’s time to let the prospect, client or customer know, you will not, simply, be selling hard something you can offer… You will be evangelizing something you have good reason to believe!
I’m Not an Exchange Student. I’m a Student of the Exchange.
Once we determine through the Assessment that genuine value can be created, the process advances to its final action: Exchange.
Its absence is why many promising relationships ultimately fail or fall apart.
Why?
It’s not because there is a lack of delivery of high-quality service or goods. And it is not because there is a lack of definition to the agreement. It is not even due to a lack of clarity with expectations or procedures…
It is, simply, a common result when we are crystal clear on the definition and measurements of success for the other party without equal explicitness for our own well-being. We become singularly focused on creating value for others to the extent that we neglect ensuring it for ourselves. The benefits are bountiful - - but the mutual is missing.
Partnerships are optimized when there is a connected and recognized overlap of self-interest by two or more entities. It is not that all parties need or necessarily want the same thing - - but there is an anticipated benefit to each party through the expected outcome. Yes, if you get yours, I eventually need to get mine. Psychiatrist and Taking Care of Business author, Dr. David Viscott, wrote it more poetically: “To love and be loved is to feel the sun from both sides.”
Unfortunately, there is no naturally occurring homeostasis for such a desired condition. For most of the world, selfishness and survival instincts make it difficult for people and organizations to go beyond looking out for themselves… For some service businesses, the challenge is contrary. It is, instead, the habituated impulse to serve that too often minimizes organizational self-care.
So let’s tell it as it is: Service industry leaders should faithfully demonstrate how the most valuable relationships are never lopsided or transactional… But in our businesses, they should be conditional. Our clients and customers are not our kids (despite their occasional tantrums 😉 ). It is fully appropriate for organizations to keep unveiled their intent and requirements to service their own interests. If this does not happen frequently enough, the music stops altogether—and everyone in the room is finished dancing. Moreover, when we are dissatisfied with our own upside, it is difficult to remain energetic about any agreed-upon arrangement. Without question, delayed gratification will sometimes (regularly?) be necessary. And there will always be instances when an immediate gain is forsaken for an even grander fortune and future. Still, the ultimate and necessary reality is that we must experience some payout from the first position.
This is the assurance of the Exchange.
In the first couple of steps with Value Creation, we learned what we needed to do (Investigation) and we validated what we had to offer for the betterment of others (Assessment). The Exchange ensures we get what we want from the relationship that will be impacted by that Investigation and Assessment. More specifically, we must now define what ensures success and satisfaction from our efforts to ourselves so we can fully commit to an objective exchange of reciprocal Value Creation.
Author note: This straightforward guidance with Exchange should not be perceived as a slap-in-the-face to “doing well by doing good.” You and I should make generous donations whenever possible AND regularly take care of others without expecting anything in return. So should everyone else. Heck, even if benevolence is not the correct approach for every leader (although I believe it is), my personal experience submits those who prove to be total takers on a truly service-minded Team will eventually be organizational outcasts...
Nonetheless, pure altruism and charity are usually unrelated to the noble, important and strategic aims of Value Creation.
Defining Our Side of the Equation
When surveying our own prospective satisfaction, it is likely unsurprising that revenue and profit may be part of the answer. And for these predictable elements, we have a right and responsibility to forecast totals, complete with net margins and payment terms in mind.
But these financial figures should rarely be the only entry into the equation.
Perhaps the relationship provides access to a new market or opportunities for future expansion. Maybe it strengthens brand credibility or points to recurring business. Further away from the topline, there is a possibility that it improves operational efficiency or opens a network to needed service providers or prospective Team Members.
These examples are just that – examples. But define success beforehand. Write it down. Share it aloud. Make it trackable or, at least, observable. And regularly evaluate it against these now confirmable statements and established standards.
Final Thoughts
As we said at the start, Value Creation is not a pitch. It’s a wonderfully repeatable process. And it is a plan. It’s a plan that is specific, orderly, and full of applications that are easy to understand. It is a plan that can become quantitatively valuable and never heavily dependent on any single individual. Best of all, it is a plan that always features a process we can repeatedly implement and consistently improve.
It goes something like this:
• We conduct an Investigation of a prospect to determine and understand whether measurable possibilities exist to deliver value to current or forthcoming efforts.
• We complete an honest Assessment of our own resources to determine and understand whether there is an arrow—or multiple arrows—in our quiver that enables us to hit the target where the value would be visibly created for the prospect.
• We develop and propose an Exchange with the prospect through the unique resources we possess for something from the prospect that is also unquestionably of value to us.
Investigation helps us understand others. Assessment helps us understand ourselves… And the Exchange ensures that everyone benefits and desires to do it all over again!
Until next month,
Build it strong, y’all!
For easy access to past installments of The Monthly Mortar, please use this link.