Setting goals and delivering value

 

Although positive, productive relationships will be your lifeblood as a new manager, you also need to get tactical. Follow these tips to ensure that you start making a difference as soon as possible after you start working as a manager:

1. Gather all the information you need. (Weeks 1–3)

How will you know what to focus on if you don’t understand the expectations, needs and goals of your supervisor, team, peers, customers and other key stakeholders? You won’t. And the consequences could be disastrous.

This is why you absolutely must get input. Immediately start scheduling informational meetings with key stakeholders. Prepare a list of good questions that will yield fertile ideas. And get ready to listen and observe like crazy. For more details on how to conduct these kinds of informational interviews, see No. 8 in our article How to ace your first week.

2. Zero in on your priorities. (Weeks 2-4)

Once you have a lay of the land — and have started building a solid reputation thanks to a few quick wins — it’s time to think carefully about what to focus on first in your new job.

Most experts recommend that you choose only three to five basic priorities. There might be a whole laundry list of items you’d like to work on, but you need to be disciplined and pick your battles. You’ll be a lot more likely to win them.

A good way to really focus is to ask yourself questions that get to the heart of the matter, such as:

• What will be most helpful to my manager, my team and my company?
• When my team and I look back on things a year from now, what do we want to be able to say we accomplished?
• What absolutely needs to happen for this team to move forward? 

Some priorities might come directly from your boss. Others might bubble up from conversations with your team or customers (make sure you always give credit where credit is due). Others may be ideas of yours that you’ve verified to be on-target during the information-gathering stage.

Examples of priorities to set during your first 90 days:

• Review and optimize all fundamental team processes.
• Meet or exceed the sales goals my supervisor expects.
• Break down communication barriers between our team and the customer success team.
• Improve my team’s morale.
• Remain one of the top-10 websites for technology news.

Tip: Try to also include some priorities that are centered on the human side of your work (e.g., Help team members create and reach long-term professional goals)and stability (e.g., Maintain the team’s status as a customer service leader).

Experienced manager Grayson Morris explains how he brought order to the chaos of a new role by focusing efforts on his top three goals.

Startup leader Jit Bhattacharya describes how his team’s planning process went from excruciating to effective.

3. Create SMART goals.

Once you’ve decided on some priorities, it’s time to get real — and real specific — about how to bring those priorities to life. In other words, you need to break them down into goals.

Stay away from lofty, vague goals. They’re tough to track, never mind reach. Make sure you create goals based on the SMART model. That means they should be:

• Specific: What exactly do you want to accomplish, in what time frame and with whom?
• Measurable: What milestones can you set to track your progress?
• Attainable: Can you really do it? Really really?
• Relevant: What matters most to you, your team and the company? Why mess around with anything else?
• Time-bound: How much time do you need to achieve the goal? How long did it take you or others to achieve something similar?

Example of a not-so-SMART goal: Eliminate long customer service calls.

Example of a SMART goal: By April 30, keep the team’s average number of customer service calls that exceed five minutes to fewer than 15 per day.

Tip: Don’t think about goals in isolation (i.e., as individual tasks to tick off one-by-one). This linear approach doesn’t reflect reality. Instead, think about how your goals interrelate. For example, let’s say you want to see stronger individual performance from your team members. That goal could also be driven by one around communicating better internally or designing more effective incentives. Make progress on one, and you’ll likely make progress on them all. And keep in mind that sometimes goals won’t advance one another; instead they could detract from one another.

Once you determine how your goals are connected, it will likely become more clear which ones are the most important, and how you can best allocate resources and time.

4. Communicate your priorities and goals. Until you sound like a broken record. (Weeks 4-12).

How you communicate your priorities and goals is just as important as which ones you choose. If you fail on this front, you simply won’t get any traction, and a few months down the road, your plan will be a distant, foggy memory.

Some experts have conducted research indicating that ideas aren’t internalized until they’ve been communicated 22 times. That’s a lot. Clearly, talking about or emailing your priorities and goals once just isn’t going to cut it!

You need to think about both how to relay your message, and the best media to use in doing it. And then you need to do it again. And again. And again. Think about this question whenever you tell or write to people about your intentions: What’s in it for them? The best way to get people to pay attention is to answer that question and address it immediately.

You should also consider the different forms of communication at your disposal. Do you want to give a presentation? Hammer home your priorities during one-on-one and group meetings? Use thank-you and update emails? Leverage your company’s intranet?

5. Enact your plan and measure progress. (Weeks 5-12)

Your priorities and goals won’t be perfect. That’s OK. If they are 80 percent of the way there, it’s time to run with what you’ve got. Break each SMART goal down into action items. Start delegating. And track your results. Every mini-goal reached along the way (or missed) is an opportunity to communicate your message, thank or course-correct your team, and ensure your legacy as a great manager.

For a full list of activities that we recommend you complete during your first 90 days, see our New manager to-do list.

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There are just 10 basic values

 There are 10 categories or types of basic values. Those values, along with some curious findings from the research—about what values are, what values we share, and how our individual values differ—are below. I’ve bolded the main ideas in case you want to skim!

by Chris Bailey

Personal values are often written about but, as I recently realized while exploring some of the research, they’re also poorly understood.

What are values, even? As one terrific summary published in Nature Human Behaviour put it, values are “broad, trans-situational, desirable goals that serve as guiding principles in people’s lives.” Basically, they’re the core of who you want to be as a person and reflect what you consider to be important, worthy, and desirable.1

For example, you might value achievement, and see each accomplishment as a further realization of who you wish to become. Or, you may value tradition, and see living true to cultural and religious customs and norms as the way to a good life.

There are some consistencies in what we all value. For example, most of us tend to prioritize caring for others more highly than dominating and controlling others—the latter two “are among the least important values to most people in most societies.”

Benevolence and self-direction (described below) are usually near the top of the values we all share. Each of us also has an internal hierarchy of values, where we rank our values based on those we find extremely important to those that don’t really motivate us at all.

Most curiously, while many long lists of values exist, at a fundamental level there are really only 10 basic human values. Perhaps the most reliable theory of values was developed by Shalom Schwartz. Since the original publication of the list in 2012, his theory has been validated by more than 300 samples across 80 countries.

In the theory, Schwartz defines 10 basic values from which all others stem—think of these as types or categories of values. Here they are, along with a brief definition, pulled directly from the literature review in Nature Human Behaviour:

1. Self-direction: Independent thought and action: choosing, creating, and exploring
2. Stimulation: Excitement, novelty, and challenge in life
3. Hedonism: Pleasure and sensuous gratification for oneself
4. Achievement: Personal success through demonstrating competence according to social standards
5. Power: Social status and prestige, control or dominance over people and resources
6. Security: Safety, harmony and stability of society, relationships, and self
7. Conformity: The restraint of actions, inclinations, and impulses that are likely to upset or harm others and violate social expectations or norms
8. Tradition: Respect, commitment, and acceptance of the customs and ideas that traditional culture or religion provides
9. Benevolence: Preservation and enhancement of the welfare of people with whom one is in frequent personal contact
10. Universalism: Understanding, appreciation, tolerance, and protection for the welfare of all people and of nature

Of course, these 10 basic values are just that: basic. There are other values nested under each umbrella. Here are some examples of these sub-values, again drawn directly from the review:

• Self-direction: Freedom, creativity, independence, choosing your own goals, curiosity
• Stimulation: Exciting life, varied life, daring
• Hedonism: Pleasure, enjoying life, self-indulgent
• Achievement: Ambitious, capable, influential, successful
• Power: Social power, wealth, authority
• Security: Social order, national security, family security, reciprocation of favours, cleanliness
• Conformity: Politeness, self-discipline, respect for elders, obedient
• Tradition: Respect for tradition, modest, humble, accepting my portion in life, devout
• Benevolence: Loyal, responsible, honest, helpful, forgiving
• Universalism: Equality, unity with nature, wisdom, world of peace, world of beauty, social justice, broad-minded, protecting the environment

Here’s where things get even more interesting. As you might have noticed, certain values oppose one another—like self-direction and conformity, or power and universalism. It’s even possible to arrange these values into a pie chart of sorts, where values opposite one another are at conflict, and those adjacent to one another are complementary:

The values outlined in Schwartz’s theory can be found in children as young as five, and research has found that what we value stays surprisingly consistent over time.

As far as understanding your own values, knowing the 10 basic values from which all others stem is a great place to start. It’s worth reflecting on which values from Schwartz’s list you care most about. Doing so can help you connect with yourself on a deeper level.

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1. This article draws a lot from Nature’s literature review, which unfortunately sits behind a paywall. If you’d like to read the source study, however, one is linked to on ResearchGate.

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Business Model Canvas For Beginners. 9. Cost Structure – How To Minimize Costs And Maximize Value

 In this last section, I’ll walk you through the cost structure building block of the business model canvas. I’ll explain the different types of costs and show you the key questions every entrepreneur must be able to confidently respond to when analysing the business model.

You will learn about the different types of cost structure: fixed and variable costs and they can have benefits through economies of scale or economies of scope.

What Is The Cost Structure In The Business Model Canvas?

The Business Model Canvas cost structure describes the costs that business occurs through its operations. These include employees, infrastructure, costs associated with all activities as well as sourcing through key partnerships.

Business Model Cost Structure

The Cost Structure of the Business Model Canvas

The cost structure building block presents all the costs that you incur as a business. 90% of new businesses fail in the first 3 years because they fail to understand their costs or what it will take to create the goods and services they have promised in their value propositions.

In another study, CB Insights looked at the post-mortems of 101 startups to compile a list of the Top 20 Reasons Startups Fail. The number two position ‘ran out of cash’.

When reviewing the cost structure block you need to recognise where your main costs will be:

• Key Activities
• Key Partnerships
• Customer Relationships
• Channels

Key Questions To Ask

When doing an analysis of your business model, it is vital to ask the following questions when filling in the Cost Structure building block of the business model canvas:

1. What are the fundamental costs derived from my business model?
2. Which Key Resources represent a significant expense to the business?
3. Which Key Activities represent a significant expense to the business?
4. How do your Key activities drive costs?
5. Are the above-mentioned activities matched to the Value Propositions for your business?
6. By exploring different permutations of your business model, do the costs remain fixed or become variable?
7. Is your business more values-driven or cost-driven?

What Are The Different Types Of Cost Structure?

Cost-Driven

This kind of approach concentrates on reducing costs as much as possible. This can be done through outsourcing and automating wherever possible.

Examples include:

• Aldi
• RyanAir

Value Driven

This is a more value centred approach which focuses on maximising worth for the customer. This approach focuses on a highly personalised and tailored service that really focuses on minimising Customer Pains and increasing their Gains.

Examples include:

• McKinsey
• BBDO

Characteristics of Cost Structures

How costs work depends on their characteristics. It’s important to appreciate the difference between fixed costs, variable costs and ultimately being able to calculate your break-even point.

Fixed Costs

These costs are usually a fixed percentage of your overall costs. While they do change, often incrementally they remain fairly staple.

Examples include:

• Amortization. This is the gradual charging to expense of the cost of an intangible asset (such as a purchased patent) over the useful life of the asset.
• Depreciation. This is the gradual charging to expense of the cost of a tangible asset (such as production equipment) over the useful life of the asset.
• Insurance. This is a periodic charge under an insurance contract.
• Interest expense. This is the cost of funds loaned to a business by a lender. This is only a fixed cost if a fixed interest rate was incorporated into the loan agreement.
• Property taxes. This is a tax charged to a business by the local government, which is based on the cost of its assets.
• Rent. This is a periodic charge for the use of real estate owned by a landlord.
• Salaries. This is a fixed compensation amount paid to employees, irrespective of their hours worked.
• Utilities. This is the cost of electricity, gas, phones, and so forth. This cost has a variable element, but is largely fixed.

Variable Costs

These types of costs change depending on the number of goods and services produced by a business. These include things like raw materials, shipping costs web hosting servers.

Here are a number of examples of variable costs, all in a production setting:

• Direct materials. The most purely variable cost of all, these are the raw materials that go into a product.
• Commissions/Affiliate payments. A commission is an additional compensation a company gives to its employees. Employees may receive commissions for exceeding their expectations and meeting the company’s requirements. Most companies give sales commissions at a rate predetermined in a contract agreement.
• Shipping Costs. Shipping costs refer to the expenses incurred when a company moves its products and raw materials from one point to another. This can be through water channels, roads, air or railways. Shipping costs are variable in the sense that they tend to change with the production and sales volume.

Economies of Scale

Economies of Scope are savings generated when the cost of producing a range of products together is cheaper than manufacturing them individually. For example, several products may share the same marketing activities or Distribution Channels.

One of the advantages of big organizations is that they benefit from the fall in costs with higher volumes which spread fixed costs more thinly making the cost per unit fall dramatically; hence the average cost per unit is reduced. As a result, a bigger company will have a lower cost per unit output than a smaller company. An example is when a big company buys and gets a much lower cost than a small business.

Economies of Scope

Economies of scope refer to the reduction of costs when a business invests in multiple markets or a larger scope of operations. The average cost of production decreases if a company opts to increase the number of goods it produces.

Economies of scope based on product diversification are only achieved if the different products have common processes or share the use of some resource. Hence spending on marketing the products or distribution channels may lessen per unit if both products require similar marketing efforts or use the same distribution channel.

Economies of scope have multiple advantages for the business:

1. A great deal of flexibility in the design and mix of the product
2. Increased response rate and decreased response time to market-driven changes
3. Processes are repeatable with a higher degree of control over their execution
4. Costs are reduced because wastage is minimized in this particular business model
5. Organizations can more accurately predict changes and cycles
6. Software and hardware utilized more efficiently
7. There is less risk associated with a company which sells multiple products, or targets multiple markets or does both. Even if one product or market falters, the company will have alternatives to help tide it over while it readjusts strategy.

Contingency Costs

A common mistake is to underestimate the day to day expenses or odd things that crop up that you haven’t thought about. These might be legal costs e.g. filing patents…it could be anything. The fact is that most entrepreneurs under-estimate daily expenses as well.

The solution is to allow for an overall contingency percentage in your budgeting. A typical figure of ten per cent will suffice until you do the detailed budget planning.

How To Do Some Research On Cost Structurecos

Within a market that has a dominant business model companies often have similar partners, activities and costs associated with sales and marketing. By looking at their publicly available reports you can get a good sense of what costs they incur as well as the costs associated with sales and marketing.

Another benefit of this is to use this information to then consider how you can change the business model, change the cost structure and therefore produce a more sustainable competitive advantage.

Doing your research will eliminate the risks and help to produce a successful business model design.

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The ValueHub™ Theory (2)

 You may first want to read part one - bit.ly/3eWYdMo

If you already have, let’s have a look at how the ValueHub™ theory evolved into the shape and layout of the ROUNDMAP™.

The 4th step was a major one. Since engagement depends on two interconnecting parties – employee engagement (inner circle to the firm’s ValueHub) on one hand and customer engagement (outer circle of the buyer’s ValueHub) on the other – I started to perceive it as two circles (in opposite direction) interlinking the two ValueHubs, while both are probing, sensing, scanning, exploring, and messaging each other. This is what Porter referred to as ‘signaling’:

As we’ve discussed in the first part, the theory of the ValueHub™ came from describing the content intake, curation, and delivery process of a radio station. This then led to an hourglass-type shape, containing two funnels, one of Value Intake (inward) and one of Value Delivery (outward), with a Value Creation process in the middle. By replacing ‘content’ by ‘value’ and ‘curation’ by ‘creation’ the ValueHub™ came to be.

Value creation is the performance of actions that increase the worth of goods, services or even a business. Many business operators now focus on value creation both in the context of creating better value for customers purchasing its products and services, as well as for shareholders in the business who want to see their stake appreciate in value.

This representation allowed us to conceptualize the following situation: one ValueHub™ having a surplus of value (derived from the value it created) whilst another ValueHub™ experiences a deficit (relative to the value it wants to create or obtain). If both agree to exchange value (for credit), the value will start to flow from one hub to the other until the mutual value differential is being neutralized, i.e., the customer’s need fulfilled.

Competitive differentiation, and therefore competitive advantages, can be derived from three phases of the ValueHub™: Intake, Creation and Delivery. Value Capture is the process of retaining some percentage of the value provided in every transaction, it can only be minimized or maximized.

Signaling

How do ValueHubs become aware of each other value surplus and deficit?

Signaling does. Michael Porter made a distinction between market and customer signals in his bestseller Competitive Advantages. While potential buyers signal their needs – by searching online, browsing your website or any behavior that indicates customer intent – sellers, obviously, send out signals too. PR, blogs, advertising, and webinars are just a few examples of signals to let potential buyers know about the value they have to offer.

Therefore, certain signals will drive buyers towards the firm. Porter suggested two criteria: signaling criteria and use criteria. Use criteria are what the solution is intended for (functionally and emotionally), while the signaling criteria involve channels, formats, brand image, etc.

Obviously, buyers receive signals from multiple sellers. The firm. therefore, needs to signal what is called ‘differential value’:

Differential value is the economic expression of the unique portion of your value proposition.  It is your next best alternative. As such, differential value adds knowledge and context to the concept of “value”. It’s not just a nebulous description of what the customer gets for their money. Instead, it describes how and why the customer can only obtain this particular value by purchasing this particular product. It provides an easily identifiable means of comparing products that doesn’t rely strictly on price.

This differential value is a perception: it is most often not actual or absolute. A car made by brand X may have identical absolute value as a car offered by brand Y, at least if we consider its usability to drive from A to B. However, the perceived value from brand X over Y, and therefore the differential value of X over Y, can be significant in the mind of person 1, while person 2 might perceive the contrary. So, by signaling differential value some buyers will prefer solution A over B, while others might prefer B over A.

Chains or Streams

If we are to represent the ValueHub™ theory in a value chain, value stream, value network or value pool (or what have you), it will look like this:

For example, a car manufacturer requires steel sheets from a steel factory (#1) to be able to mold the sheets into body parts of the car. After the car is assembled (#2) and distributed to a dealer (#3), it can be sold to a customer (#4), who uses it to drive to work to make an income. Most ValueHubs require value from other ValueHubs to be able to create, deliver and capture value.

Traditionally the customer is the end-node of a value chain, but with the rise of the prosumer, we’ve seen more and more consumers actively participate in value chain processes.

Engagement

While signaling differential value attracts some buyers to the firm, it requires engagement from both parties, not just to deliver one-off value but to keep the relationship ongoing. Employee and customer engagement are therefore two separate circles – an inner and an outer circle – as each serves its own value creation process.

Buying Stages

However, there was another aspect I had to consider to complete the picture. Signaling does not lead to purchase by itself: customers need to be informed, persuaded, and so on, to get them to purchase and return. In other words, the process of buying and selling goes through several stages or steps.

Ok, now let’s focus on the firm’s Value Delivery section (surplus) and the customer’s ValueHub:

and while keeping the firm’s ValueHub™ in the center, represented by the + sign, now map the buying stages transitioning around it:

OK, let’s turn this into a more conceptual perspective:

Again, in the middle is the firm’s ValueHub™, represented by a + sign. The potential customer is represented by an empty hourglass (1). Turning clockwise: if the marketing signals are relevant, the customer may want to investigate similar solutions (2). However, if the signals are not relevant the messages will be ignored. If the solution offers more differential value than other solutions and the firm is trustworthy, the customer will likely purchase (3), if not, he/she will leave (dashed line).  If the product meets the customer’s expectations, he/she will be satisfied (4). If not, he/she will likely complain, or worse, return the product. If the customer has a perception of future value, he/she will likely want to become engaged in an ongoing customer relationship and return (1).

ROUNDMAP™

Obviously, the ROUNDMAP contains not 4 but many more steps. Regardless, you now understand how the ROUNDMAP™ evolved out of the ValueHub™ theory.

The best way to perceive the ROUNDMAP™ is a representation of your firm’s ValueHub™ (located in the middle), while it signals differential value to (potential) buyers and at the same time receives signals that it needs to interpret, in order to progress buyers (step by step clockwise) through the Integrated Customer Lifecycle™.

 

However, as we discussed, some lifecycles will be completed, others will stall. A way to perceive these dynamics is the following animation:

We’ve enjoyed describing our theory and we hope you find it useful in understanding the ROUNDMAP’s circular logic.

EDWIN KORVER

Architect of ROUNDMAP™ - Advancing Grandmastership of Business™ ✪ Business Model Matrix™ ✪ Polymath ✪ Generalist ✪ Systems Thinker ✪ Board Member, CEO CROSS-SILO BV

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