This Focused Performance Weblog is a "business management blog" containing links and commentary related primarily to organizational effectiveness with a "Theory of Constraints" perspective. TOC is noted for its applications in Project Management and Multi-Project Management (Critical Chain) and Operations Management (Drum-Buffer-Rope), as well as in Marketing, Strategic Planning and Change Management (TOC Thinking Processes). If you are on an archive page, current postings are found here.
Wednesday, April 02, 2003
Double-Digit Growth in No-Growth Times -- A bit of respite from the recent project management theme, this Fast Company article should sound familiar to proponents of the Theory of Constraints approach to defining real value propositions...
"Slow growth does not have to last forever. We've detected a promising response to the growth crisis. It's being pioneered by a handful of companies and business units with spectacular track records...[that] share one exciting trait: They have managed to create impressive revenue and profit growth in no-growth or slow-growth markets.
"What's their secret? These companies have discovered a new [? - fp] way to grow. They are focused on creating revenue, profits, and shareholder value by addressing the issues that surround their products rather than by simply improving the products themselves. They have shifted their approach from product innovation to demand innovation. At the same time, they are delivering these innovations by mobilizing assets that reflect their history and expertise: unique customer access, an installed base of products, a special window on the market. They focus on hidden assets that go beyond balance-sheet items such as factories, R&D labs, and real estate."
Sure sounds like the basis of the good old "Mafia offer," described in Goldratt's book It's Not Luck almost 10 years ago (and known in more politically correct circles as "unrefusable, implementable offers"); what I refer to as Market Focus Offer Development.
Combining a view into your customers' constraints and core conflicts and shaping the offering that wraps around your products to address constraint related problems is the way to help them see real solution-based value, and enhance their willingness to pay for it, hence "unrefusable." On the "implementable" side, recognizing that while a well-run organization is limited by a constraint that it understands inside-out, that also implies that it understands the "free" capabilities and capacities of it's non-constraint assets and processes. It's these non-constraints that define hidden assets that can be exploited to support innovative offers and resultant demand. This combination of "demand creation" and "demand fullfillment" are the two sides of a valuable constraint-based strategic coin.
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