E89: Deliver Value Installment #2: Organization Leaders Want Value-Driven Outcomes

Hello and welcome to the KnolShare with Dr. Dave Podcast.  I am Dr. Dave Cornelius, your host.  For those who have been listening and receiving value from this podcast, I thank you for the support.  If you are new, welcome.

 

The Deliver Value series is a set of topics that will be included in my upcoming book called Deliver Value: Happing contributing people, satisfied customers, and thriving business.    Since the COVID-19 pandemic, I have been struggling to finish this book, so I decided to use a lean-agile approach.  Each month a topic from the book will be released as one of my podcast episodes to create the Deliver Value series.  The second installment of the series is titled “organization leaders want value-driven outcomes”.

 

The goal of agility measures is to keep track of the most value-driven factors to lead business success.  – Pearl Zhu

 

The conversations that I commonly have with organization leaders can be summarized into the desire to 1) maintain and increase gross margin, 2) increase brand loyalty, 3) attract and retain resilient people, 4) practice agility, and 5) leverage risks for exponential gains.  These are the five core practices that leaders can use to help an organization thrive. 

 

1 - Maintain and Increase Gross Margins

 

Gross margin (GM) is the amount of money earned from the sales of products or services.  The higher gross margin value indicates the profitability of a company, which means more money available for investments and a sign of financial health.  To calculate gross margin, you subtract Cost of Goods Sold (COGS) from Net Sales Revenue. Leaders become concerned and frustrated when gross margins are negative because it is a sign that expenses or sales are not performing as planned.  The response is often the proverbial tightening of the belt that leads to layoffs and cost cutting.  However, when gross margin is positive, leaders can use this information to drive strategic decisions that include offering discounts to customers to increase sales and outpace the competition.  Gross margin should not be the only key performance indicator (KPI) that leaders use to determine profitability because not all expenses are included in the calculation.  

 

2 - Increase Brand Loyalty

 

The importance of the pursuit to protect and expand brand loyalty creates an environment that will help create happy customers and a healthy brand, which often leads to recurring revenue streams.  My great grandmother would often tell me “A bird in hand is better than two in the bushes”.  This simply translate from a West Indian colloquial proverb to mean focus on the things you currently have in hand but do not ignore what is possible. The cost to attract new customers can be significantly reduced when a Net Promoter Score (NPS) is high with a value of 9 or 10, and people are singing praises about a product and service to other people in their network. Often referred to as word-of-mouth advertising.  NPS is more than just a score, it represents actual feelings about your company, products, and services.  Buying a new or expensive product is an emotional activity and it creates anxiety about whether the product or service will provide the desired value or meet expectations.  Brand loyalty is not limited to products and services but also applies to individuals delivering value to people and organizations.  Creating brand loyalty as a professional coach and trainer is equally important as the Apple or Amazon brand loyalty.

 

3 - Attract and Retain Resilient People