Value creation the definitive guide for business leaders

SAGE was founded in 1965 by Sara Miller McCune to support the dissemination of usable knowledge by publishing innovative and high-quality research and teaching content Today, we publish over 900 journals, including those of more than 400 learned societies, more than 800 new books per year, and a growing range of library products including archives, data, case studies, reports, and video SAGE remains majority-owned by our founder, and after Sara’s lifetime will become owned by a charitable trust that secures our continued independence Los Angeles | London | New Delhi | Singapore | Washington DC | Melbourne Advance Praise This is a rich and rewarding book which will launch organizations into the world of value creation for customers and other stakeholders and will convert good CEOs and companies to great ones with longevity and higher profitability This book is a conceptual breakthrough which goes beyond the great Total Customer Value consulting work Gautam did for Godrej —Adi Godrej Chairman, the Godrej Group This book is a classic because it will change managerial thinking just like Tom Peters did in In Search of Excellence Value Creation: The Definitive Guide for Business Leaders will shift managerial focus to creating value for the entire business ecosystem and not just for the shareholders It will make firms agile, adept, and visionary for the future The book will cause CEOs to think, change mind-sets, and become creative, winning the future It will create more astute and alert executives, and increase profits The book gives ideas about creating value at different levels for employees, customers, and shareholders If you want to be successful and win in the future, you should not miss this trendsetting book —David Frigstad Chairman, Frost & Sullivan For those who want to learn to create value, you’ve come home to this brilliant book This book integrates hugging customers and customer-centricity to unleashing the power of value creation for business success This eye-opening book is about common sense, and gives you instantly practical ideas without being a burden on your time Incorporating Gautam Mahajan’s uniquely creative concepts will change your mind-set and lead you to superior achievements —Jack Mitchell Chairman, Mitchells Family of Stores; Author, Hug Your Customers and Hug Your People I enjoyed Gautam Mahajan’s recent book, Value Creation: The Definitive Guide for Business Leaders It is very timely given the ­current conversations about value creation around the world and the waste created by driving stock prices on a quarterly basis with rewards going to a limited few The book is a valuable catalyst, which should result in a more robust dialogue about long-term value creation for enterprises large and small The key take away is that customer-centric businesses create value for all stakeholders which should result in higher valuations and stock prices over the very long term —Edward A Lapekas Retired CEO and Chairman of the Board, American National Can Group and former President and Chief Operating Officer, Beverage World Wide Division, Pechiney (later Rio Tinto) Insightful Full of harsh realities about the world of marketing and management as you know it Gautam suggests a new vision, common sense and human authenticity an excellent springboard for a much needed ­marketing turnaround Marketing with Meaning! —Professor Luiz Moutinho Foundation Chair, Marketing Adam Smith Business School, University of Glasgow, UK Adjunct Professor, Marketing, Graduate School of Business, University of South Pacific, Fiji Founding Editor, Journal of Modelling in Management (JM2) The days of waging battle against customers are gone Now, ­success comes from getting in the trenches with the customer and working toward a win–win outcome To survive in a world of supremely educated buyers who, above anything else, are ­time-poor, hungry for insight, and demanding progress, unless you can assume the customer’s perspective, enriched by your experience with other similar customers, your outcomes will never be great This is the time to create value for your customers and in this book Gautam provides priceless signposts to get started on that journey —Donal Daly CEO, The TAS Group; Author, Account Planning in Salesforce I loved this book No one globally knows more about buyer–seller dynamics than Gautam Mahajan, author of Value Creation: The Definitive Guide for Business Leaders Likewise, no one knows more about how senior management should change these dynamics to create new value for both company and customers—which in some cases multiplies the bottom line, rather than just lifting ­profits incrementally As Gautam relates, too many CEOs and senior managers discount the payback potential of adding customer value But he believes these executives will soon regret their reluctance to embrace customers when their companies start experiencing limited growth and diminishing value in the near and long term He peppers his clearly written, no business-speak narrative with real-life examples of companies both creating and destroying enterprise value His examples should persuade most CEOs and management readers to change course in the direction of true customer-centricity that taps into customer value, rather just talking the talk without walking the walk Unfortunately, as Gautam reminds us, most graduate business programs resist change and continue teaching future executives to embrace cost-control as their primary goal, which can doom them from the start He also throws shade at the commonplace corporate practice of focusing first on increasing shareholder value— which Jack Welch calls “the dumbest idea in the world.” Creating shareholder value is an outcome, not a goal On a practical level, Value Creation: The Definitive Guide for Business Leaders lays out for CEOs and senior managers the change process for moving their organizations from company-centric to real customer-centricity And when their companies start adding value to customers, they typically get a long leg up on still inwardly focused competitors Gautam does not let go unscathed those companies trying to accrue value to themselves by stripping value away from customers He addresses fundamental shortcomings of common win–lose strategies that ignore the latent opportunities for sellers to extract more value from customers Instead, he urges CEOs and ­executives to focus on win–win opportunities to add value to customers, in ways that will add value back to the company, especially at a time when customers are gaining new power and customer loyalty is eroding at an alarming rate For CEOs, senior execs and middle managers wanting to anticipate where higher-ups are steering their companies and ­ why, Value Creation: The Definitive Guide for Business Leaders is without question the right book at the right time —Dick Lee Author, We Are Buyers You Are Sellers You’re Busted This book is fantastic, a 10 out of 10! Gautam provides CEOs with a practical guide to rediscover the customer relationship as an ­ inspirational source of innovation that is applicable to any i­ndustry, and is very much needed today to drive lasting ­competitive advantage for sustainable, profitable growth! —Brent Zions Value Creation Transformation Consultant This book is a gem! While it is geared to CEOs, its style will be appreciated by anyone interested in helping their organization maximize the long-term value they create and minimizing the short-term value they destroy Sprinkled throughout this book are real-world examples from real companies, analyses from widely respected sources, and references to articles which are available to everyone If you are either beginning the value creation journey or updating your successful strategy, you should look no further than this book for information, inspiration, and insight —Sam Klaidman Principal Adviser, Middlesex Consulting Does a CEO want to make the stockholders happy or extra happy, or would he want his employees engaged or passionate about their jobs? Also, would he want his customers to be satisfied or to be loyal customers? Well this doesn’t happen by chance, in fact so many companies and organizations around the world need to read this excellent book by Gautam Mahajan covering a great assortment of very important topics This is a must read for e­xecutives, ­practitioners, and professionals who will see so many of the ­different components to create customer value in their ­organization I use this book as a desk reference and finding myself referring back to the many critical topics Gautam is truly a respected global leader, speaker, editor, and mentor —Jim Carras Chairman, Customer Value Creation International In this excellent, very important book that supplements and extends the theory of value innovation and the creation of “blue oceans” as described by Kim and Mauborgne, Gautam Mahajan describes the priority, strategy, and difficult complexities of value creation as the core of a new generation of investment and management theory and practice that is now required in all businesses The book clearly explains why a fundamentally new type of investment and CEO leadership is required and has to be supplemented with new C-level executive positions in order to focus the organization and its partners on creating new value for customers in order to survive past an average life expectancy for businesses that has decreased to about 12 years while creating value for all stakeholders including employees, business partners, and society —William L Miller CEO, Innovation Extension Center LLC Gautam Mahajan has created a new handbook for customer value New ways of intelligent and outcome-oriented thinking are ­combined with an individual approach for the 21st century in management and benchmarking of value-driven customer s­ ervices The book is highly recommended for the CXO level as really important, as well highly recommended for lecturers and students in international business schools —Urs Hauenstein President and Visiting Professor, International Council for Leadership, Governance, Entrepreneurship, Management, Swiss Quality Competencies and Qualifications This book isn’t just good reading, it’s a new mindset If you are a CEO, it will help you build your company successfully As a result of applying the concepts in this book you will create value for your customers and for your company Additionally, apply the long-term strategies outlined in this book, in detail, and you will see that success is so much more than something that can be captured by having short-term focus A concept in this book that is examined carefully is how to create value for your customers before you can take value from your ­customers What an incredible idea, giving more so you can receive more As a business owner who has always presented a “Nice is Right” strategy, I can relate to the author of this book He really “gets it.” If you own a business, run a business or just want to find out the importance of adding and providing value to your business relationships, this is the book for you A must read —Doug Sandler Author, Speaker, HuffPost Blogger Nice Guys Finish First #1 Best Seller Ranking on Amazon A content-rich framework for creating sustainable value to your customers, employees, partners, suppliers, distribution ­channels—and thereby, ultimately to stockholders—in a series of stand-alone, yet connected, chapters There is something within the material for everyone, irrespective of where you may be on your customer-focus journey Gautam Mahajan will have you finding fresh new opportunities to powerfully lever the word “value” for your business —Harvey Thompson Author, Who Stole My Customer?? Winning Strategies for Creating and Sustaining Customer Loyalty (Second Edition) Former Head of Customer Value, IBM Every CEO’s job is about creating and delivering value to all stakeholders And this book is guaranteed to start the CEO’s day on the right track—that of understanding and focusing on key aspects of internal and external customer value, presented with an easy ­narrative style that helps refocus on the fundamentals of ­addressing customer expectations Better than your first cup of coffee! —Kall Ramanathan Value Creation & Strategy—Blog website The Mobile Ecosystem in India—Blog Creating customer value is essential for success, and Gautam Mahajan’s latest book is a must reading on how to it! It really is good It flows well, has great substance, a solid logic which causes one to think and helps put many conflicting concepts in their proper place —Ray Kordupleski Founder of Customer Value Management; Author, Mastering, Customer Value Professor, Customer Value, University of Montana, USA Yesterday, the landscape for competitive business owners extended between the Yellow Pages and a 20-mile radius around your consumer Today, competition is global With efficiencies in technology and greater access to consumer information, the edge is no longer guaranteed to the company with the biggest marketing budget—it’s going to the company that offers their customers AP-28  VALUE CREATION Customeric Customeric is a word coined to show that a company has the Customer-in-center The Customer is the center of its strategy, its focus The company is Customer-centric, takes Customer responsibility, measures Customer data and lets Customer thought lead the business Customerized Customized for each individual Customer Dealing with Customers Talk to Customers because you learn a great deal by doing so Try to get known by Customers, as often buy from ­anonymous people/suppliers Make it easy for Customers to find you Make them feel less anonymous Companies should be loyal to Customers if they expect Customer loyalty Take Customer complaint seriously and have a complaint resolution mechanism in place Avoid erosion touches Eliminate Customer Defection Meet their expectation Do not ignore the Customer Improve touching by the company React quickly to complaints Make the process of registering a complaint easy for him Make the company easy to contact Build good knowledge of/information on Customer Develop an emotional bond with Customer Improve experience with company Respect the Customer by not talking down to him Front-line Employee/ Touch Point Generally the lowest on the totem pole but the most important to the Customer Face of the supplier/company General Company Beliefs They are doing “everything” for the Customer They have programs underway to impact the Customer They have insufficient bandwidth or are too busy to start a Customer Value program How Do We Get There? Customer-circles, Customer conduits, Customer-in-center philosophy, have Customer champions, reporting CVA, and Customer asset data How Do You Satisfy Your Customer? Think in terms of C2B (Customer to business), rather than B2C (business to Customer), then think of C2C (Customer to Customer), where you build a community of Customers, understand the end-use experience your Customers are looking for, provide your Customers with the products and services that provide Value and give them the experience they want Keep Your Promises Exceed Customer’s expectation and build trust and confidence Remember Customer satisfaction = perceived performance/Customer expectations Appendix II AP-29 Managing Suppliers Suppliers should be treated like Customers; you should develop a true relationship with your suppliers Ombudsperson The concept of an ombudsperson to resolve disputes will reduce complaints going outside the company Should be easy to find, reach, and work with Should resolve problems fast Path to To achieve strategic management, companies and their Competitiveness executive have to embrace Customer Value and Customercentricity These build competitive advantage People Value Added/ Employee Value Added This is the ratio of what your company adds to the employee versus what your competitors are adding to their employees You want this ratio to be greater than one to get competitive edge Processes, Services, Customer Value, and Customer Perception As the quality of processes, services, and products improve, Customer Value increases, and perception on price improves The price perception improvement for improved service can be studies, putting a monetary Value on service Put the Customer in Control Provide him the ability to communicate directly and painlessly with the company Realize that the Customer should have it his way Build a community of Customers and allow them to communicate with one another and with your company, and to blog or set up a message board thereby: letting him get easy information on products, shipments, and specials Giving him delivery his way (maybe he can call in and his grocery bag is ready for pick up) Remember, that if we think it is right to want to control our suppliers, we should let our Customer control us, because we are their suppliers Relevance of Work Effort from a Customer’s Viewpoint Divide your work into categories that the Customer would think of as: necessary and relevant, necessary and irrelevant, unnecessary and relevant, unnecessary and irrelevant Concentrate on the necessary and relevant tasks from the Customer’s viewpoint Reporting Customer Data Customer data should be reported on balance sheets This is being proposed by the SEC, who wish investors to know a company’s Customer assets and how the Customer assets are growing/deteriorating AP-30  VALUE CREATION Resistance to Embracing Customer Value and CVA Organizational inertia or executives feel they are doing enough for the Customer or they are into too many initiatives, and there will be a resource drain Executives feel they understand the Customer and the marketplace Executives worry about correlating Value data and satisfaction data Value studies are not well-understood or that well-advertised or pushed as satisfaction studies, which are generally run by market research companies that push satisfaction over Value Top executive are not exposed to Value as globally as they are exposed to satisfaction Return on Customer It is the Value of the Customer divided by Customer capital This is the firm’s current cash flow plus change in equity divided by the equity of the firm at the start of the period Satisfaction versus Value Satisfaction is measured soon after an event or transaction Unlike Value, satisfaction does not measure embedded feelings Satisfaction is a necessary condition for loyalty but not a sufficient one, whereas Value is Satisfaction does not equate to loyalty, unless you have competitive data People buy because they perceive better Value from your products Slippery Slopes This is the graph (generally S-shaped) of re-purchase intent or loyalty versus Value or satisfaction with price and q ­ uality It is called slippery because once you get past the very ­satisfied Customers, you tend to lose Customers very rapidly even with minor Value score losses Stated versus Implied Weights Stated weights are received directly by asking the Customer to rate attributes Derived or implied weights are obtained by statistical means, and give a better idea of the importance of different attributes in the buying decision Tools of Customer Value Management: Where Are We? Qualitative tools: What attributes are important to Customers? The Customer waterfall of needs to derive transactional attributes and benefits, and price attribute trees to derive benefits (including the product)/price attributes Quantitative tools: Where we stand versus competition? Competitive profiles, slippery slopes, Value maps Appendix II AP-31 Total Customer Value Management Total CVM is designed to have Value created for Customers and managed by the total company (by everyone in the company) Total CVM shows how this is to be done (See Gautam Mahajan’s book: Total Customer Value Management: Transforming Business Thinking) Third Party Touching Often touching is outsourced through retailers, call centers, etc We must examine third-party touching and see if your company can touch the Customer directly, or better Traits of Winning Companies Obsessive about knowing, even better than Customers themselves, what Customers want Create and manage ­ Customer expectation Design their products, services, and processes to maximize Customer satisfaction Make Customer Value everybody’s business Maintain a business philosophy to add ever-increasing Value to the Customer Have a culture driven by a vision that creates strong Customer focus Constantly ask if their proposed action will benefit the Customer, or adversely impact them Using CVA for Business Decision: Product, Service, and Technology CVA is used for business decision on products, services, and technology offerings CVA helps make business decision using the Customer’s input and point of view for pricing, for new product introduction, etc Using CVA for Pricing CVA techniques can be used for pricing of products and services and to decide on the various features to put into products CVA pricing looks at costs from a Customer’s viewpoint and is based on the relative benefits you create versus competition, and the importance of each benefit to the Customer As benefits increase, price can be increased depending on the importance of each benefit the company provides Brand is also a benefit Value It is the balance between price and quality The more the Customer perceives he gets for his money, the higher his perception of the Value It is what a product is worth to the Customer, and how he perceives the benefits of the product, given what it costs him to buy or own it Values (of people, companies) The Values, standard, morals, ethics, beliefs, ideals, and principles that a company has and reflects in its culture and its approach toward Customers and employees, environment safety and sustainability, and society AP-32  VALUE CREATION Value Creation Executing proactive, conscious, inspired, and imaginative actions that create better gains or Value for Customers and all stakeholders The main role of an executive is to Create Value for himself, his employees and his Customers and, thereby, for his investors The role of a company is to Create Value for its employees and Customers, suppliers and partners and, thereby, for shareholders Value Maps Position of your company relative to the Customer’s rating of your company and the competitors on price and quality Help you make sound strategic decision Useful in pricing and in “what if” analysis on whether to improve/reduce price, benefits, or both Value of Customer The Value of your relationship with your Customers Average Value of each relationship can be measured by the following: revenue per Customer Average length of Customer relationship: total number of referrals that became ­Customers divided by total number of Customer plus (the original ­Customer) Can be referrals (R), average spent per ­Customer per annum multiplied by relationship length with R ­(measure of referrals), Customer Value is an investment, and Value to firm (Value of Customer) is the ROI Voice of Customer and Voice of Competitor CVM is akin to the voice of Customer (and voice of competitor) Many companies use CVM studies for this purpose What Investors Want to Know? How many Customers you have? What is your profitability per Customer? How well you treat your Customers? How fast you are growing Customer franchise? What Is a Customer? An indispensable part of your business, without which there is no reason for your business to exist What Is the Purpose of a Company? To satisfy stakeholders (employees, Customers, suppliers and partners, unions and shareholders) and to Create Value for them Appendix II AP-33 What to Do for Customers Convert anonymous Customers into known ones Understand and incorporate Customer DNA into any Customer initiative Avoid erosion touches Where Do We Want To Be? Value map prioritization and focus areas to build competitive advantage Who Is a Customer? A Customer is someone who buys from you, or is a consumer, or someone who could potentially buy from you, or is someone else’s Customer Zero Complaints Zero complaints is a similar concept to zero defects It should be the intention of any company to get to zero complaints by examining hygiene factors, Customer journey, Customer experience, and everything to with product reliability, usability, and service Index aggravation centres, 167–69 anti-trust legislation, 114, 186 artificial intelligence, xxviii Arvind Eye Foundation, 26 assets and performance, 67–70 balancing act, 56–60 Baran, Paul, 10 Bezos, Jeff, Bhattacharya, V N., 35 big data, 132, 153, 155 Bill of Rights, 16, 114, 118–19, 145, 220, 239 Bindra, Vishal, 154 brand assets, 69 equity, 69, 126, 130–32, 138, 158, 163 loyalty, 202, AP–20 breaking silos, 38, 112–14 Brian, Hall J., 71 bundling mortgages, 36 Burrus, Daniel, 151 business of a company, AP–21 business strategy, 33–36, 38, 74, 156, AP–24 business value adding work, 88, 228 C-suite capitalism, 5–6 call-centre customer service, 169 Carras, Jim, 56, 164 CCIP see Continuous Customer Improvement Program (CCIP) CEOs business success, 216–18 customer value, 232 departmental tasks and priorities, 221, 224–25, 228 differentiation, 150 employee and customer assets, 214 improvement, 224 leader, 216 market share, 232 tasks and priority, 221 transformation, 120 value creation, 235–36 value creators, steps, 213, 217 change in the market environment, xxvii–xxxi chief customer officer (CCO), 237, AP–21 chief customer value creator, 12, 189, 237 chief employee value creator, 157–60, 162 chief value creation officer (CVCO), 70–73 Colao, Vittorio, 181 commoditization companies, 150 concept, 153, 155 differentiation, 150 limitation, 150 market segmentation, 151 perfect competition, 149 water as commodity, 151 commodity hell, 148, 152 companies death of, 74–75 competitive advantage, 150 competitive profiles, AP–21, AP–27 connected company, 127–28 conscious business, 3–4, 101–102 capitalism, 104 culture, 4, 104 Continuous Customer Improvement Program (CCIP), 16, 72, 76, 118, 147, 237 I-2  VALUE CREATION Cordon, Carlos, 25, 72 corporate consciousness, 103 corporate customer priority revised, 222–26 corporate social responsibility (CSR), 39 corporate unconsciousness, 102–105 creating value for ourselves, 141 customer acquisition, 222, 226, 230 advocacy, 83 advocate, 83, 87 ambassadors, 83–85 as ambassadors network, 83–84 social media, 84–85 social value, 84–85 as assets, 68, AP–22 attractiveness, 1, 9, 48, 237 capital, AP–22 care, 173–74 centered thinking, 58, 186 centric circles, 145 centric mind-set, 122 collaboration, AP–23 conduits, AP–23 conscious companies, 17, 22–23 department CEO, chief value creator, 235 chief customer officer, 237 companystan to customerstan, 238–39 functions, 236 need for, 236 on-line shopping, 190 DNA (Do Not Annoy), 95, 146, 185, 229–30, AP–21, AP–23, AP–33 effort, AP–23 equity, AP–23 experience, AP–23 franchise, AP–23 in control, 79, AP–29 journey, 174–75, AP–23 less is more, 187–190 lifetime value, 84 momentum, AP–23, AP–24 network, 86–87 of the future, 14, 33, 60, 77, 325 perceptions, 40–41 priorities, 218–21 QA experts, 146 relevance, AP–24 responsibility, AP–24 satisfaction and experience, 187 scores, 29, 32, 35, 229–30 selfie, xxxii service department, 121, 171 share marketing, AP–24 strategy, 38, 114, AP–24 value, audit, AP–25 customer relationship management (CRM), 21, 85, 203 customer strategy, 34–38 customer value concept creating, 197 index, 9, 29, 32, 35, 48, 53, AP–25 investment, 72, AP–26 journey, 174–77 management, 161, 218 management techniques, 39, 41 map, 174–75 marketing, 177–80 measurement migration (See value migration of customers) profits impact, loyalty and ­retention, 48 stock performance vs customer experience/value, 48 to company, 193 customer value added (CVA), 40, 48, AP–25 Index I-3 customer-centric-circles, 119, 145–47, AP–26 customer-circles, AP–26, AP–28 customeric, 18, 34, 221 customericness, 219 CVA see customer value added (CVA) CVCO see chief value creation officer (CVCO) Davidow, Moshe, 14, 163 de-commoditize, 148–52 death of companies competition, 76, 78–79 demand, 79, 81 value destruction, 74–75 Denning, Steve, destroying value, 44–45, 57–58, 163, 185 Disney, value creation, 65 disruptive innovation, 78, 220 Don Hale, 92 Drucker, Peter, 6, 42, 138, 156, 218 Eisinger, Jesse, employee value added (EVA), 161 employee(s) assets, 68, 157, 163 departments and, 74 journey, 138–40 lifetime value, 161 turnover cost, 137 value creation, 132 Evoloshen, 137 executives behaviour, 60 business leaders and, 17 CIOs concept, 154 customers/employee, 156 role in organization, 184 value creation implementation ideas, 183–84 fair value line, 45–46 Favaro, Ken, 64 financial incentives, 162–66 financial-incentive bubble, 7–8 firms of endearment, 26–27, 98, 103, 114 Frei, Frances, AP–11 front line people, data from, 132–33 Gaudet, Charles, 177 Ghosh, Sunanda, 123 Global Telecommunications Consumer Survey, 181 Gray, Dave, 127–28 Gurdjian, Pierre, 27 Halbeisen, Thomas, 27 Hall, Brian J., 24 Hamel, Gary, 156 hierarchical companies, 145 Hornemann, Erica Skafdrup, 159 HR professionals for value creation benefits, 164 employee lifetime value, 161–62 employees, 161–63 focus, 167 investment in employee ­development, 158 people business, 161–62 role, 162 shareholder wealth, 161 steps, 160 transformation, 148 value creator, 161–62, 166 Ikeda, Daisaku, 210 Immelt, Jeff, 148 infrastructure as a service (IaaS), 61 innovation based economy, 186 inside intelligence, value creation, 133 internal silos, 34, 76, 114 Ishikawa, Kaoru, 112 Ishitaka, Yaz, 142 I-4  VALUE CREATION Jobs, Steve, Journal of Creating Value, 13–14, 134, 218 Kahneman, Daniel, 115 Kalliatakis, Aki, AP–1 Keiningham, Tim, 99 Kelleher, Herb, 42 Keller, Scott, 107 Kordupleski, Ray, 13, 150 Kotler, Philip, 218 Lane, Kevin, 27 Larsen, Gitte, 159 last mile of pricing, 196–98 leaders behaviour, 24 future, 30 potential, 25, 28–30 traits of, 31 leadership creation, 30 development programs, 27–28 mindset, 29–30 programs, 30–31, 35 strategy, 34–35 training, 30 value creation, 30 less is more customer, 187–190 lifespan of CEOs, 18 lifespan of companies, 18 Mackey, John, 2, 100 managerialism, Maslow hierarchy, 120 master’s in value creation, 11 Mehta, Pavi, 24, 26 memory of the experience, 106, 115–18, 188, 212 mind-set change, 76, 118–20 education and awareness, 20 innovative, 29 leadership, 29 of value creation, 32 vs.training in Value Creation, 118–22 Minow, Nell, Montague, Ty, 198 Morriss, Anne, AP–11 Myatt, Mike, AP–18 Nadella, Satya, xiii Neale-May, Donovan, 135 necessary work for customer, 87 net promoter score (NPS), 223, AP–18 network customer’s, 85–87 customers as ambassadors (see customer) services, consumer’s perception, 180 social, 84 weaving, 128 Nippon Steel, 25 non-financial assets, 68, 70 nuisance value, 122–25 ombudsperson, AP–29 organogram,value creation, 1, 11 Orts, Eric, 135 people business, 42–43 Peppers, Don, 218 plant and machinery assets, 68 podular design, 128 Polman, Paul, 2, 4, 5, 7, Porter, Michael, 78, 97, 186 President Eisenhower, 221 price versus the benefits, 188 pricing customer buying, 196–98 experience, 201–203 point of view, 230, 236 Index I-5 value, 198 innovation, 162 misunderstanding, 197 myths, 196 policies, 178 power, 199–200 story to connect customer, 201 strategy, 199 product offering assets, 68 profit improvement through marketing strategies (PIMS), 47, 232–33 profits increasing strategy, 204 investments, 40 long-term strategy, 104 market share and, 96, 99, 238 organization development, 238 short term, 6–7, 18, 178 purpose of a business, 112, 160, 178 purpose of a company, 15, AP–32 strategy, 34 (see also customer strategy) value, 5, 7, 19, 22 wealth, 26, 33 Sharma, Kavita, 208 Sheth, Jagdish, 26, 38 Skafdrup, Erica, 159 Slippery Slopes, AP–30 Slym, Karl, 58 Slywotzky, Adrian, 105 social assets, 69 social media brand score, 69 customer experience, 76, 78 customer media and, 171 customers as ambassadors, 83–84 Facebook/Twitter, 85 public relations and, 39 stated vs implied weights, AP–30 Steinbrecher, Susan, 103 Stout, Lynn, 2–5 qualitative metrics, 163 redefining capitalism, 26 relevant work concept, 87 for customer, 87 rethinking capitalism, 97 return on customer, 86 revenue growth, 202 Rippon, Danny, 203 Rogers, Martha, 218 Securities and Exchange Commission of the US (SEC), 60 self-contemplation, 28 self-serving bias, 108 self-tuning companies, 235 seller’s tool, 205 senior leaders behavior, 106–109 service level agreements (SLA), 112 share of wallet, 215 shareholder capitalism, 3, 5, 7, 33 task audit, 87–89 Telcos, 180–82 Thompson, Bob, 13 total customer value management, 98–99, 126, 224 training failure, 28 functional, 237 of leaders, 28 vs mind-set in value creation, 118–22 uncharted value, 151–52 urgent work, 19–20, 30, 155 value added stories, 198 councils, 62–66 creating ideas, 33 creating value, 22 creators, 33–79 destroyer, 25, 62 I-6  VALUE CREATION differentiation, 150 extraction, 9–17 grabbers, 23–25 grabbing, 23–27 innovation, AP–1 maps, AP–32 migration of customers, 53–56 value added employee, 138 value creation and HR, 16 and operations, 16 behavior, 24 by employees, 134–36 conscious capitalism, 2, 26, 101–102 councils, 20, 23, 62, 66, 68 courses, 14 customer strategy, 34–38 defined, 64, 161 education, 208–213 faculty members role, 209–210 ideas, 33 ideas for, 156–62 impact in, 39 importance, 9–12 in Amazon, in Apple, 60–62 in education, 208–210 leaders, 15, 23–27 strategy, 15 teaching, 206–208 value creators, 13, 24, 33–79 value destroyers, 25 value destruction, 56–66, 122–25 large scale, 26 valued employees, 131 Varian, Hal, 60 voice of competitor, AP–32 Walker, Rob, 199 Welch, Jack, Wyatt, Watson, 160 Yunus, Muhammad, 104 Zappos, 131, 134 zero complaints, 16, 91–92, 122 About the Author Gautam Mahajan is an internationally acclaimed expert in ­strategy, general management (including Customer Value), and globalization He is President of Customer Value Foundation and Inter-Link Services Private Limited, an International Consulting Firm in operation since 1987, working with clients from America, Europe, Asia, Australia, and India Gautam is also the Founder Editor of the Journal of Creating Value, an international journal focused on Customer and Value Creation (see jcv.sagepub.com) Gautam Mahajan is the leading global thought leader in Total Customer Value Management He worked for a Fortune 50 c­ ompany in the USA for 17 years and ran one of the largest ­businesses He has hands-on experience in consulting, educating leaders, ­professionals, managers, and CEOs from numerous MNCs and local conglomerates like Tata, Birla, ITC, Alcoa, Reynolds, Sealed Air, Rexam, Viag, DuPont, Continental Can, and Godrej Groups He is the author of widely acclaimed books: Customer Value Investment: Formula for Sustained Business Success and Total Customer Value Management: Transforming Business Thinking He has also taught at IITs and abroad Gautam Mahajan was previously the President of the IndoAmerican Chamber of Commerce; Chairman, PlastIndia Committee; Vice President, All India Plastics Manufacturers Association; Trustee, Plastics Institute of America He was a member of the US–India think tank and Chairman of the US–India Economic Relations Forum Among his honors are Fellowships from Harvard Business School and Illinois Institute of Technology He also has 18 US patents, including the PET bottle and noise control kits He ­ was honored by the Illinois Institute of Technology with its Distinguished Alumni Award in 2001 A-2  VALUE CREATION He has been written about in the Wall Street Journal He also gave the first Distinguished Engineering Lecture at Illinois Institute of Technology followed by a Distinguished Management Lecture In September 2011, he spent time in the US talking about Indo-US relations and how to improve them Gautam Mahajan is a graduate of IIT Madras, where he was an Institute Merit Scholar, has a Master’s degree in Mechanics and has completed his PhD coursework from the Illinois Institute of Technology He has an MBA from Suffolk University Gautam Mahajan is a prominent and charismatic speaker and evangelist in Value Creation and travels the world on speaking engagements Total Customer Value Management (Total CVM) is a new ­management concept going far beyond CVM Total CVM aligns the entire ­company to the Customer It expounds the Value of employees and the building of their self-esteem, awareness, and engagement, and expands the concept of Customer Strategy, Customer Circles and Continuous Customer Improvement Programs, Value pricing, the roles of departments such as HRD and Finance, and ­measuring CVA and EVA Gautam Mahajan is happy to hear from you at mahajan@ CustomerValuefoundation.com ... Search of Excellence Value Creation: The Definitive Guide for Business Leaders will shift managerial focus to creating value for the entire business ecosystem and not just for the shareholders It... Mahajan’s recent book, Value Creation: The Definitive Guide for Business Leaders It is very timely given the ­current conversations about value creation around the world and the waste created by... shareholder value is an outcome, not a goal On a practical level, Value Creation: The Definitive Guide for Business Leaders lays out for CEOs and senior managers the change process for moving their