Value Innovation Works

TL;DR: Lee and Goodrich as mentioned in this paper define value innovation as "delivering exceptional value to the most important customer in the value chain, all the time, every time." The focus of the book is a 10-step "value innovation process," which provides a practical how-to for practitioners.

Abstract: Value Innovation Works Richard K. Lee & Nina E. Goodrich (CreateSpace Independent Publishing; May 2012) By defining value innovation as "delivering exceptional value to the Most Important Customer in the Value Chain, all the time, every time," Richard K. Lee and Nina E. Goodrich set both the tone of the book and the expectation of the reader right from the start. The focus of the book is a 10-step "value innovation process," which provides a practical how-to for practitioners. The steps include: 1. Define project mission and objectives. 2. Define value chain and identify the most important customer. 3. Develop "as is" and "best in class" value curves. 4. Carry out contextual interviews. 5. Develop "to be" value curve. 6. Review "to be" value curve with the most important customer. 7. Modify "to be" value curve. 8. Define value proposition. 9. Determine how to deliver the "what." 10. Confirm with most important customer that the "how" is compelling. The authors suggest that completing the process and implementing value innovation using the enabling tools provided--which should take 10-12 weeks, they say--will prepare companies to achieve sustainable and profitable growth. The book draws heavily on the authors' experience in the innovation field as well as their hands-on workshops and lectures. Lee and Goodrich seem to be very knowledgeable, and the process they describe is relatively straightforward. They identify the value chain as consisting of each individual or organization involved in the transactions--as a seller, buyer, or user--that lead from the origination of the product through to the end user. For real estate firm Re/Max, for instance, the value chain consists of the franchisee (the individual or company operating the individual office), the sales affiliate (the agent who lists or shows a property), and the seller and buyer of a property. Once the value chain is established, the most important customer (MIC) in that chain must be identified. The MIC is the single element in the value chain who is most directly responsible for correcting daily problems, stands to lose most financially in the event of a problem, and most clearly recognizes the value of the company's offering. For Re/Max, the MIC is the sales affiliate, who must address issues and problems with listings as they arise, suffers financially if a deal fails to close, and gleans value from the parent company's services and support structures. Once the value chain and MIC are defined, the remaining steps in the process generate value curves by listing the elements of performance with regard to the value being delivered to the MIC. The curves are iterated and refined by meeting with the MIC and identifying its unmet needs. …