A Lean 3P Process for Designing your Value Proposition

Purposes, Processes and People are my Lean 3Ps when I am considering, designing or creating a value proposition. First of all, the Lean 3P Process can actually be viewed as a Lean Program Management system and is a great way to institute change within a program.

Purpose:

When most of us define a value proposition, we correctly view it from the standpoint of what customer’s pains we are relieving and/or what gains we are delivering to them. Alex Osterwalder does his usual excellent job of defining that approach through The Value Proposition Canvas. It is an extension of his Business Model Canvas. More information can be found on his website http://businessmodelgeneration.com. A video of Alex describing it is contained in a recent blog post, Mapping Customer Pains to your Value Proposition.

As well as I like the tool, I believe it falls short in creating a compelling value proposition. Sure, it delivers on the strategic side, but we have to deliver tactically and socially to create value. It is a 3-legged process of Purpose, Practices and People. It defines the purpose well enough but what do we do with it? How do we implement it? How does the customer want it implemented? How does the customer want it delivered? This is where I found using the Lean 3P Process allowed me to finish the job. It made me create more than a strategic side (purpose) to the equation.

People:

Viewing the people side using the Competing Values Framework that I discussed in the blog post, The Lean Marketing version of Lean 3P, was a way of understanding what drives both our customers and our organization. The values that this framework addresses, Collaboration, Creation, Compete and Control, compete for not only our internal resources but are competing in our customer’s organization. We have a much better chance of executing our value proposition if we understand how we deliver our value proposition and how it is being received. It is the social aspect of value.

A customer in the pre-purchase stage may view our proposition from any of the four competing values; Collaborative, Creative, Competitive or Controlling. That may even change during the purchase and the after-purchase stage. Our position will not necessarily match or mimic the customer’s position. That may not be the strongest position to deliver the value they desire. A customer may want a controlling value proposition from you. There are a set of best practices to work with competing values, which are defined in this PDF created by the Competing Values Company. How you communicate gains or relieve pain may be more important than delivering the best solution.

Even though I mention people, it is really about organizations and even markets when you are considering creating a value proposition. I believe you would see distinct differences in your success rates when they are grouped in this way.

Processes:

I originally started to think that processes should be called practices. However, after some thought, I have changed the wording to processes. I think it is a better fit. A Lean organization is defined by the culture of PDCA, PDCA being a somewhat generic term for Kaizen and continuous improvement. In my thoughts, within the organization, PDCA is broken down into three areas: SDCA, PDCA, EDCA. When considering the Value Stream or fulfilling our promise as stated in the value proposition, we define these terms in this manner:

• SDCA: A tactical team works with a customer needing standard products/services.
• PDCA: A problem solving team works with a customer needing slight alterations or bundle products/services.
• EDCA: Creative team works with a customer who needs new or major changes to products/services

This is an important part of the value proposition. It is how work will be done. This is our evidence that we can deliver on our promise, our value proposition. If you have watched the video you might be wondering. there our four quadrants in the framework and there are only three processes described. Well in the framework they match up like this:

• Create = EDCA
• Compete = SDCA
• Control = PDCA
• Collaborate = CAPD

I often use the CAPD cycle when starting a customer conversation. I describe the process in the blog post, Looking and Listening first is not all that Bad of an Idea. I did not use it as one of the processes because seldom will you see it as part of an actual long-term value proposition. Or we may use it at the beginning and convert to another cycle of PDCA for example. However, as collaboration continues to gain steam within our organization, this may all change and CAPD may join the other three.

PDF Version of the CAPD Tree.

Summary:

This approach is not meant to be cast in stone. Osterwalder’s Value Proposition Canvas could be replaced by the 5Cs of Driving Market Share Program. In fact in some instances, when considering an established brand, it should be. However, my attempt with this exercise is to demonstrate that a strategic value proposition is very limited if it cannot be effectively deployed. Summarizing, the steps to creating an effective value proposition are:

1. Strategic alignment occurs with the Value Proposition Canvas.
2. Tension is created from the Competing Values Framework.
3. The Processes manage the tension. If not the strategy will oscillate and be ineffective.

Using this three-legged approach, my take-off on the Lean 3P Process, creates a superior value proposition and one more likely to succeed in the marketplace.

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