As research shows, the best performing organizations are the ones that are best aligned. They successfully manage to direct all efforts towards creating superior customer value. They know what their customers want and they are entirely focused on delivering just that. But how to achieve this in today’s highly competitive markets? And how to make sure to stay aligned in this rapidly changing world?
In a couple of earlier posts I gave some directions for how to do this. There I talked about ‘The One Thing that all Your Strategic Initiatives Should Focus on‘ about ‘How to Create a Well Aligned Strategy in Three Steps‘ and about ‘Are Your Offerings Aligned?‘
Those posts gave you a general idea about how to create better offering alignment in your organization. At this place I’d like to go into this a bit deeper and offer you five steps to realize this.
- See your organization as a fluid portfolio of offerings. The first step is to take the right perspective on your organization. Mostly, we’re used to look at an organization or business unit as a whole and develop an overall strategy for it. If we take having a customer focus seriously, though, we need a more granular view and see the organization as a portfolio of offerings (or product-market combinations if you prefer): a basket of products or services for specific groups of customers. And given that old offerings will go, new ones will come, and existing ones will change, this is a fluid rather than fixed portfolio.
- Focus on an offering that needs attention. Given that we can’t really multitask and given that a high-level approach doesn’t give you the grounded insights that you need to take action, the next step is to pick one offering that requires attention. This can be, for example, an existing offering that doesn’t work out as well as you hope, or a new one that you are developing, or one that you bring to a new market, etc. (see also my previous post on ‘Are Your Offerings Aligned?‘ for five questions that you can ask yourself to pick the offering that you want to focus on).
- Understand what you are offering. The next step is to develop a detailed understanding of the value you are trying to create. I am not referring yet to what your offering should be or what you think your customers would want. First you need to get a (shared) understanding of what you are actually selling and how you communicate about it. So, start with looking inward by understanding your own offering. I will get into how you do this in a next post in more detail, but the core idea is that you identify the main factors or ‘value dimensions’ that you are selling on (e.g. price, durability, customization, etc).
- Understand what customers need. Now that you know what you are selling, you should move on to creating an understanding of what customers value. Maybe your sales team knows this or maybe you have to work with actual customers to find this out (especially if you are venturing into an unfamiliar market the latter may be strongly advised); as long as you get on the table what they want and need and what they find important. For this you use the same approach as in the previous step: identify those factors or value dimensions that they find important.
- Compare and Calibrate. With the previous two steps you have the key information to find out whether your offering is aligned with what customers value and on which factors there is alignment and on which factors not. Based on these insights you can then make concrete decisions about which changes to make. Maybe you need to improve or reposition your offering, or maybe you better go for a different market, or abandon the whole offering if the mismatch is too substantial.
There are several subsequent steps to make – such as contrasting your offering with the competition, aligning the offering with other offerings of your organization, and making sure your resources, partners, processes, etc. are aligned with your offering too. These follow-up steps are substantial and important to make sure your entire organization is aligned with your offerings. However, the five steps above should give you a jumpstart in creating a better aligned – and thereby more effective – organization.