The Value of Adaptive Solution Design
The products and services a company offers are intended to create value for their clients by solving their imminent problems, helping them reach their goals, or fulfilling other specific needs. In order to leverage a holistic perspective on the corresponding building block “Solutions” , a transformation strategy must consider both, the solutions’ value propositions and the corresponding impact of such change on the internal value chain, in an integrated perspective.
In the context of the Transformation Board, Solutions refer to the products and services a business offers to its clients. Whether on a physical or immaterial level, such offerings are supposed to create value for the company’s target consumer groups by relieving them of imminent problems, supporting them in achieving their goals, or delivering other benefits in line with their needs and preferences. The strength and resilience of the solutions’ value propositions is a key driver for a company’s competitive position and its subsequent market success.
Successful Business Transformations Deliver Solutions With a Strong Value Proposition
The reasons why a business’s core value propositions may be at risk are manifold. Technological progress in a company’s industry, market, and economic environment may have provided for more innovative products and services. Social trends may have fundamentally altered the clients’ needs and preferences. Or, perhaps newly arising competitors offer game-changing solutions that threaten to disrupt the existing market altogether.
Businesses facing such a significant deterioration of their core value propositions will eventually suffer, unless they manage to successfully transform their business beforehand.
Within such a transformation journey, developing new, attractive, and sustainable value propositions, and designing corresponding solutions, is key to its success. Therefore, entrepreneurs, executives, and business managers need to consider three levels of the products’ and services’ value propositions:
Transformation Leaders Need to Consider the Value Proposition Design Comprehensively
Client perspective – Identifying relevant value drivers is not an easy task. Purchase decisions are not often made based on rational comparisons of product or service features alone. Even worse, in a business to consumer (B2C) context, clients often cannot articulate the factor that drove the decision. Instead, buying decisions are usually either spontaneous or the result of a complex evaluation process that includes hidden or unconscious individual preferences. However, it is worth remembering this point in the context of a transformation scenario, as this may mean that you’re entering new grounds where you haven’t yet developed the deep customer insight you used to have.
Competitive perspective – Once the relevant value drivers are identified, and a promising value proposition is planned out, it is necessary to evaluate whether its chances of success are sustainable. This requires a detailed assessment of current and expected trends and developments in the economic and social environments, as well as within the competitive setting. Think of Michael Porter’s Five Forces. Transforming a business is a change in direction. As much as it is worth knowing from where the wind is blowing, it is necessary to understand the direction your competitors are moving to avoid falling behind or even crashing.
Business perspective – To be sustainable, the value proposition you develop must be feasible for the company, not only in the short term, but in the long run as well. This applies financially, technically, organizationally, and culturally. To assess this, company management must develop a comprehensive view on the corresponding business model.
A Flexible Solution Design Provides Leeway for Future Adoption and Change
The Areas of Action in a transformation should be balanced against each other. Developing a high-flying solution requires business managers to consider the competence and abilities of the workforce, as well as the use of suitable technology, just as much as effective and efficient organizational structures and processes.
Finally, in times when a business ecosystem is facing rapidly occurring changes, it is recommended to define business models and corresponding solutions in a way that integrates flexibility into the solution design. Take Tesla as an example. By building their cars around a flexible software backbone and connectivity, they are able to provide and sell valuable upgrades to their client base at any time. Traditional car manufacturers that have focused on integrating distinct digital technology packages are not able to do so; new, valuable features can currently only be sold to new or repeat customers in the context of another car purchase, which limits the company’s opportunity to quickly create and deliver value.
The Transformation Board Facilitates a Holistic Perspective
The initiators, facilitators, and leaders of corporate transformation must think and act holistically when defining, designing, and implementing a specific transformation approach.
The Trexcelerator Transformation Board provides entrepreneurs and senior executives, as well as business and project managers, with a comprehensive structure to develop, elaborate, assess, and improve their transformation strategies. When using it to evaluate the Area of Action Solutions, consider asking the following questions:
- What does the future solution portfolio look like, such that it promises to be a long-term value driver?
- Are the value propositions of new solutions strong and sustainable?
- Are there obvious trends or developments in the company’s environments that should either be leveraged (e.g., options in the economic environment) or mitigated (e.g., threats within the competitive setting)?
- Which dependencies or prerequisites should be considered in specifying the required changes in comparison to the current solutions and value propositions?
To learn more about the other building blocks of the Transformation Board, check out the blog on our website, or participate in one of our training seminars.