The Value-Added Curve and Today's Wake-Up Call

Last week I was blogging about the difference in results organizationally when you have a common, shared sense of purpose and when you don't.  Simply put, the difference can be stark.  Most businesses and government departments don't make the time to focus on purpose - they're focusing on results, and in so doing, they sabotage the potential results they could be making.  I also posted about how, perhaps, our addiction to crisis in the industrialized world may, in fact, be a hunger for the common shared purpose we're missing in our workplaces.

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Michael Basch, one of the founding partners of FedEx, and the designer of most of the systems that drove its legendary service levels in its early days has a simple and powerful framework that starts to explain what's happening here:  The Value Added Curve.  Today's economic climate may be a wake-up call that it's time to move up this curve.

An organization can meet the needs of its employees and customers at many levels.  Most organizations meet the basic physical needs of these constituents - providing employees with regular pay for their work, and customers with the basic product or service that they purchase.  The value they receive back for doing this is minimal.

The second level of the value-added curve is information.  For employees, this means letting the organizations understand how they fit into the organization and what the organizational goals are.  By understanding how they fit in the puzzle, they can make more effective decisions for the organization, and there is greater value both ways.  For customers, this means providing information on the product or service that allows them to have more assurance of their purchase.  This could be a listing of ingredients, or something like the parcel tracking system that couriers like FedEx offer.

Most organizations do these two things to some extent and they stop there, and that is why they have limite results.  As shown in the Value-Added Curve, below, there is a 'glass ceiling' above these points that most organizations never progress beyond.

By providing the physical and informational product, the value you provide to your stakeholders - and in return the value they provide to you - is limited.  To truly take off up the exponential value-added curve, you need to progress to meet the emotional and spiritual needs of your employees and customers.

What does this mean?  Simply put, when we make decisions and commitments, we make them emotionally, and then we find the logic/rationale to justify that emotional decision, including our commitment to an organization or product/service.  You only reach that emotional engagement when you go beyond the glass ceiling on the curve.  it is at this point that you truly understand the difference between 'managing things and leading people'.

To meet the emotional needs of your employees you need to engage them in your vision and goals, not just tell them about them.  They need to understand how they can benefit from the organization realizing its goals, and they need to know that they are supported and cared for.

When it comes to meeting the emotional needs of your customers, they need to know that, when there are problems, that you will do whatever it takes to look after them.  When ka-ka happens, do they have to resort to dealing with an online complaint system or dialing through an automated mine field, or will there be a person who will have the courage to face them and do whatever it takes to solve their problem?

Another of Mike's frameworks that I love is 'Proact Creatively, React Outrageously'.  That's the essence of this place on the value added curve.

So what does it mean to take it to the top and meet the spiritual needs of your customers and employees?  No, this doesn't necessarily mean religious.  It means spiritual - being part of something greater than them.  This is where purpose comes in.  What is the purpose of your business? 

In an earlier post I spoke of how the Canadian Armed Forces became operational within 3 weeks (an 'impossible' task) when Iraq invaded Kuwait in the 1990s.  They broke every rule in the book and every union-management issue disappeared off the table because they were al part of a higher cause.  That's the power of purpose - the spritual element of the Value-Added Curve.   What your people will put in at this level is off the charts - the challenge is: how can you live here without being in crisis as most organizations do?

For customers, their loyalty also goes off the charts if you have a clear purpose that they can buy in to.  What is the greater good that you are doing that they can also join in with by buying your products or services?

I'll go out on a limb here and say that the organizations that are having the greatest difficulty in today's economic times are those that never crossed the glass ceiling to fully involve and engage their employees and customers, and perhaps this crisis is a wake-up call to tell us that it's time to step up and go beyond the glass ceiling for all of us.

That's my 2 cents.  What do you think?