Manage-Wise

Prove your value to the company

Even though most senior executives and managers feel they are more valued today than a few years ago by the people they work for, that value still can be increased. Those who are highly valued are most likely to be the first to be considered for career advancement or some of the company’s best new assignments. And during tough times, those who are highly valued will most likely not be the first targets in a corporate downsizing. In addition, increasing and improving value to an organization can increase self-satisfaction, thereby decreasing stress.

The good news is that almost a third of executives and managers feel that they are significantly more valued by their superiors now than a few years ago. “My organization has been excellent at recognizing the value I provide to it, probably more than I do myself,” says one manager. “Unfortunately, that isn’t true across the board. We seem to have a very whimsical method for deciding who and what brings value to the organization.” The latter point is true in many organizations; the most-valued person may be the one who recently made the biggest sale.

Executives and managers have clear ideas on what would increase their value in the eyes of their bosses. Topping the list, perhaps no surprise, is to increase revenue, which gets back to one of the fundamental concepts of tough management: focus on results. There is no more what I call “fluff” left in the work world. The people and departments that deliver results receive the investments and growth opportunities, and that’s what tough management is all about.

Aligning with company’s values

To increase your value inside your organization, tough management requires that you align with the real value of what your business provides, which means identifying the true value of what your business does. This requirement does not refer to a technical definition of value, which is the monetary worth or fair market price of something. Rather, what value does your business provide to its customers and stakeholders?

While most companies tout customer service, their internal measurement systems often are based on products sold, not necessarily on customers satisfied. Granted, some companies reward managers for customer satisfaction levels or use balanced score-cards, but generally “units sold” or “revenue produced” dominates overall compensation or, at the very least, internal recognition of who is king (or queen) of the hill.

Companies historically were organized around the design of products, often to the point that entire groups or divisions would focus on creating and marketing single categories of products. Companies then would organize to sell these products to a designated market of buyers, typically with the biggest buyers receiving the most attention. Some of the largest companies with many products, such as IBM, organized sales forces around industries and lined up the various product groups necessary to support that industry.

The world is different today, with all product and pricing information available to all through the networking of everything, with accessibility primarily through the Internet. This networking of everything created a new dilemma for the makers of products.

With instant access to all information all the time, buyers instantly measure supply against demand, price against price, and feature against feature. (Anyone who has ever used eBay can see how markets and pricing work in a real-time world).

We are going through a value shift, where companies can find that their core assets are less profitable or less well positioned for the future than what surrounds and supplements the actual product. This shift can affect just about any product, from hard to soft goods. An obvious example is real-time stock quotes. They used to be available only to brokers charged a large fee by the New York Stock Exchange. For consumers, the standard monthly fee used to be $29.95 for information that is now free. Likewise, real estate listings used to be available only through a broker; now they are available on the Net. Service contracts at Circuit City account for all of its operating profit, and almost half at BestBuy. In these cases, the core assets—electronics—are less valuable to the bottom line of the organization than are the service contracts, which surround those products.

Identifying shifts

Tough management requires identifying these shifts within your organization and aligning with where the value is and where it is going. It is common knowledge that making and selling a product is no longer enough, even at a competitive price. The value is in tying together everything a company has to offer and essentially wrapping that offering around the customer, as many companies have come to realize.

What some companies still fail to see is that from their customer’s viewpoint, their products, services, and brands are viewed as one entity. For example, customers want a bank to know who they are. But instead, one bank employee knows they have a checking account, another knows they have a savings account, and a third person knows they have a mortgage. The bank might be organized around its products, which is how many companies grew up.

Many businesses started with a core product and evolved from there. Typically, a product was created. When it succeeded or failed, another product was created. The company ended up with many potentially very good products. However, it might have no organization around the buyers of all those products. As departments and companies determine what true value they provide as viewed through the eyes of their customers, this presents an opportunity for you to align with those same values.

Start by asking these questions:

• What services does the customer appreciate?
• How do the best customers view the company?
• What is lacking?
• What is internal business development working on?
• What did we just launch?

What brings in the most revenue?

The answers to these questions force an organization to focus more on customer needs than on internal issues. The key to proving value to your company is to align yourself with the values of the company itself. For example, if there is a big cost-cutting push on, lead the charge, and make sure the top brass knows it. This may sound heartless, but the reality is if there is across-the-board cutting, you will be affected anyway. If it’s the last quarter and all eyes are on making the revenue numbers, make sure you are prominent in that charge. It is essential to have the value you provide aligned with the values the company provides.

Top ten ways to be more valued:

• Increase revenue
• Do more with less
• Increase profit
• Communicate more
• Cut costs
• Provide creative ideas
• Assume more responsibility
• Collaborate more
• Share more information
• Spend more time with customers

Excerpt from ‘Tough Management’ by Chuck Martin. Reproduced with permission © 2005, Tata McGraw-Hill Publishing Company Limited. Price: Rs 295. Vishwanath_Ghanekar@mcgraw-hill.com