1. MASTERING VALUE INNOVATION
SATISFYING MARKET NEEDS
MAXIMIZING PROFIT
Terry Say
Value Innovations, Inc.

2. MASTERING VALUE INNOVATION
WHY VALUE INNOVATION?
Value Innovators deliver exceptional value to the most important customer in the value chain. This:
ESTABLISHES THE MARKET
MAXIMIZES ACHIEVABLE PROFIT

3. MASTERING VALUE INNOVATION
EXCEPTIONAL VALUE CAN COME IN MANY FORMS
Business Model
Delivery
Packaging
Service
Process
Product
Technology, etc.
Generally have the longest cycle times

4. MASTERING VALUE INNOVATION
CONVENTIONAL INNOVATION VALUE INNOVATION
Red Ocean Strategy
Blue Ocean Strategy
Compete in existing market spaces
Beat the competition
Exploit existing demand
Compromise between value & cost
Align the whole system of a firm’s activities with its strategic choice of differentiation OR low cost
Set price based on cost to company
Create uncontested market spaces
Make the competition irrelevant
Create and capture new demand
No compromise between value & cost
Align the whole system of a firm’s activities in pursuit of differentiation AND low cost
Set price based on the value to the customer

5. THE HEART OF THE PROCESS

6. MASTERING VALUE INNOVATION
WHAT IS A VALUE CHAIN?
It identifies each company or entity that is involved in either a buying, selling, or using transaction between the original provider or manufacturer and the end user.
WHY IS UNDERSTANDING THE VALUE CHAIN IMPORTANT?
Because we need to understand who the MOST IMPORTANT CUSTOMER is in the Value Chain.
This is the person who can understand and appreciate the value your product brings to them.
Examples – Applicare, Yellow Tail Wine

7. THE HEART OF THE PROCESS

8. MASTERING VALUE INNOVATION
With your Most Important Customers (MIC’s)
Engages your MIC’s in the process
Easy for the team to communicate project goals
Clear to Management what’s at stake
Sorts out the wheat from the chaff
Takes the Fuzziness out of the Front End
WHAT IS A VALUE CURVE?

9. MASTERING VALUE INNOVATION
WHAT IS A VALUE CURVE?
Internally:
Enable the strategic planning process
Stimulate game-changing ideas
Identify how to bring greater value to the MIC for existing or new products and services
Help technologists see a much bigger picture
Prioritize your project portfolio

10. MASTERING VALUE INNOVATION
HOW IS A VALUE CURVE GENERATED?
On the left side of the curve (light blue) are rank ordered Elements of Performance .
WHAT’S AN ELEMENT OF PERFORMANCE?
The Elements define the service or product.
An Element is:
A succinct statement
Not an objective
Not a feature or benefit
Element 1
Element 2
Element 3
Element 4

11. MASTERING VALUE INNOVATION
HOW IS A VALUE CURVE GENERATED?
On the right hand side (yellow)
The values to the MIC for each element
Metrics for each Element define absolute values
Curves for your company “now” and competitor(s)
Element 1
Element 2
Element 3
Element 4

12. Case Study example of Step 3 “As is” and “Best in class”
Generated using the Slalom® Template
Value Innovations, Inc., facsimile of VC developed at Samsung
© Value Innovations, Inc., All rights reserved.

13. THE HEART OF THE PROCESS

14. MASTERING VALUE INNOVATION
CONTEXTUAL INTERVIEWING
Uncover the MIC’s unmet needs
Use open ended questions
Start at the highest level
What issues keep you awake at night?
What critical issues will you face over the next 3 to 5 years in your job?
What changes do you expect to see in the next 3 to 5 years?
Don’t ask “What do you need?”
Interviewees don’t know what they don’t know
Interviewees don’t know what you could do
Determine repetitive sentences or phrases

15. THE HEART OF THE PROCESS

16. Case study example of Step 5 the “To Be” Value Curve
© Value Innovations, Inc., All rights reserved. 1

17. THE HEART OF THE PROCESS
The next two steps are a iterative process designed to ensure the Value Curve consistency with the MIC’s perspective. Blah blah blah….

18. THE HEART OF THE PROCESS
The next two steps are a iterative process designed to ensure the Value Curve consistency with the MIC’s perspective. Blah blah blah….

19. THE HEART OF THE PROCESS
The next two steps are a iterative process designed to ensure the Value Curve consistency with the MIC’s perspective. Blah blah blah….

20. MASTERING VALUE INNOVATION
VALUE PROPOSITION
1 or 2 paragraph statement describing the value your product, service or offering brings, or will bring, to the MIC in the value chain
Must be compelling to the MIC.

21. THE HEART OF THE PROCESS
In summary…

22. MASTERING VALUE INNOVATION
FOR MORE INFORMATION:
(Many Examples)

23. MASTERING VALUE INNOVATION
BLUE OCEAN STRATEGY by W. Chan Kim & Renée Mauborgne
Harvard Business Press, 2005
Thesis: Many companies are in competition, blood is spilt, and the
oceans they are swimming in run red.
Solution: Make the competition irrelevant
CREATE A BLUE OCEAN
1 million copies sold in the 1st year

24. MASTERING VALUE INNOVATION
Those who read it, love it
This is great!
But…..
How do I do this?
BY USING VALUE INNOVATION METHODOLOGY AND TOOLS