June 2013

Wiersemas Value Disciplines*

*Summary of key concepts from Discipline of Market Leaders, Treacy, M. and Wiersema, F., authors.

What Customers Say About Value

Cost
Best Total Cost Great prices and quality. Their products last and last and last.

Benefit
Best Product Premium priced, but worth it. Consumers ask for it by name. Best Total Solution

Products

A no-hassle firm.

Services
Consistency is their middle name.

They are experts in my business. Their services are exactly what I need.

Rules of Market Leaders

Companies have created a set of expectations in customers minds that competitors now must strive to meet.
Provide the best offering in the marketplace by excelling in a specific dimension of value Maintain threshold standards on other dimensions of value Dominate your market by improving value year after year Build a well-tuned operating model dedicated to delivering unmatched value

Rule #1

Rule #2

Rule #3

Rule #4

Threshold Versus Leadership

Best product

Product Leadership

Product differentiation

Operational competence

Customer responsive

Operational Excellence
Best total cost

Customer Intimacy
Best total solution

The Three Value Disciplines

Operational Excellence Product Leadership
Best product

Customer Intimacy
Best total solution

Value Proposition

Best total cost

Golden Rule

Variety kills efficiency

Cannibalize your success with breakthroughs Invention Commercialization Market exploitation

Solve the clients broader problem

Core Processes

End-to-end product delivery Customer service cycle Process redesign Continuous improvement Shift to new asset base

Client acquisition & development Solution development Problem expertise Service customization Total change in solution paradigm

Improvement Levers Improvement Challenges

Product technology R&D cycle time

Jump to new technology

The Discipline of Operational Excellence

Culture Disciplined teamwork Process focused Conformance, one size fits all mindset

Organization Centralized functions High skills at the core of the organizations

Core Processes Product delivery and basic service cycle Built on standards, no frills fixed assets

Management Systems Command and control Compensation fixed to cost and quality Transaction profitability tracking

Information Technology Integrated, low-cost transaction systems Mobile and remote technologies
6

The Discipline of Product Leadership

Culture Concept, future driven Experimentation, out of the box mindset Attack, go for it, win

Organization Ad-hoc, organic, and cellular High skills abound in loose-knit structures

Core Processes Invention, commercialization Market exploitation Disjoint work procedures Information Technology Person-to-person communication systems Technologies enabling cooperation and KM

Management Systems Decisive, risk oriented Reward individuals innovation capacity Product life cycle profitability

The Discipline of Customer Intimacy

Culture Client and field driven Variation: Have it your way mindset

Organization Entrepreneurial client teams High skills in the field

Core Processes Client acquisition and development Solution development Flexible and responsive work procedures Information Technology Customer databases linking internal/external information Knowledge bases built around expertise

Management Systems Revenue and share of wallet driven Rewards based on client feedback Value of client analysis