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Value denial is a business opportunity


Value denial is a business opportunity

“A 'value denial' is a business opportunity.

Every change and innovation creates new value denials”

Richard Rumelt

McKinsey & Company - Strategy’s strategist: an interview with Richard Rumelt

Richard Rumelt: Most corporate strategic plans have little to do with strategy. They are simply three-year or five-year rolling resource budgets and some sort of market share projection. Calling this strategic planning creates false expectations that the exercise will somehow produce a coherent strategy.

This plan coordinates the deployment of resources—but it’s not strategy. These resource budgets simply cannot deliver what senior managers want: a pathway to substantially higher performance.

There are only two ways to get that. One, you can invent your way to success. Unfortunately, you can’t count on that. The second path is to exploit some change in your environment—in technology, consumer tastes, laws, resource prices, or competitive behavior—and ride that change with quickness and skill. This second path is how most successful companies make it. Changes, however, don’t come along in nice annual packages, so the need for strategy work is episodic, not necessarily annual.

So my basic recommendation is to do two things: avoid the label “strategic plan”—call those budgets “long-term resource plans”—and start a separate, nonannual, opportunity-driven process for strategy work.

So strategy starts with identifying changes? Right!

Even though these changes have long-term consequences, companies need to take a position now. By “take a position” I mean invest in resources that will be made more valuable by the changes that are happening.

Strategic thinking helps us take positions in a world that is confusing and uncertain. You can’t get rid of ambiguity and uncertainty—they are the flip side of opportunity. If you want certainty and clarity, wait for others to take a position and see how they do. Then you’ll know what works, but it will be too late to profit from the knowledge.

So how does a company take a good position?

Well, one big factor is a predatory posture focused on going after changes.

Steve Jobs: “I am going to wait for the next big thing.” Jobs didn’t give me a doorknob-polishing answer. He didn’t say, “We’re cutting costs and we’re making alliances.” He was waiting until the right moment for that predatory leap, which for him was Pixar and then, in an even bigger way, the iPod. That very predatory approach of leaping through the window of opportunity and staying focused on those big wins—not on maintenance activities—is what distinguishes a real entrepreneurial strategy.

So he spotted—and then exploited—a change whose time had come.

What capabilities do companies need in order to take advantage of these ideas?

Richard Rumelt: There is no substitute for entrepreneurial insight, but almost all innovation flows from the unexpected combination of two or more things, so companies need access to and, in some cases, control over the right knowledge and skill pools.

So how do we know which changes are important and which resources to combine?

Most of the strategy concepts in use today are static. They explain the stability and sustainability of competitive advantages. Strategy concepts like core competencies, experience curves, market share, entry barriers, scale, corporate culture, and even the idea of “superior resources” are essentially static, telling us why a particular position is defensible—why it holds the high ground.

Strategy dynamics studies how those changes would shift each dimension of an industry. Would the industry become more concentrated or less? More integrated or less? Would there be more product differentiation or less? More segmentation or less? Given consumer desires and available technologies, how should the industry or business look in, say, ten years? Where are the economic forces trying to take you? Should your strategy ride those forces or fight them?

What’s another way to understand strategy dynamics?

I use another tool I call “value denials.” These are products or services that are both desired and feasible but are not being supplied to the market. The concept combines insights into demand and potential supply. A classic example is an airline ticket guaranteeing that your luggage will not be lost. It just isn’t supplied at any price. There must be a price at which airlines would hand-carry luggage to the baggage compartment and even a price at which they would strap it into the seat next to you! There are times when we would pay the premium, but those services are not offered. That’s a value denial.

A value denial is a business opportunity. Every change and innovation creates new value denials. People wanted to buy music à la carte and keep 10,000 songs on their computers. Well, they got that, but there was a value denial: the digital music wasn’t portable. So along come the MP3 player and the iPod. But those innovations uncovered a new value denial: people also want to plug their players into their stereos. Well, this was pretty easily fixed, but playing your MP3s on your stereo uncovers yet another value denial: MP3s are compressed and just don’t sound as good as CDs. Finally, even when I have immediate access to all music anywhere and anytime through the “jukebox in the sky,” there will still be a value denial—how will I know what to listen to? I will need a private tutor and disc jockey to help arrange my listening and maybe to shape my tastes.

So one useful way to think about change is to turn aside from the central innovation and ask yourself what value denials it will uncover. How will they be fixed? And what value denials will then be uncovered by that fix?



Kluwer opleiding: sales management van de toekomst

Opleiding sales management 4.0?

'Word sales manager van de toekomst'

Programma topics

  1. De sales manager als strategisch en innovatief leider

  2. De sales manager als inspirerend people manager en coach

  3. De sales manager als sales organisator en talent scout

  4. De sales manager als actie- en prestatiegericht aandrijver



Masterclass sales management: 'klantbeleving heeft vandaag de hoogste prioriteit'

Schrijf je in voor de nieuwe masterclass sales management 2019


Chris Delvaux over de Sales Manager 2.0

Door de waterval aan technologische mogelijkheden zijn verkoop en verkoopmanagement in volle evolutie. Met de toename van digitale contactmogelijkheden, neemt de klant vandaag steeds meer de leiding in het aankoopproces. Bovendien komt er een nieuwe generatie verkooptalent op de arbeidsmarkt, die net als de klant andere verwachtingen koestert… Wat betekent dat voor de rol van de sales manager? Welke competenties heeft een sales manager nodig om vandaag relevant en succesvol te zijn? Een gesprek met Chris Delvaux, ervaren consultant en trainer, en een getuigenis van Dominique Gossé, Commercial Director Distribution Channel DVV/Les App bij Belfius, over verkoopmanagement vandaag in de verzekeringswereld.



BAIDU’S MELODY - virtual medical assistant

Melody is a virtual medical assistant inside of the Baidu Doctor app in China. The chatbot helps patients articulate their symptoms before seeing a physician.

One common problem doctor’s have with patients is that they often aren’t clear on their own symptoms before booking appointments or seeking medical treatment. Melody the Baidu bot seeks to solve this problem by chatting with patients in an interactive way and helping them articulate their symptoms at the necessary level of detail for physicians.







Maakindustrie en servitisatie: een sterke combinatie

Interessant artikel over servitisatie, nieuwe verantwoordelijkheden voor medewerkers en het belang van een kwalitatieve uitrol in de organisatie.

In dit artikel wordt heel sterk de nadruk gelegd op het belang van een transformatie naar een organisatie waar ALLE medewerkers betrokken en verantwoordelijk zijn voor het 'servicen' van de klanten.



Innovative solutions and the search for Fit

Innovative solutions and the corresponding value propositions are only relevant if they fit at three levels

In the first place, an innovative solution and its corresponding value proposition have to address the identified challenge or problem for your company and the customer.

All great ideas are of little significance if they are not appropriate solutions for the identified problem(s). Therefore it is very important to identify first all real challenges or problems, to cluster and prioritize them (assigning weight) for example on the basis of the impact that they (can) have for the business. A facilitator can help you with the process of identification, clustering and prioritizing. It is important to be able to start from the underlying real problem or challenge, which often manifests itself not immediately and clearly. Every innovative idea must first be checked against the problem to determine whether it can be a suitable solution to this fundamental problem.

Secondly, each solution (product and/or service) must be appreciated and validated by the customer. 

It must be examined in the market and among customers if the solution is really valuable to the customer and whether there is a positive reaction of the customer. What are the chances that the solution really get a grip on the market and target audience?

Finally, there should be a search for the way the innovative solution (product / service) fits into the business model. 

In other words, it should be considered whether the innovative solution actually can be  set up, can be organized and embedded  in to a profitable and scalable business model.

About the author:

Chris Delvaux has over 15 experience as a senior consultant. He is specialized in go-to-market optimization, business model innovation and service design. He facilitates and coaches teams in commercial transformation projects from the analysis to the result. He works strategically AND pragmatically. He has worked for clients such as Baxter, Nashuatec (Ricoh), DVV Insurance, Associated Weavers, Stihl Benelux

Go-to-market challenges and guidelines for optimization

Go-to-market challenges

A maximum development of commercial potential in a customer-driven and omni-channel economy.

Commercial potential remains often untapped. A lack of effectiveness in sales and marketing approach is one of the main causes of falling sales figures and declining growth power.

The first major challenge is the discovery and development of intrinsically present, commercial potential in sales and marketing approaches. The second major challenge is the elimination of significant differences in methods and results between top executives and top managers, and the rest of the organization. The need for a better alignment of activities and responsibilities between the marketing, sales and other departments, is the third major challenge.

Go-to-Market - solutions

What are the best solutions for the Go-to-Market challenges?

Improving the Go-to-Market approach needs to be done in three phases. A thorough analysis of the entire commercial ecosystem is the basis for the next two steps: "without a diagnosis, no prescription”. In a second phase will be examined how the commercial strategy can be enhanced and additional commercial value can be created. In phase three, the focus is on how the organization will be prepared for the future.


About the author

Chris Delvaux - Go-to-Market optimization

Chris Delvaux has over 15 experience as a senior consultant. He is specialized in go-to-market optimization, business model innovation and service design. He facilitates and coaches teams in commercial transformation projects from the analysis to the result. He works strategically AND pragmatically. He has worked for clients such as Baxter, Nashuatec (Ricoh), DVV Insurance, Associated Weavers, Stihl Benelux

Revolutionise your business

Revolutionise your business. Get more value out of your business by using the Business Model Navigator to innovate your business. It builds on the central idea that successful business models can be constructed through creative imitation and recombination. (Oliver Gassmann, BMI-Lab)



Business model innovation

Commercial innovation by developing a new business model

Commercial innovation by developing a new business model, is one of the possibilities to create added customer value.

What is the best way to do it?

You can find some interesting tips about developing a new business model in the video from the University of St Gallen, Switzerland. (By Prof. Dr. Oliver Gassman). The video is also about typical myths in innovation.


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