Creating joint solutions: What the best do differently

By Phil Styrlund and James Robertson, The Summit Group

In the first post in this series, we examined how market disruption, changing buyer behaviors and other factors are rendering traditional sources of growth – like internal research and development of products and services, pricing, and branding – inadequate. To grow profitably in today’s business market, companies have no choice but to engage with their customers and partners to co-create new sources of value by deepening insights, aligning goals, developing joint solutions, leveraging mutual capabilities and executing together.

That was the what. Now let’s move on to the how. 

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Leading companies who excel at collaboratively creating value with their customers are not trying to do a thousand things well. With clear purpose, and through deliberate practice, they focus on developing the critical capabilities that enable an iterative, flexible process, agile execution and continuous learning.

There’s no “silver bullet” or prescriptive process that gets you from a to z. Rather the iterative, agile application of a structured, yet flexible approach that provides freedom in a framework has proven to enable effective execution and to accelerate results.

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What the best do differently to co-create value and develop joint solutions with strategic customers

The operating framework we propose for creating joint solutions has three phases:

  1. Accelerate insight and business alignment
  2. Create joint solutions
  3. Communicate value and drive execution.

We’ll talk here about phase one, leaving phases two and three for the next posts in our series.

In the complex business-to-business environment of strategic account management, where no two co-creation opportunities are likely to follow the same path, a prescriptive, robotic, linear process will not accommodate the variability, adaptation, and creativity required for success. Companies adapt and integrate this framework in to their organization’s culture and way-of-working, to differentiate how they engage and drive growth with their customers.

In this phase the company and customer:

  • Establish mutual intent and guiding principles to collaborate, beyond the transactional relationship, in the discovery and evaluation of opportunities to create new sources of value
  • Accelerate and deepen insights in to their value chain drivers – thinking outside-in, and looking beyond the product/service to identify major CareAbouts™ (Issues, opportunities, unmet needs, and pain points impacting their business ecosystem), and avoid “product glaucoma”
  • Listen louder to the voice of the customer’s customer
  • Engage in dialogue with relevant stakeholders beyond traditional contact points to extend and validate insights
  • Mutually prioritize what matters most – aligning on opportunities and initiatives that are likely to have the greatest impact on end-user value, and on each organization’s business, considering feasibility and competitive differentiation.

At the outcome of this phase, both organizations have identified big CareAbouts and prioritized joint opportunities to co-create mutual value.

During this phase, leading practitioners reorder their thinking: starting with their customer’s customer to understand why they select one product, service, or solution over another – and to determine what they seek and care about most.

Principle #1: Third Box Thinking

Third Box Thinking is a principle that operationalizes value co-creation by reordering and aligning how we think – enabling the shift from traditional selling, which starts with product/service features and benefits, to focus on value chain drivers before considering what we can bring. In our experience, the inside-out, product-centric mindset is one of the hardest things to change, especially when you have historically enjoyed product success. Third Box Thinking begins with the customer’s customer, re-structuring thinking from right to left: starting with deep insight and understanding of what the end-user customers care about (seek?), what customers do to deliver value to their customers, and what the company can provide (bring?). It’s about reverse engineering relevance and listening beyond the product.

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Leading companies gain deep, unique, strategic, and tactical insight in to industry value drivers, the customer’s business issues and initiatives, and critical success factors. While quantitative and qualitative research and customer satisfaction surveys provide plentiful data, it is usually filtered through third parties, difficult to interpret, harder to act on, and unlikely to provide the depth of insight required to guide co-development of differentiated, customized solutions. Value co-creation places a premium on understanding the “ultimate truth”— the unfiltered voice of the customer, and of key players along the value chain.

Principle #1: CareAbouts

Gaining deeper insight in to value drivers requires understanding the “why behind the what”. By repeatedly asking “why”, we uncover the root cause and expose implications of CareAbouts.

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The CareAbouts grid prompts probing questions: What? Why? Doing? Who? Enabling us to avoid making assumptions, and ensuring we dig deeper to understand the “why behind the what”.

Principle #3: Joint opportunity prioritization

Clarity, making choices, and focus are crucial to successfully creating joint solutions, and to strategic account management. Collaborating companies proactively agree on the approach and criteria to prioritize where they will invest resources (time, energy, people, and money) and, importantly, to decide where they will not invest.

We propose a simple framework to guide collaborative prioritization of opportunities for creating joint solutions.

The joint opportunity prioritization tool enables understanding of the “fit” between company and the customer’s strategic agenda, and guides us to assess the feasibility, scope, competitive differentiation, and relative importance of the opportunity itself. This framework provides questions that can be used to screen, evaluate, and prioritize where to play, and how to focus on what matters most.

Joint opportunity prioritization is based on answers to four strategic questions:

  • Impact? If we were to invest in creating a solution for this opportunity, can we have a meaningful impact on what the customer and customer’s customer (end-user) care about most?
  • Attractive? If we were to invest, do we expect this to be good business (aligned with our vision, goals, and strategy), which generates a satisfactory return for our organization?
  • Feasible? Do we have the capabilities, competencies, time, capital/budget/funding, resources, and support to create and execute? What is the likelihood of us being successful?
  • Differentiation? If we were to invest in creating a solution for this opportunity… can we win? Will this solution positively distinguish us in our market place, or are we merely investing to be at parity with competitive options?

To advance on the creating joint solutions journey, it’s essential to secure business alignment between, and within each company. In this regard, we often hear “it’s our company that’s the toughest part, the customer wants to work with us,”

Based on deep insights, prioritization of opportunities, and cross-business alignment we more to the next phase: creating joint solutions.

Phil Styrlund is the CEO of The Summit Group. James Robertson is the company’s president.

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