In my last article, I talked about looking to ecosystem connections to gather peers and customers in order to create strategy stories. I also mentioned that at the root of the empathy-based connections that lead to peers and customers is a strong resonance with subjective truths that we emit.
In this article, we will talk about the process of creating value based on the connections we have with our peers and customers. First, let’s review the five evolution steps of a strategy story.
Previously, we have dealt with (2) through (4), i.e., the process of attracting peers and customers from the ecosystem. Starting this time, we will go into the details of (5), the value creation process.
Before explaining the mechanism of value creation in detail, I would like to consider the concept that is the basic premise of value creation.
In the above figure, value creation refers to the addition of value elements to the value chain/story in the dimension of value, thereby increasing the overall customer value. All the values in the value dimension are connected to the concept.
Therefore, in order to think about value creation, we first need to clarify what a concept is.
Value comes from a concept
Value in a strategy story is each and every element that connects the story. In the following Starbucks example, the value is each of the items enclosed in the square.
Value is embodied in collaboration with peers and customers who share a high level of purity and energy in an ecosystem. The starting point for this is “awareness of the concept.”
A concept is like a spine that gives consistency to a strategy story. In Starbucks, it refers to the concept of the “third place. We can see that each of the value elements in the figure above is beautifully connected to the concept of “providing a third place”, a place that is neither home nor work.
In my company’s example, we have a concept called “ focusing on training outcomes.” Whenever we think of a product or service as a new value element, we always consider how it connects to the concept of “focusing on training outcomes.”
Concept = “Identity” + “Core Values”
Now, let’s think about what a concept is.
Definition of concept (Ochiai’s idea)
A concise expression of the essence of our identity and customer value
In layman’s terms, A concept is the answer to the question, “Who are we, and what value do we truly provide?”
I will also explain the concept in terms of its components. A concept consists of “identity” and “core values”. Identity is who we are. Core values are what we offer to our customers. The concept contains both of these elements.
The concept itself does not necessarily have to be verbalized. Nor does it need to be broken down and verbalized in the form of identity and core values.
However, it is imperative that the concept is shared on a conscious level between peers and customers. It is important to have a shared image of “who we are” and “what value do we offer to our customers.”
If this image is not shared in the company or in the team, even if the work in front of us can be carried out without problems, we may not be able to create new value or make progress in realizing the vision.
In such cases, I think it is a very effective approach to have a dialogue about who we are and what value we provide to our customers, so that we can clarify and verbalize our concepts and align them.
Why can’t we just focus on core values?
“Shouldn’t a concept only be about the value it provides to the customer?” “Why do we need an identity?” Some of you may have these questions.
Indeed, I think that in general, a concept is often defined as the value provided to the customer. However, I would like to suggest that we think about identity together, not just the value provided to the customer.
This is because when our identity changes, our consciousness changes and our behavior changes.
For example, at home I have the identity of a father of three children, but at work I have the identity of the president. The person I am at home and the person I am at work are the same person, but there are differences in the way I am aware of myself and the way I behave.
In the example of my company’s sales team, we have verbalized our identity as “a partner in solving customers’ problems to create training outcomes. This identity was recently developed through dialogue within the team. Prior to this, we did not have a verbalized identity, but we had an image of being a “training service provider (training vendor).”
The identity of “partner in solving customers’ problems” and that of “training vendor” are completely different in terms of self-awareness and behavior.
For example, when we hear from a customer that he or she wants to conduct training on XX topic, if the identity is “training provider,” we will immediately talk about the training contents. On the other hand, if the identity is “partner in solving the customer’s problem,” the question would be “What issues do you feel are behind your desire to conduct training on XX?”
And it is easy to see which way of awareness and behavior leads to our concept of “focusing on training outcomes.”
Thus, identity has a great impact on the way we perceive ourselves, and I recommend that we view it as an integral part of our concept along with our core values.
A concept is at the core of the value and ecosystem that develops
So far we have talked about what a concept is. In the last part of this article, I will discuss how concepts are positioned in a strategy story.
First, the concept brings consistency to the strategy story in terms of the dimension of value. As in the Starbucks example above, each value element is connected to the “third place” concept and interrelated in a consistent way. The concept is the backbone of the strategic story.
The concept also influences the dimensions of ecosystem. For the company, it brings about the self-image of the organization and the team, and as I mentioned earlier, that self-image influences the way we think and behave.
For those outside the company, it is a way to show to whom and what kind of value creation it resonates with. It can be said that the essence of branding is empathy and resonance with the concept.
Thus, the concept is the core of development, both in the value dimension and in the ecosystem dimension. It may not be an exaggeration to say that everything starts with a concept.
In this article, I talked about the necessity of a concept to bring consistency to a strategy story, and that a concept consists of an identity of who we are and core values of what value we provide to our customers.
In the next article, I would like to talk about how a concept is created.
Here are the quests of the day. (If you’d like, please share your thoughts in the comments.)]
・What do you consider to be a “good concept”? What consistency does the concept bring to the strategies and plans around it?
・What are your favorite brands? What concepts (identity + core values) of the brand do you resonate with?