How To Be A Effective Value Creator

Before we jump ahead into the content, first we would like to make it clear to you the difference between being efficient vs effective. Efficiency is about how well we are doing a job or task at hand. Whereas, being effective is about how useful/valuable the job we are working on.

For instance, pedaling a bicycle on the sidewalk is the best way to avoid injury and use less energy/per miles. So this action is all about being efficient. Reaching from point A to point B in the shortest time without going in cycles is about being effective.

Now, let’s dive into the actual content of this article: how to be an effective value creator. For better understanding, we will combine case studies to show real-world examples. First, find a problem and it should be a big problem. We are talking about a problem that is causing difficulties & inaccuracy for big groups of people or in a high-value industry or domain.

Case in point, Billions of people are affected by increasing retail product prices due to the high inflation rate. The next step involves thinking about the problem and whether or not it is worth solving. Think to yourself, is this problem worth being solved? It is obviously a problem with a high magnitude of trouble and damage it could lead to. This problem at hand is affecting real people which is happening in the multiple-billion dollar retail industry. Taking all things into consideration, the general consensus signals that this seems to be a worthy problem to solve. With the big problem in the picture, we move to identify all the possible root causes of the problem.

To illustrate, such chain disruption may happen due to Covid-19. There is too much money in circulation for consumers to spend due to central banks' effort to keep the economy going by encouraging consumers to spend. Other root reasons for this problem might be workforce disruption due to the pandemic, middleman cost, etc.

To illustrate, such chain disruption may happen due to Covid-19. There is too much money in circulation for consumers to spend due to central banks' effort to keep the economy going by encouraging consumers to spend. Other root reasons for this problem might be workforce disruption due to the pandemic, middleman cost, etc.

Will be almost imposible to solve all the problems in one go with best outcome or output. First you can analyse which root cause can be solved which is within control. Example, root causes mustn’t be related to nature, government, god & also should take lesser effort and involvement from different parties.

Let's start with one, solving the middle man cost problem. How can we remove the middle man cost? The simplest answer to this question is by not having a middle man at all. Then, the product bypasses the middleman to reduce supply chain costs. Now, we already have a problem, one root cause is identified & a possible solution is discovered. Next, we find out how to solve the problem ( i.e., middle main cost) & create irreversible value(covered in previous blog) for the target audience ( i.e., end consumers).

The meaning of the word irreversible in this case points to once a person experiences a new way of doing things, they cannot go back to old practice or norm. For example, begin with eliminating the need for a middle man for reasons such as bulk buying, warehousing and distribution. But how do you do that? Thanks to modern advancement, the role played by a middle man can now be done via technology and supply chain domain knowledge & creativity.

Combining the business model of dropship & crowdfunding, you can create an ecosystem for end-users to buy directly from manufacturers. And end users can get products with 15-20% discounted price. This system will work because no end user will say NO to a 20% discount.

Now the problem is solved and value is created for a mass amount of people.

Next, you begin to roll out this idea. Put together business, technology & people and the end product the end users can use and reap the benefit.

An e-Commerce website combining the idea of dropship & crowdfunding is a profitable venture. The base plan would be where the end users can buy products directly from producers & manufacturers. And as a by-product of any value creation, you will be awarded a transaction fee on the e-commerce site. Companies like Pinduduo(China) & Dropee(Malaysia) are already embarking on this journey. Anyway, we would like you to know that this article is not sponsored by them. :D

Coming to the end of this article, we draw some conclusions from what we learned about being an effective value creator. We learned the difference between being efficient and effective, and how effectiveness is more important in this business. Hence, planning our goal or target or destination( i.e., being effective is the first step) before being efficient is important. This is to avoid going in a circle or the wrong direction and burn lots of effort.

To brief things up, a big problem is worth solving. You need to find the root causes that result in the problem and possible solutions that will mitigate the problem from its core. Focus on creating irreversible value and you can build real solutions around the value. This will reap you the reward soon.

If you would like to learn more about value creation, here is a related article that you can go through: how to create value in all organisations levels.