3 Value Creation Tips by Niki Singh
“A principle I instill in all my business, ‘Value in Everyday’…”
Value creation sounds like a simple concept when one reads about it in text books. However, most entrepreneurs are stumped when faced with the million dollar question, “How can value be added to the goods and services being offered by a company?”
In search of an answer, we did a little tête-à-tête with Niki Singh, a rising star in the business industry and a leading expert in value creation and entrepreneurship. He gave the following tips for entrepreneurs:
1. Do Not Go For “Zero-Sum” Thinking
The term “Zero-Sum” thinking is often described as a win-lose philosophy where people like us, entrepreneurs and business owners, choose the interest of one stakeholder or party over the other, in order to create or add value. Your customers, employees, investors, and you, are all stakeholders within your business and all these parties need to be satisfied. In most cases, creating value for customers means extra expenditure that can often come at the expense of your quarterly returns.
Similarly, if you try to create value for employees through extra incentives, you can at times end up losing money which is bad for both investors and customers alike. Or if you try to create value for investors, you may make decisions that are good for your bottom-line at the expense of your employees and customers. These are all win-lose situations.
Between you and me, when making important decisions about value creation, always go for the bigger picture and make decisions that result in sustainable value. I strive to provide Win-Win situations in all my companies, and although it might not be possible to create a win-win situation for all stakeholders in the short run, your decision should definitely try to benefit everyone in the long run.
2. Look for Value in the Day-To-Day Business Activities of Your Firm
In no way, shape, or form does this tip contradict the first one. While your decision making should be aimed at the bigger picture, you should always keep a close eye on the day to day operations of your enterprise. You may be losing value due to inefficiencies, or there might be a better way to complete an operation with minimal cost, and there may even be opportunities to create better value for employees and customers. If you ignore the day to day operations in terms of value creation, you will end up losing money. FACT!!
3. Find the Right Balance Between Growth and Returns
You have to find the right balance between growth and returns. Most people fall into the trap of focusing solely on revenue, but opportunities for growth can often occur in the most unexpected or unlikely places. Although in most cases you have to sacrifice one for the other, your short term and long term plans should dedicate a few quarters to growth while others for returns. As the saying goes, speculate to accumulate.
There is always the option to spend less on research, development, training, acquisitions, and growth, and you can save significant amount of returns and have greater numbers to show to your investors. However in my experience, you will halt your growth and end up minimizing your options. If you dedicate all your earned profits towards growth, you might grow exponentially as an enterprise, but will have no returns to show to the investors. Finding the balance is the key, understanding what works for you, your position, goals, aims and objectives.
Growth is an extremely important aspect of any enterprise, and you should definitely dedicate resources into it. However, what you put into growth will take away from the company’s profits in the short run. With this in mind, make sure you have your employees and investors onboard when making decisions about investing in growth opportunities. According to Benjamin Franklin, “Without continual growth and progress; such words as improvement, achievement, and success have no meaning”.
Our interview with Niki Singh went on for a couple of hours, and time flew by as the leading expert in value creation and entrepreneurship talked passionately about entrepreneurship, business strategies, value creation, and his expanding portfolio.
We will be bringing you more gems from the interview in a series of articles. So make sure you keep visiting and do not forget to provide us with your valuable feedback in the comments section. You can also contact myself Kelly Stevens at Sales@mylittlewebdesigners.com and follow us on Twitter at @MLWebDesigners.