Value

By JJ Atencio/ Game Changer

Businesses that become immensely successful have a few things in common. One is that they are innovative.

The other is that their products generate great distinctive value. They prove the popular notion that “the main purpose of business is simply to make money” is simply too outdated to be of any use.

I was telling the 700 participants of the Cebu Entrepreneurship and Investment Summit over the weekend that business should be all about creating value. Successful businesses know this. When that value is appreciated by society, customers buy the product so that value is returned to the enterprise through its profits. Therefore, money earned in this exchange of value is nothing more than a by-product of that success. The more a business is able to provide value, the more society returns the value in terms of higher sales and profits.

I see this happening even in micro enterprises. The creation of value may be a simple innovation, but always rooted in a deep understanding of what the market needs. Look at the sari-sari store, for example. It is able to thrive in spite of intense competition from convenience stores and community malls because it is able to provide one undeniable distinct value: informal credit to its customers. This value has the power to become the undeniable truth as to why businesses continue to thrive even during bad times.

The fast-food industry is the same. They have become a multibillion-peso enterprise by providing the value of efficiency, and increasing the value for money by innovating along three ways that we take for granted today. The first was streamlining their ordering process by creating “counters” to take orders, instead of the usual “table” orders. The second was “upsizing” and third was the creation of the concept called “value meals,” both of which provided economies of scale and added value for money by simply allowing customers to buy more food with less effort.

Lasting value is created when we are able to innovate our products so that they answer the needs of people in ways never thought of before. The closer we are to understanding the realities and real deep-seated needs of our target market, and evolving our products to perfectly match those needs, the more successful our business becomes. In many ways, products become a vehicle where these needs and aspirations of people we are committed to serve become a reality.

A business simply needs to be aware of the kind of value it creates so that it can achieve success.