Value proposition, an old concept, is taking on new significance in today’s innovation-driven environment. Business focus has shifted from developing many creative ideas to developing only those that will successfully flow through the product cycle and fulfill a customer need.
The old approach resulted in less than a 10 percent success rate for concepts that started through the product cycle; this can no longer be tolerated. This new book on value propositions outlines a systematic approach to making an early evaluation of potential projects and programs so you can determine if they can add real value to your organization or its customers—potentially saving you millions of dollars and months of valuable time.
Focusing on the necessary data collection efforts, Maximizing Value Propositions to Increase Project Success Rates will help you identify easy opportunities for improvement and will guide you through the process of creating value propositions for the ideas that will drive the organization’s future profits. It outlines a four-stage approach to creating value propositions and explains how to create effective value proposition documents.
The book illustrates the role of the opportunity center in capturing new ideas, describes how to present value propositions to management, and includes an example of a new product value proposition. Detailing a method for continuous review of the improvement process, it will help you foster an entrepreneurial mind-set within your employees and encourage them to actively search and document value-adding ideas.
Through the effective use of value propositions it is completely possible for your organization to increase the number of new products/services it offers to your customers by over 100 percent. It is not unusual for this to result in more than a 40 percent increase in profits per year. Adopting the approach outlined in the text for using value propositions can save your organizations millions of dollars and much time. What could be better than reducing costs while increasing sales?
Table of Contents
Importance of Value Propositions
The Opportunity Center: A New Approach to Capture Ideas and Concepts
How Does the Suggestion Program Work?
Japanese Suggestion Activities
Why Is the Japanese Suggestion System So Much More Effective than the American System?
Role of the Opportunity Center
Typical Objectives of the Opportunity Center
Knowledge Management as Part of the Opportunity Center
Reinforcing the Opportunity Environment
The Value Proposition
Three Levels of Improvement
Three Performance Issues
Stage I—Identifying New or Revised Product or Improvement Proposals
Stage I. Activity 1—Conduct a Benchmarking Process Study
Input A. Processes/Products/Services Targeted for Benchmarking
Planning for Benchmarking and Secondary Research
Consulting Internal Sources
Conducting Secondary Research
Surveying Secondary Resources
Use Available Benchmarking Resources
Evaluate the Quality of Information Obtained and Modify the Search
Identifying Benchmarking Partners
Refine Benchmarking Data Collection Plan
Pretest the Data Collection Plan
Refine the Benchmarking Data Collection Plan
Obtaining Sign-Off on the Benchmarking Data
Collect Benchmarking Data
Identify Performance Issue Best Practices
Conduct a Formal Review of Benchmarks and Leading Practices
Stage I. Activity 2—Performing the Gap Analysis
Stage I. Activity 3—Is There Sufficient Gap to Take Action?
Focus on Performance Gaps and Their Causes and Benchmarking Reports
Prepare a Research Paper Related to a New or Modified Product
Communicate the Organization’s Actual Position and Performance to the Executive Team
Business Process Redesign
Conduct Formal Review of Performance Gap Analysis—Is This Viable?
Stage I. Activity 4—No Action Is Required if There Are No, or Very Minimal, Gaps
Stage I Comment
Input B. Research Projects Previously Identified
Stage I. Activity 5—Prepare Research Paper Related to New/Modified Product
Stage I. Activity 6—Conduct Market Analysis Study
Stage I. Activity 7—Is This a Viable Product?
Stage I. Activity 8—If It Is Not a Viable Product, Terminate the Study
Input C. Random Ideas/Concepts Generated Inside or Outside the Organization
Stage I. Activity 9—Document Idea or Concept Change Proposals
Stage II—Opportunity Analysis
Stage II. Activity 10—Collect New or Revised Product/Service or Improvement Proposals
Stage II. Activity 11—Does the Proposal Meet the Ground Rules to Prepare a Value Proposition?
Stage II. Activity 12—If the Answer Is No, Then Take Appropriate Action
Stage II. Activity 13—Assign a VPP Team and Familiarize It with the Proposed Project Management Documents
Stage II. Activity 14—Collect Required Data
What Are the Benefits of Implementing the Opportunity?
What Are the Possible Adverse Effects If the Change Occurs?
How Will the Change Affect the Overall Business and Is the Business Prepared to Accept Those Changes?
Evaluate the Opportunity
Gathering the Opportunity Analysis Information
Stage III—Preparing the Value Proposition
List of the Key People Associated with the Value
Details Related to Other Value-Added Results
List of Risks and Exposures
List of Assumptions
Other Solutions That Were Considered
Three-Year Impact If Proposed Change Is Not Approved
Net Value Added
Review of the Value Proposition Document
Proposed Process Modification Value Proposition Example
Example of New Product Value Proposition
Stage IV—Value Proposition Presentation
Stage IV. Activity 16—Present Value Proposition to Management
Assemble Value Proposition
Review Value Proposition
Obtain Management Direction Related to the Value Proposition
Publish the Value Proposition
Stage IV. Activity 17—Management Review Outcome
Stage IV. Activity 18—Hold for Business Case to Be Prepared
Stage IV. Activity 19—Rejected/Activity Dropped
Stage IV. Activity 20—Implement Using Current Resources
Assess Stage Results
Reconcile with Organization’s Knowledge Base
Dr. H. James Harrington is the chief executive officer of the Harrington Institute, Inc. In the book Tech Trending, Dr. Harrington is referred to as "the quintessential tech trender." The New York Times referred to him as having a "… knack for synthesis and an open mind about packaging his knowledge and experience in new ways—characteristics that may matter more as prerequisites for new-economy success than technical wizardry…." The author, Tom Peters, stated, "I fervently hope that Harrington’s readers will not only benefit from the thoroughness of his effort but will also ‘smell’ the fundamental nature of the challenge for change that he mounts." Former President Bill Clinton appointed Dr. Harrington to serve as an Ambassador of Goodwill. It has been said about him, "He writes the books that other consultants use." The Harrington Institute was featured on the half-hour TV program Heartbeat of America, which focuses on outstanding small businesses that make America strong. The host, William Shatner, stated: "You (Dr. Harrington) manage an entrepreneurial company that moves America forward. You are obviously successful."
Dr. Harrington’s present responsibilities include serving as the chairman of the board for a number of businesses as well as the chief executive officer for the Harrington Institute. He is recognized as one of the world leaders in applying performance improvement methodologies to business processes. He has an excellent record of coming into an organization, and working as its CEO or COO, resulting in a major improvement in its financial and quality performance.
In February 2002 Dr. Harrington retired as the COO of Systemcorp A.L.G., the leading supplier of knowledge management and project management software solutions, when Systemcorp was purchased by IBM.
Prior to this, he served as a principal and one of the leaders in the Process Innovation Group at Ernst & Young; he retired from Ernst & Young when it was purchased by Cap Gemini. Dr. Harrington joined Ernst & Young when Ernst & Young purchased Harrington, Hurd & Rieker, a consulting firm that Dr. Harrington started. Before that Dr. Harrington was with IBM for more than 40 years as a senior engineer and project manager.
He is past chairman and past president of the prestigious International Academy for Quality and of the American Society for Quality Control. He is also an active member of the Global Knowledge Economics Council. Dr. Harrington was elected to the honorary level of the International Academy for Quality, which is the highest level of recognition in the quality profession. He is a government-registered Quality Engineer, a Certified Quality and Reliability Engineer by the American Society for Quality Control, and a Permanent Certified Professional Manager by the Institute of Certified Professional Managers. He is a certified Master Six Sigma Black Belt and received the title of Six Sigma Grand Master. Dr. Harrington has an MBA and PhD in engineering management and a BS in electrical engineering.
Additionally, in 2013 he received an honorary degree of Doctor of Philosophy (PhD) from the Sudan Academy of Sciences. Dr. Harrington’s contributions to performance improvement around the world have brought him many honors. He was appointed the honorary advisor to the China Quality Control Association and was elected to the Singapore Productivity Hall of Fame in 1990. He has been named lifetime honorary president of the Asia-Pacific Quality Control Organization and honorary director of the Association Chilean de Control de Calidad.
In 2006 Dr. Harrington accepted the honorary chairman position of the Quality Technology Park of Iran. In addition, he has been elected a Fellow of the American Society for Quality Control (ASQC). In 2008 he was elected to be an Honorary Fellow of the Iran Quality Association and Azerbaijan Quality Association. He was also elected as an honorary member of the quality societies in Taiwan, Argentina, Brazil, Colombia, and Singapore. He is also listed in Who’s Who Worldwide and Men of Distinction Worldwide. He has presented hundreds of papers on performance improvement and organizational management structure at the local, state, national, and international levels.
- The Harrington/Ishikawa Medal, presented yearly by the Asia-Pacific Quality Organization, was named after H. James Harrington to recognize his many contributions to the region.
- The Harrington/Neron Medal was named after H. James Harrington in 1997 for his many contributions to the quality movement in Canada
- The Harrington Best TQM Thesis Award was established in 2004 and named after H. James Harrington by the European Universities Network and e-TQM College.
- The Harrington Chair in Performance Excellence was established in 2005 at the Sudan University.
- The Harrington Excellence Medal was established in 2007 to recognize an individual who uses the quality tools in a superior manner.
- The H. James Harrington Scholarship was established in 2011 by the ASQ Inspection Division.
H. James Harrington has received many awards, among them the Benjamin L. Lubelsky Award, the John Delbert Award, the Administrative Applications Division Silver Anniversary Award, and the Inspection Division Gold Medal Award. In 1996, he received the ASQC’s Lancaster Award in recognition of his international activities. In 2001 he received the Magnolia Award in recognition of the many contributions he has made in improving quality in China. In 2002 H. James Harrington was selected by the European Literati Club to receive a lifetime achievement award at the Literati Award for Excellence ceremony in London. The award was given to honor his excellent literature contributions to the advancement of quality and organizational performance.
Also in 2002 H. James Harrington was awarded the International Academy of Quality President’s Award in recognition of outstanding global leadership in quality and competitiveness and for contributions to IAQ as nominations committee chair, vice president, and chairman. In 2003 H. James Harrington received the Edwards Medal from the American Society for Quality (ASQ). The Edwards Medal is presented to the individual who has demonstrated the most outstanding leadership in the application of modern quality control methods, especially through the organization and administration of such work. In 2004 he received the Distinguished Service Award, which is ASQ’s highest award for service granted by the Society. In 2008 Dr. Harrington was awarded the Sheikh Khalifa Excellence Award (UAE) in recognition of his superior performance as an original Quality and Excellence Guru who helped shape modern quality thinking. In 2009 Harrington was selected as the Professional of the Year (2009). Also in 2009 he received the Hamdan Bin Mohammed e-University Medal. In 2010 the Asian Pacific Quality Organization (APQO) awarded Harrington the APQO President’s Award for his "exemplary leadership." The Australian Organization of Quality NSW’s Board recognized Harrington as "the Global Leader in Performance Improvement Initiatives" in 2010.
In 2011 he was honored to receive the Shanghai Magnolia Special Contributions Award from the Shanghai Association for Quality in recognition of his 25 years of contributing to the advancement of quality in China. This was the first time that this award was given out. In 2012 Harrington received the ASQ Ishikawa Medal for his many contributions in promoting the understanding of process improvement and employee involvement on the human aspects of quality at the local, national, and international levels. Also in 2012, he was awarded the Jack Grayson Award. This award recognizes individuals who have demonstrated outstanding leadership in the application of quality philosophy, methods, and tools in education, healthcare, public service, and not-for-profit organizations.
Harrington also received the A. C. Rosander Award in 2012. This is ASQ Service Quality Division’s highest honor. It is given in recognition of outstanding long-term service and leadership resulting in substantial progress toward the fulfillment of the division’s programs and goals. Additionally in 2012, Harrington was honored by the APQO by being awarded the Armand V. Feigenbaum Lifetime Achievement Medal. This award is given annually to an individual whose relentless pursuit of performance improvement over a minimum of 25 years has distinguished him- or herself for the candidate’s work in promoting the use of quality methodologies and principles within and outside the organization of which he or she is a part.
Dr. Harrington is a very prolific author, publishing hundreds of technical reports and magazine articles. For the past eight years he has published a monthly column in Quality Digest Magazine and is syndicated in five other publications. He has authored 40 books and 10 software packages.
Dr. Brett Trusko, is the president and chief executive officer of the International Association of Innovation Professionals (http://www.iaoip.org). He is also an assistant professor at Texas A&M University. Dr. Trusko has been a thought leader in healthcare, technology, and innovation for the past 15 years. He is also a world-renowned futurist who speaks and writes about trends in most major industries. He has served in positions of leadership advising several governments and large corporations.
The International Association of Innovation Professionals was founded by Dr. Trusko on the belief that all civilizations should be prepared to innovate in an effort to solve the world’s problems. The association organizes, defines, and prepares professionals for certification in innovation in an effort to assure employers that their hires are qualified, to guide higher education in the preparation of innovation professionals, and to collaborate with consultants in the preparation of these individuals.
Dr. Trusko is also an adjunct faculty at the Icahn School of Medicine at Mount Sinai and the Baylor College of Medicine. He’s an independent consultant and professional speaker/futurist. With his responsibilities with the association and his numerous writings, he has quickly become a global expert on innovation strategy. The majority of Dr. Trusko’s career was spent with large international consulting firms, finishing that career as a managing director. He has been an academic for the past eight years and founded the International Association of Innovation Professionals in 2013. Inasmuch as the association is the only independent innovation certification organization in the world, he is enjoying the process of building this global confederation.
Dr. Trusko has a bachelor’s degree in biology, a bachelor’s degree in accounting, an MBA in new product development, and a doctorate in business administration. He has been certified as a project manager and a Six Sigma Master Black Belt. He is also a fellow in the Healthcare Financial Management Association. As the association begins the certification process, he expects to earn a credential as a Certified Innovation Professional.
Dr. Trusko has been published several hundred times in journals and magazines around the world. He is the editor-in-chief of the International Journal of Innovation Science and the editor and author of the Global Innovation Science Handbook. His journal, the International Journal of Innovation Science, has an international subscriber base of several thousand.
The best time to stop a project that will not add value to the organization is before it starts. An effectively prepared value proposition will help you make these difficult decisions.
—Dr. Ron Skeddle, former CEO of LOF, Inc., a Fortune 500 glass, plastics, and hydraulics company