Why focusing on value builds a sustainable business

Eran Rubens
Oct 1, 2023
4 min read

Updated: Nov 9, 2023

It’s all about delivering value

As customers and consumers, we use and pay for products and services to solve or address a specific need. What we appreciate is how well our need was fulfilled. If you solve a problem or address a need – that’s where you create value. Everything else is simply the supporting infrastructure for value delivery.

When your business delivers value, your customers appreciate it and are willing to pay. That’s why you should always focus on optimizing for value delivery in everything that you do. Every improvement in the value you create or how you deliver it translates to creating a better business of higher value.

I strongly believe that if you align your business and optimize for customer value delivery, success follows. This belief has been a fundamental driver in everything I’ve done throughout my career as well, and I personally believe it has been a key element in my success.

Focusing on other things can ultimately hurt you

When we lose focus on actual value delivery and start optimizing for other things, we can end up hurting our business even if it doesn’t seem that way in the short run.

Aggressive growth is one such example. Growing by excessively spending on customer acquisition, without delivering strong value to these newly acquired customers can end up short lived and is very likely unprofitable. Acquiring many customers that ultimately don't benefit from your product or service doesn’t create value. Think of other ways to grow your revenue that are rooted in value delivery instead.

Optimizing for short term financials is another example. While you must address shareholder expectations as a business, how you do so can be detrimental to your long-term success. It is easy to cut costs by stopping investments in new services that deliver new value, by reducing the customer support staff. You can also improve your topline by sharply raising prices. All these actions benefit the short-term financials, but none improved your ability to deliver value as a company.

Focusing on value drives decisions in the right direction

Creating a culture that is focused on value delivery can drive better decisions throughout an organization. Many small and large decisions are taken daily. When these decisions are biased towards improving your ability to deliver value – either by delivering more value or improving how it is delivered, you are building a better business. With every such decision your business becomes more valuable.

Amazon founder and former CEO Jeff Bezos famously said "Obsessing over customer experience is the only long-term defensible competitive advantage". For that reason, meetings at Amazon have an empty chair for the customer to remind everyone of the simple truth – customers are the company’s most important priority.

When value alignment is in place, the economics follow

When you create and deliver value, a sustainable business model emerges almost effortlessly. Conversely, you can come up with business models where value delivery is out of balance and those will almost always end up rejected by market dynamics or simply unprofitable.

In some industries value alignment is more complicated than others. Healthcare is one such example, where complicated incentives and structure can overshadow fundamental value delivery. While we would like to say value delivery in healthcare is as simple as providing the best clinical service and care for as many people as possible, failing to align to the incentive structure can undermine value delivery. Keep the core value delivery in mind, but then find a way to align value delivery within the ecosystem you operate in to find the right economic model. To do this well, you need to gain an understanding of the industry that goes beyond the direct customer need itself.

Establishing trust and loyalty with Customers

Several years ago, I was asked to help a difficult situation. The company had a contractual obligation to deliver a new capability to a key customer by a certain date. Getting close to the committed date, someone on the team reached out to me with concern about how well the new development will work in that customer's environment but the business was under pressure to meet the contractual obligation since there were financial implications involved.

Instead of trying to put some band-aids on a risky solution that was developed, I asked to speak to the customer directly. On the call I explained that we will not deliver the promised capability on time as we have come to realize it introduce a risk to their mission critical system. I said we are taking a different approach that avoids this risk, and this will incur a three-week delay.

Many people were very concerned about this call and the implication to the contract. The customer told me at a later point that this call specifically was a turning point in the relationship with our company. They felt we understood their needs and concerns and were operating with that in mind instead of thinking about our contractual obligation. The customer ended up renewing a very long term contract with us and later became a design partner for a new product.

Always ask yourself if you are focusing on value

I encourage you to make it a habit to ask yourself if your are optimizing for value delivery in the actions and decisions your are taking. Doing this as a habit leads to building a long-lasting, healthy business.

Put a small sticker on your computer monitor with the question "Am I delivering value?" as a small reminder :)