The key to securing business growth is the ability to win over new customers. Well, there´s a little more to it than that, but it´s certainly a good start. And to achieve this you must first fully understand exactly what drew your existing customers to your business, then hone and replicate that experience. All this sounds wildly obvious, of course, and so it should, but the next step, and a major aid to your potential for business growth, is to use your in-depth knowledge of who your customers are and what they value most from you in order to sharply focus what you offer and how you present it.

The Value Discipline Model

This model for business growth and development was presented by Michael Treacy and Fred Wiersema in an article they wrote for the Harvard Business Review in 1993. It looked at highly successful companies such as Dell, Nike and Home Depot and asked what lay behind the business growth which saw these companies transform themselves from small start-ups to market leaders in their chosen fields. What they found was that these companies and others like them had achieved success by narrowing their business focus rather than broadening it. The key to business growth for them lay in defining precisely what their customers valued and then catering to that preference.

This is the value discipline business model.

Some customers value low prices above all else (operational excellence value discipline); others look for a company they can trust (customer intimacy value discipline); while others expect innovation and trend setting from the businesses they frequent (product leadership value discipline). Defining which category the majority of your customers fit into will allow you to tailor your business to precisely fit their needs and doing this through every aspect of your organisation could be vitally important to securing sustainable business growth.

Put in the simplest terms, operational excellence refers to a company providing goods and services at the cheapest possible rate whilst maintaining an acceptable level of quality, customer intimacy relies on building a long-term bond with customers through going the extra mile and providing exceptional service, and product leadership entails the production of cutting edge, innovative brands and products. Choosing which discipline is primary to your business growth means selecting one that matches both the needs of your customers and the reality of your business and industry.

Discovering what your customers value

The first step towards pursuing business growth via a value discipline is to profile your customers. Who are they and what draws them to your company? What do they consider to be the extra value you offer that marks you out from your competitors and what more could you do to maximise this value? It´s unlikely that all of your customers will fit into one particular category but it´s important to understand the weighting towards each of the three value disciplines. The key to maximising business growth through this process lies in analysing which type of customer forms the majority of those who come to you – what, in effect, is your ace card?

An analysis of the rest of the market is also vital. Who are your competitors and how have they achieved their own business growth? Are they pursuing a particular value discipline and, if so, is it the same discipline your research is pointing you towards? Often, in order to make the breakthrough and achieve the kind of business growth that ultimately results in market leadership, a company will choose a value discipline at odds with that pursued (if, indeed, any particular value is) by their competitors.

Nike, for example, rose rapidly to the forefront of the sports shoe market by embracing product leadership. While others may have concentrated on keeping costs down, for what was then commonly seen as a fairly “low fashion” item, Nike used technological innovation and powerful marketing to re-position themselves as purveyors of cutting edge, innovative products, to the degree that certain of their trainers have achieved the status of cultural artefacts. Looking at Nike it´s plain to see that this kind of dramatic business growth won´t be achieved through dabbling. A value discipline has to be embraced at every level and in every area of the company. Nike is Nike; from the distinctive “swoosh” logo, through the appearance of the stores, to the materials used in the manufacturing process and the sporting stars chosen to endorse the brand. The result is that Nike attracts customers who are not just buying some trainers, but are investing in a whole lifestyle choice.

Value Discipline Model implementation

Once you´ve identified the value discipline that best fits your company and the demands of your customers, you then have to ask yourself what changes need to be made in order to embrace this discipline, how much these changes might cost, and whether it is practical or even possible to make these changes.

One of the most common barriers to change is resistance from the powers that be within a company. Yes, change can be risky, nerve-wracking and costly, but if the end result is a more profitable, stronger organisation ready to achieve the business growth it is capable of then nothing should stand in its way.

That said, discovering your company´s value discipline is often not a black and white task. Often you will receive a mixed bag of responses with no clear winner or the board may not be convinced that there is enough weighting towards one over the other two.

The decision to embrace, or otherwise, a value discipline, and to choose which particular one is apt for your business, will be down to a careful weighing up of both internal and external factors. The market in which you work and the demands of your customers need to be balanced against your existing procedures and retained skills, as well as the cost verses benefits calculation. And if, in the final analysis, a value discipline is to be your guiding force, it needs to be embraced fully and firmly if it´s to lead to worthy business growth. If you still need convincing, just look again at the companies Treacey and Wiersema cite in their article to see what is possible.

In the words of Nike themselves: just do it.