Why a Compelling Value Proposition is More Important to Your Organization than Mission and Vision

Over the last quarter century I have participated in and led dozens of exercises designed to define organizations through mission, vision, and values. These can be very worthwhile exercises because they help organizations understand really fundamental things like why they exist, what they do, and what they aspire to be. Mission and vision statements, and core values, serve as guideposts that should inform important decisions about strategy, resource allocation, and other issues that drive consistency and sustainability.

However, in the current rapid change, hyper-competitive, highly commoditized world that virtually every organization in every industry now operates in, a more important question to ask in the context of defining an organization might be: Why would a customer choose us?

It is becoming more clear to me, both as a CEO and a consultant in the current VUCA environment, that what differentiates organizations that thrive from those that just survive or even fail is not their mission or vision statements or even their values (values, can however, support critical behaviors). While those are important, there is a highly dynamic, if not volatile “where the rubber meets the road” imperative faced by virtually all customer or client driven organizations today, which boils down to your value proposition to the customer compared to the value proposition of other possible choices offered by the competition. We can often attract customers or students or patients or clients into an initial transaction with catchy marketing or steep discounts or convenience, but over time, and particularly with “big ticket” commitments, in order to succeed in the hyper competitive and commoditized environment that most of us work in, our customers must believe that there is genuine value for them in the product or service we are selling—and not only genuine value, but value that is demonstrably greater than what is available from the competition. The value proposition itself becomes a key differentiator that sustains customer loyalty and advocacy.

While I rarely engage an organization that does not have a mission or vision statement, I frequently find organizations that do not have an articulated value proposition. That value proposition can reflect many things in a given organization or for an identified set of customers such as quality, cost, service, benefit, flexibility, support, etc., but with rare exception, consumers today almost always have choices and usually many choices of where to buy a given product or service, so there has to be a good reason they will choose your organization over another. In some cases (usually in retail contexts) the value can even be related to “prestige” or “image,” but it still has to exist for the consumer.

Even in organizations that have thought about and committed to a compelling value proposition for their customers or clients, only the most sophisticated have a truly customer-centered notion of what is valuable and important to the consumer. It is actually more common to see such statements based on what the organization or vendor thinks is valuable. This happens simply because we human beings get attached to what we are invested in or have experience in or think we’re good at. That is a trap that gets in the way of creating value for the customer rather than for ourselves.

What this all boils down to for leaders is that self-definition is still important for organizations today, but with limited time and resources, having a deep understanding of why customers would choose you over a competing organization (and acting on that) is probably more important than having clarity around mission and vision.

Leave a Reply