How Can I Determine Value to My Business
Business owners, CEOs, and leaders often grapple with assessing the value of inputs TO their business. For example, when assessing a new supplier relationship, it is good practice to understand the needs of the business and how a given supplier can deliver value in the context of those needs.
We see assessing value as critical when considering taking on new customers/customer segments, evaluating the preferred candidate for a vacant position, evaluating software solutions, and other business improvement ideas.
Visage Growth Partners uses a super pragmatic approach to this. We call it the CISQO framework.
The "CISQO" Framework
The "CISQO" framework assesses your business needs against the following business factors: Cost, Innovation, Service, Quality, Occupational Health and Safety and Environment. It provides a holistic view of what adds value to your business, emphasising the importance of balancing financial achievements with strategic risk mitigation.
We encourage our clients to use these criteria with a "balanced scorecard" approach. This assumes that all elements can not be equal and must be prioritised. For example, for a maintenance company, the quality of parts supplied to them may be far more important than the cost of the parts they buy in and use in their maintenance duties. Similarly, they may find that innovation of their suppliers is also paramount, as they can provide quicker, safer, and longer-lasting suggestions for the way in which maintenance can be performed, as well as how enduring the "fix" may be.
Cost
Effective cost management is pivotal. It's about minimising expenses and optimising them to support sustainable growth and quality enhancement.
Innovation
The capacity for innovation determines a business's ability to adapt and thrive in evolving markets. It's a key driver of long-term value, setting the foundation for competitive advantage.
Service
Exceptional service quality not only retains customers but also attracts new ones. It reflects the business's commitment to excellence and its impact on market reputation.
Quality
Product or service quality is intrinsically linked to a business's value. High-quality standards ensure customer satisfaction and loyalty, which are crucial for revenue stability and growth.
Occupational Health and Safety
Focusing on occupational health and safety demonstrates a business's commitment to its employees, reducing risk and enhancing productivity.
An Overlooked Element of Value
Risk mitigation is often the silent element in determining the value of a business. Identifying, assessing, and addressing potential risks safeguards the business and enhances its value by ensuring stability and reliability. Effective risk management strategies can significantly reduce potential threats to operational continuity and financial security, thereby increasing the business's attractiveness to investors and stakeholders.
Try using the CISQO framework for the next decision you make about your business. It's a great way to get some super pragmatic "forced thinking" into your team and makes for a rich and robust subsequent discussion.
At Visage Growth Partners, we specialise in demystifying business growth. To explore how we can assist, contact our team of growth advisors.