Profitability is driven from the value equation:

Demand + Efficiency + Efficacy = Profitability.

Demand begins with a deep understanding of your market. It answers questions such as:

What are the basic satisfiers, or “must haves” that you customers expect, and that your organization will need to fulfill to be successful?

Answers to this question are clarified when an organization determines:

Efficiencymeans that every customer receives on-time, complete, and correct (OTCC) service. The objectives of efficient customer service are no wasted steps, no unnecessary waiting, and no unnecessary costs for the customer.

Efficiency answers the following strategy question: What resources and capabilities will be required to deliver optimal customer value?

Efficacyensures that the purpose of the organization is fulfilled in every customer engagement. High quality outcomes, customer satisfaction, and repeat buying behaviors demonstrate good efficacy.

Efficacy answers the following strategy question; How do we sustain our ability to provide that unique value?

Profitabilityis the reward for organizations that effectively differentiate from competitors, increasing market demand, optimizing efficiency, and achieving efficacy.

This enables an organization to maximize shareholder value, cash flow, profitability, and equity.

Connecting the dots

Can you see how these Financial Value components connect back to the three key strategy execution steps?

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