Managing for Growth and Value

“Without customers a company’s value isn’t even worth discussing.”
Peppers & Rogers - Managing Customer Relationships: a Strategic Framework

Managers need a broad perspective if they are to compete successfully and grow the value of the business in real, rather than accounting, terms. At HardSkills we try to get behind the numbers and uncover their real meaning. The HardSkills approach focuses on: value management - the traditional financial statements and ratios were fine during the “industrial age”; nowadays they can give a very misleading picture.

We place customers and the concept of Customer Lifetime Value (CLV) at the centre. By focusing on revenues and the costs of acquisition, retention and service we cut straight to the heart of the matter. With customer satisfaction as a key driver of loyalty we explore the relationship between shareholder value and, for example, answering the phone in under three rings.

Intangibles, which are normally invisible on day-to-day financial reports, exert the greatest influence on the shareholder value. For instance, on average, 75% of the value of a company does not appear on the balance sheet. The real value in a company lies not in its balance sheet assets but in the skills of its people, its accumulated R&D knowledge, relationships, brand, systems.

Most financial measures are based on historical data and are therefore a crude indicator of future performance. In addition, they track “symptoms” not “causes”. To illustrate: a reduction in profit margin tells you that you are making less on each sale but it does not tell you why. However, analysing “performance drivers” – for example, how many visits made by a salesman – will point towards “causes”. This is the approach of the “Balanced Scorecard” and this “balanced” perspective is a recurring theme of our courses.