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BLOG: A New Source of Value

Dallon Christensen | July 25, 2011
In this economy, companies no longer can focus on costs alone to grow their bottom lines.

Everywhere I look through my social networks this week, I see tweets and links to a recent piece by New York Times columnist and noted global thinker Thomas Friedman. Friedman's column took the traditional career mindset to task in today's era of speed, globalization, and technology improvements.

As a career coach to finance and information technology professionals, I read the article for its importance to careers, of course. But the finance worker in me also recognizes in it a key source of value in today's economy.

Simply put, cost control alone will not be enough to keep companies competitive. The Internet's influence means nearly every type and size of business can leverage a global workforce and commoditization of many resources. Tiny companies can outsource manufacturing to low-cost countries almost as easily as multi-national firms. The expensive computer infrastructure of yesterday is replaced by "renting" web-based software for mere dollars per month. My annual software budget is less than a mid-range laptop PC. The race to the bottom of the cost cycle is nearly complete.

Successful companies must start emphasizing higher value, even if it means some cost increases. Our specialized economy demands nothing less than outstanding customer service, delivery, and quality. If you do not believe me, ask any retail establishment with a poor review on Yelp, or an author with bad Amazon.com reviews.

American companies must also realize that services and technology cannot grow the economy to pre-recession levels. The U.S. must begin to emphasize its high-value engineering and design expertise to become a leader in high-tech manufacturing and research & development. Fortunately, high value does not necessarily mean expensive or complicated. The founders of 37 Signals, David Heinemeier Hansson and Jason Fried, have built a great company on high-value software products. These products are great for their simplicity and ease of use, which allows consumers to quickly start using it. For too long, many businesses have confused simple with inexpensive. These businesses do not realize features and complexity do not equate to high-value success.

I have had the privilege of working for companies that have focused on quality and value. These companies have also experienced significant manufacturing success in the U.S. When finance professionals begin to look for value instead of the next cost reduction opportunity, we can help bring the culture of building products back to prominence.

 

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