Saturday, May 23, 2009

Properties of Value - Powerful, Gentle, and Repetitive

The Grand Canyon from Moran Point.Image via Wikipedia

The forces that create commercial value in a business have the same properties as those that create natural wonders. We find them to be Powerful, Gentle, and Repetitive. Erosion from the Colorado river is is neither loud nor threatening, yet it created the Grand Canyon.

There is no doubt that Bonnie and Clyde created cash flow with their business; however, it was cash flow without any Value for others. Contrast that to to their contemporary, Henry Ford. He neither invented the automobile nor forced the public to buy them. His genius was understanding how industrial-age forces could make them affordable. Year-by-year, model-by-model, plant-by-plant he built an organization that produced at lower and lower unit cost. It was powerful, gentle, and repetitive. Today this organization may become the last solvent US automotive manufacturer.

This is the kind of Value every Active Investor seeks in their business or profession. It starts with a sense of something that is Powerful. The Value to others (which translates as the real value of ownership) is directly related to where this sense of Power is located. Personal power produces cash, but not lasting (or salable) Value. Process or Organizational power produces both. Real power that addresses real needs doesn't require Force to permeate a market. It can be Gentle, as long as it's Repetitive.

Consider the activity of closing a sale. Is your product or service Powerful, that is does it use a proven process that will surely address a prospect's core need? If it does, getting to a close is a matter of communicating that value. This may take some repetition. It's not forceful; but its probably going to take several "messages". Here are the properties of value forming a powerful, gentle, repetitive closing process. Every really valuable business process will be similar in nature.

Our job, as Active Investors, is to be continually aligning with these powerful, gentle, and repetitive forces as they apply to our situation. The degree of our ultimate success is based on it.

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