Friday, July 22, 2005

The Price of Value


Our perception of value changes depending upon context. A company's stock might have a value of $100 per share on June 1 and six months later it is $130. Did the company's value really increase by 30%?

Coke is worth 25 cents a can at Kroger, but the same Coke is $1.00 in a vending machine and $2.50 at a restaurant. Same Coke; different value.

All value should flow from the customer who buys so that employers, suppliers and shareholders profit. But creating value is not so easy. Only a few CEOs have created consistent value for as long as a decade. Value gets lost amidst conflicting goals, demand for quick solutions and corporate complexity and legacy compensation plans that fail to reward innovation ... these lead to a paralysis that all but a few of the very best companies seem able to overcome. The ones that do succeed keep their eyes on the customer.

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