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Delivering the desired value configuration by the market is the third step in the ideal journey toward customer satisfaction.

We know that customer satisfaction depends on how well we understand their needs and expectations and, consequently, how well we can design a value configuration capable of meeting these demands.

Now we need to deliver the value configuration desired by the target customers. Organizing the resources at our disposal to materially create what we designed in the previous phase, materializing the strategy.

This involves execution, one of the fundamental disciplines of management.

Execution Gap

The Execution Gap is the discrepancy between what we have designed and what we can deliver given the limits of existing resources.

According to a famous saying, “There’s many a slip ‘twixt the cup and the lip.” In our case, the slip represents the compromises we necessarily have to accept in the process of realizing products and services.

These compromises can be organized into 4 fundamental categories: costs, quality, people, and time.

Costs

From a cost perspective, it’s evident that we never work with infinite resources. The economic problem is precisely finding the best possible use of resources, by definition limited and scarce, necessary to achieve a certain goal.

Economic resources are by definition scarce. We all have a budget, and we must do our best to stay within its limits. This will lead us to make choices, to define priorities. But these choices, as well as budget definition, occur at an initial stage. And, over time, the assessments on which they are based may prove to be more or less reliable.

There are techniques to minimize errors in this phase, but it always involves planning, an activity characterized by uncertainty. We already know that we will have to make choices to avoid depleting the budget prematurely. Because some activities may have cost more than expected. Or because, aware of the basic unreliability of forecasts, we will have to try to be cautious.

Quality

We live in a reality where the possibilities of choice are practically limitless. The products and services we use to build our product, and our value configuration, influence the quality of the offer we will put on the market.

We know we don’t have unlimited economic resources, but we also know that quality comes at a cost. The products, services, and processes supporting our offer must be of a level adequate to the expectations of the customers to whom it is intended.

So, this trade-off between costs and quality is the first compromise. We must respect a budget, but we must also aim for a quality appropriate to the level of offer we want to put on the market. Supplier management, the purchasing department, and production processes, are all critical elements in this case.

People

The quality of the products and services we use to create the value configuration to be put on the market is certainly important. But all company processes are managed by people. From budget definition to managing relationships with suppliers, from the practical realization of our products and services to marketing and communication activities with the market.

People can make a difference; human capital can be a real competitive advantage because it is difficult to imitate.

Part of the resources invested each year must be dedicated to improving the professional profile of people because this will have a direct impact on customer satisfaction.

People work based on their professional profiles, which are based on previous experiences, knowledge, skills, and attitudes.

There are tools that the company can invest in that have an impact on the professional profile of people, for example:

  • training (impact on knowledge and skills),
  • information systems and consultancy (impact on skills),
  • market research (impact on knowledge),
  • incentives and remuneration systems (impact on attitudes).

Time

Time is also a scarce resource by definition.

And it is one of the key elements in the economic problem because usually costs are immediate, but the results of investments are deferred over time. This deferral introduces the concept of risk.

“Time to market” is the period needed to go from the idea of a product or service (when investments begin) to its launch on the market (when revenues begin).

An entrepreneur must do everything possible to compress this time to the maximum. Because that’s what needs to be financed and determines the risk of the entrepreneurial initiative.

But compressing time means creating pressure on the structure, on people, and accepting a greater chance of errors in choices. And thus further compromises.

Next step: communicate the value

Costs, quality, people, and time are the internal variables of the company equation. Understanding how they work and the relationships that bind them makes a difference in the ability to achieve customer satisfaction.

Comprehension and Strategy gap, therefore, concern especially the entrepreneur and the executive level, those who make the strategies. The Execution Gap, instead, is directly linked to management, to the ability to implement and manage people, resources, and projects effectively and efficiently.

Managing well the activities necessary to create the value configuration desired by the market is very important for customer satisfaction. But we are only halfway through the journey.

The next step is to communicate the value we are creating to our target market.