choicesFrom the list of, “Books that I truly wish had updated editions” comes one of my top 10 favorites, the 1997 book, “The Discipline of Market Leaders,” by Michael Treacy and Fred Wiersma.

I re-read this book…or at least parts of it every year and I still carry through the concepts in my academic and client strategy work. While the examples are brutally dated and some of the companies have moved from good to great to gone, I find the framework of Value Discipline thinking to be a powerful tool that is easy for students and clients to digest and one that is useful in guiding strategic choices.

If you’re not familiar with the framework or the book, or it it’s been a decade since you’ve picked it up, I encourage you to add it to your reading list.  You will come away with some good insights and I suspect some very challenging questions about how your activities, investments and resources are properly aligned around your firm’s true value discipline.

The Basics:

Treacy and Wiersma submit that no firm can be all things to all people and that a firm’s managers must clarify the value proposition (in my terms, why people buy), select a value discipline from one of three major choices and then build the right value-driven operating model to support that discipline.  The three value disciplines that Treacy and Wiersma outline are:

  • Operational Excellence-where firms focus on price and convenience.
  • Product Leadership-where the emphasis is on creating products that consistently push performance boundaries.
  • Customer Intimacy-where firms cultivate deep relationships with their clients.

The authors also appropriately highlight that the choice of a discipline is not a goal or a program or a campaign, but rather “a central act that shapes every subsequent plan and decision a company makes…”

The Power of the Value Discipline Framework in Promoting the Right Discussions:

  • It’s always fascinating to watch a group of executives flail over what their value discipline is or is not. Rarely does a team immediately agree on their true value discipline.  Some of the debates are nearly comical, although out of regard for clients, I will refrain from highlighting the narratives.  Let’s just say that they often align very closely to the particular functional role of the executive.
  • The discussion around Value Discipline forces a critical discussion about “value proposition.” Once again, many firms don’t truly understand why clients buy and what their core value proposition is for their customers.  They are most definitely not Tuned In (another of my favorite strategy and marketing books in my took kit.)  This “gap in corporate consciousness must be closed to improve strategy selection and execution effectiveness.
  • Once the debate over “What are we?” distills down to a dull roar and reasonable selection (of which it cannot be all 3!), the framework requires management teams to assess whether their operating model, infrastructure and resource and investments all support the discipline. This is an important part of selecting the right activities and importantly, saying “No!” to the wrong activities.

Value Discipline Thinking is Important for Independent Consultants/Solopreneurs and Small Firms:

While the content is geared towards larger firms and business units, challenging yourself to think through and focus your value proposition and operating approach is critical for your marketing, messaging and business development activities. Run, don’t walk to define a value proposition that resonates with your target audience, differentiates your from competitors and integrates with the services or products that you are providing.

Sidebar: B-School Educators Can Use the Framework as a Tool to Promote Conceptual Thinking

This book and framework offer a great way for B-school educators to create a powerful and practical classroom learning experience.  A simple exercise is to ask students to categorize some of their favorite companies into one of the three disciplines and to explain the reasons and evidence behind their choices.  It is commonplace for firms like WalMart, McDonald’s and Starbucks to end up in multiple categories.

As part of the discussion, you have a great opportunity to introduce that lofty phrase, “value proposition” into the discussion and make it real for the students as they drill down further into why they actually buy or frequent the various firms.

Last and not least, just as in corporate discussions, the framework provides an easy way for you to delve into the operating models of various firms and to study how activities and investments are aligned to support the Value Discipline.

Great stuff for a rich and practical classroom learning experience!

The Bottom Line for Now

There is no expiration date on “Value Discipline” thinking.  While no book and no framework will provide you with the silver bullet for success, spending some time assessing your value proposition, value discipline and supporting operating model is an important exercise for everyone and every firm, from solopreneurs and consultants to global firms.

So, what’s your Value Discipline?