A guest post by Karen Martin, author of Value Stream Mapping.
In 2009, Inc. magazine listed value-add on its list of 15 Business Buzzwords We Dont Want to Hear. In 2012, value-add was again reviled, this time in Entrepreneur magazines 10 Most Useless Business Buzzwords. And six months ago, it appeared yet again on a do-not-use list in Chicago Tribunes: Buzz words are evil and must be stopped. So whats the deal with this term? Why do some bristle when its used? Could it be that when its used properly, value-add is the linguistically accurate term for a desirable business element that most organizations dont understand and dont deliver onand therefore, reject?
In the 1990s value-add became strongly associated with Lean management practices. The seminal books Lean Thinking and Learning to See introduced the term as a way to differentiate between product features that customers care about and dont care about, and as a way to classify operational effort and expense. In the latter case, classifying work activities and cost as value-adding and non-value-adding became central to the current improvement movement, which focuses on eliminating waste versus traditional improvement methods that focus primarily on optimizing work.
Part of the irritation around the term value-add may be grounded in misunderstanding what the term actually means. But the other part of the irritation may arise from the rejecting the reality that is difficult to confront. Most organizations have no idea what their customers actually value and how much they do that adds expense but provides no value whatsoever.
Enter Value Stream Mapping, a highly effective management tool for a leadership team yes, leaders to see how work flows or, more commonly, doesnt flow from a customer request to delivering on that request. Value Stream Mapping is a highly visual analysis and design tool that enables leaders to seeoften for the first timethe gaps, redundancies and disconnects that add expense and dont add customer value, and make strategic decisions about how best to operate. This highly visual and data-based approach for confronting the truth and looking from the outside in forces frank discussions and creates the means for leaders to align around what really mattersoften for the first time.
Delivering value is the single most important differentiator that exists in todays marketplace and is fundamental to an organizations success. Learning how to add value in a highly efficient way separates the wheat from the chaff. Value stream mapping helps build this capability.
Using the term value-add because it sounds good is wrong, and its incongruent use is disingenuous, which breeds cynicism and distrust. Just because you say it is so doesnt make it so. But avoiding the term value-add removes a fundamental way to describe actions that customers care passionately about and is the very reason why businesses exist.
So go ahead. Use the term. As long as youre really adding customer-defined value.