Innovation and Measuring Business Planning Using Value Added Modeling

Vale Added Modeling (a.k.a VAM) is one of the hottest topics in business today. VAM is used to find and measure the most effective strategy, person, or approach for getting a desired outcome. In discussing the use of VAM, businesses often speak of finding innovative ways to do or conduct business effectively.  Most often businesses feel that VAM is achieved by presenting innovative programs and techniques that reduce the noises that outside elements may cause on desired outcomes without performing analysis to ensure value is effectively added.  However, what is often lost when using VAM, is measuring the effectiveness of innovation.

The classic example of VAM as an innovative practice is the development of hybrid cars. The technology of combining gas and electric power claim to produce a more energy efficient, fuel saving, and cost effective mode of transportation. While it may seem obvious that hybrid cars adds value to drivers’ life. Is the car indeed more cost effective than non-hybrid cars? If so, how much more effective are hybrid cars? Is the effective of hybrid cars enough that drivers feel satisfied in the product?

On the innovative side of the argument, the hybrids seem to be a no brainer. However, the true answer will not occur until this value added technology is measured over time. This is the beauty of VAM, which suggest measuring the effects of factors on desired outcomes overtime. In this case, measuring if factors associated with hybrid cars adds more value to the driver’s lives. To understand the effectiveness of hybrids compared to different types of non-hybrid cars (gas-powered and diesel-powered), we must take into account factors such as the cost of purchase, gas per mile, maintenance cost, and pollinates.

Given these factors, some have argued if hybrids are as good as the carmakers claim. Ann Job of MSN Autos reported that in a test by Consumer Reports magazine, which calculates its own fuel economy stats, noted that the Toyota Prius hybrid test car got 44 miles a gallon in real world driving, not the city/highway rating of 55 mpg that the government reports. While 44 mpg is still lower than most cars and the difference in the mpg of a hybrid is a reported 30% higher than like-sized non-hybrid; we still have to ask, what is the true value added? For instance, comparing the Primus to a VW Jetta TDI, is that there are greater value added on mpg. Further, Roy Rex of AOL Auto reports that hybrids are $1750 to $15,000 higher than like-size non-hybrid gas-powered cars. Even with tax breaks and some company incentives, is the difference in gas mileage enough to off set the price difference between hybrid and non-hybrid like-size cars?

Another question is whether than is a greater difference between hybrid and diesel-powered cars than between hybrid and gas-powered cars. The noticeable difference between hybrid and diesel cars is that hybrid cars are cleaner. But Ben Stewart of popular motors explains, “today’s diesels have been engineered to burn cleaner while still delivering impressive mileage.” This further brings to question, what is the true value of hybrid cars versus diesel cars?

The point being made here is not that hybrid technology does not provide more value. The point is that to truly understand the value added by this innovative approach, we must complete the VAM process by measuring the effects of factors (cost of purchase, gas per mile, maintenance cost, and pollinates) associated with hybrid cars against other cars. In this process, we might find that the hybrid is strong in many areas, but lacking in other areas.

Further more, while we can see how hybrids may add value to the driver’s (customer’s) life, VAM is more than just see what the customer values and producing a product based on that value. For years, the US auto industry listened to customers and produced bigger cars that were not cost-effective. The result is the collapses of the US auto industry. Because of this type of outcome, VAM is about sustaining customer satisfaction so to ensure that customers will return or the customer will lead to more sells. The best way to ensure this result is by developing VAM that produces innovative services and/or products; and ways of measuring the effectiveness of services, service delivery, and products over a period of time.

Why using statistics analysis is an important step in the VAM process?

We have all seen list of 10 effective ways to make a sale, or 10 effective ways to win customers. The burning question is how do we know the techniques presented are effective? In social science research, we ask are these approaches valid and reliable? This suggests, are these approaches accomplishing what they claiming, and can we rely on these techniques every time we go to make a sale. The best way to truly know if these approaches are effective is by statistically measuring the effects of these approaches on actual sales made.

In a VAM sense, we want not only the measure the effects of these techniques on sales, but to measure these techniques on multiple person over a period of time. In additional, we want to eliminate factors that may bias the effectiveness of the 10 effective ways to make a sell. Let’s say 5 of the 10 effective ways to sale are 1) Networking, 2) Respecting client’s time, 3) Listening to clients needs, 4) Product Knowledge, and 5) Sell customer only what they need. To measure the effectiveness of these techniques on sales growth overtime, it is importance to only focus on measuring the effects of techniques on sales by collecting data associated with sales. So, do not measure things like quality of product, product warrant, or specials associated with the products. By uses these factors, you are not measuring the value added by the sales techniques. You are measuring the value of the product. Additional, but adding these factors, you can bias the value of the sales technique.

Further, if you are interested in measuring the effectiveness of an innovative product, think about what sets you product a part from other similar products. Here, you do want to assess data associated with the product and not data on the approach of the salesperson. 

Keep in mind that statistically measuring the effects of factors on desired outcomes are not as simple as saying, in the first quarter the company sold ten products using the 10 techniques and this month the company sold 15 products using these 10 techniques. Like the situation with the hybrid car, you are not sure if all 10 techniques are effective, which technique produces the greater sales growth, or if a combination of difference techniques produced the greatest sales growth.

By developing effective or innovative approaches to developing a better product is a start to VAM process. However, it is key that companies continue the VAM process by analyzing data to ensure that they approach or product is 1) valued by the customer and 2) can be sustained over time.

For companies wrestling with implementing VAM, appropriate steps are needed to develop effective VAM to your business.

  1. Brainstorm to understand the strengths and weaknesses of reaching your desired outcomes,
  2. Develop plans to build on your strengths and improve on your weaknesses,
  3. Develop measurable factors (what makes the new improvements better) so to assess effects on your desired outcomes,
  4. Compare again benchmarks from prior years or quarters, and
  5. Use VAM statistical technical to determine if the method used for desired outcomes are total effective.

Devon Rex – The Facts Every Owner Of This Cat Breed Should Know

Corporate law has a long history in the United States dating back to Alexander Hamilton and Thomas Jefferson when the government of our then evolving country was being centralized. With the country growing, it became apparent that decisions were needed pertaining to power within states, citizen involvement, public affairs, and so on. The challenge at that time was that Hamilton strongly believed there should be a central government or industrialized nation. However, Jefferson had a different idea, believing an agrarian nation would work best.

When the Federal Constitution was established in the late 18th century, it had no mention of corporations. During this time, most “corporations” were actually British chartered institutions or those associated with education. However, over the years, financial institutions, colleges, and other new types of corporate entities formed. With no laws in place, states had to fend for themselves, making the best decisions possible, although not consistent among each other. A pivotal moment occurred when a college brought forward a lawsuit to have the right to recognize itself along with the ability to terminate professors. John Marshall, a private lawyer spearheaded the case. This particular case among others helped solidify the need and validity of attorney services.

While a number of other similar lawsuits were filed during the early part of the 19th century, it was during the Industrial Revolution when things really began to change. This era brought with it new ideologies, techniques, and inventions. To protect the rights of these innovations, the need for corporate attorneys rose. Another major change occurred during the Civil War in which manufacturing practices exploded. Again, to protect this massive growth along with the people in power within the corporations, lawyers were kept very busy. The railroad and the significant impact upon transportation and its continuing advances also furthered the need for complex legal support.

In the new and growing world, attorneys enjoyed a position of respect and power. The country was founded by men of law and until the 20th century the profession was honored. Legal professionals were seen as valuable experts.

In today’s world, the nation’s leaders are still by and large men and women of law. However, the public enjoys a love/hate relationship with attorneys viewing them as a necessary evil. What has changed?

In the 18th and 19th century legal disputes were largely confined to business issues. People did not routinely sue one another for personal loss, injury or even divorce. As the law became more accessible to the public at large, the caliber of professionals also changed. Divorce attorneys became reviled for winning large settlements, personal injury lawyers were labeled ambulance chasers and unethical attorneys assisted in black market adoptions. Unfortunately, the entire legal profession suffered from guilt by association.
Billing practices may have also led to the negative perception of attorneys. Hourly billing did not appropriately show clients value but instead set them up to question being on the clock for every phone call and letter written. Being billed by the hour put the client in an adversarial position rather than one of mutual partnership further degrading the view of the legal profession.

Although corporate attorneys do not have as bad of a reputation as trial lawyers do, they too have their battles. In house counsel is often seen as a hindrance to business rather than a partner in the business. Sales teams view the Legal Department as obstructions to closing a deal and even Executives sometimes believe that they must “outsmart” Legal in order to grow the business.

However, Legal does not have to be the enemy! When you consider standard business needs such as negotiations, contracts, pricing structures, and risk management combined with the new challenges brought on by the internet, such as internet fraud, identity theft, and email scams, it is easy to understand the demand and necessity of corporate attorneys. In addition to these business challenges, the law itself continues to change. Bankruptcy is an example. Two years ago, filing for bankruptcy was relatively easy but today, new laws have made this practice difficult. Corporate attorneys must stay abreast of all changes, which can be overwhelming.

Legal counsel does not exist to prevent business but to contribute to growing the business. By making Legal a partner rather than an adversary, you can increase the organization’s opportunities and aggressively drive the business forward. You may even find yourself doing lunch with a lawyer, off the clock of course!

Is The Forever Living Business A Worthwhile Option?

Forever Living is a very successful and popular network marketing company, operating across the globe.

Although they are essentially a ‘health, wellness & beauty’ company and there is a LOT of competition in this niche, don’t let that put you off joining. There will always be competition in any business, some more than others but there will be those who will stand out from the crowd by using the right marketing methods.

Forever Living boast a distributor network that exceeds nine million people! This is very impressive and they serve 145 countries worldwide. The company founder, Rex Maughan had a vision in 1978 of an opportunity for people to experience prosperity and fine health at the same time. His first ever ‘opportunity’ meeting was attended by just forty three people, it was then that he exposed the comp plan and business model he intended to operate. From that time till now, FL has become more successful every month.

There have been many articles about Forever Living in some of the popular magazines such as Inc 500 saying how well the company is doing. There is also a great leadership team behind the company, with a collective wealth of experience that surpasses many company leadership teams.

The Forever Living Products

Aloe Vera is the dominating ingredient in the FL range of products, of which there are a lot to choose from. It’s well documented that Aloe provides several benefits to the human body from its rich nutrients; it’s also effective for soothing skin complaints and burns. The company also has a range of bee products; they actually have their own bee hives to ensure that they can control the source of their ingredients, resulting in a high quality product.

You will be able to get the interest of many different people with the FL product range as there is a wide range to choose from such as weight management, cosmetics, nutritional supplements and skin care. It’s definitely worth taking some time to go through the entire range if you are going to make this your business opportunity, so that you can well inform potential customers and distributors.

Making money with Forever Living

The compensation plan allows you to earn a promotional, front end income from retail sales and a monthly residual (passive) income from building a team of active distributors under you. The FL comp plan is designed to reward those that work the hardest. They also operate a no pass ups system, so that members of your downline can’t be promoted above you without you also being promoted. Assuming that you will do what it takes to be successful, you can make a good living and more with this business opportunity.

There’s a comprehensive training site put together by the company, but ultimately just relying on your ‘warm market’ probably won’t create the kind of results you are looking for… You really need to find a way to bring in new qualified prospects on a regular basis so that you can make a presentation to them. The sad thing about network marketing is that the majority will quit early on into their venture, mainly because they are not making any money and simply don’t have enough people to talk to about the business opportunity they are trying to recruit into.