# Value stick _Many initiatives improve operations. Few impact strategy._ --- You're in a strategy offsite. Day two. Twelve "strategic priorities" on the whiteboard, each one sponsored by someone in the room. The team has spent a day and a half debating priority order and nobody can agree. You can see how each one would be an improvement, but are they strategy? --- The CRM migration: worth doing, the sales team wastes hours on workarounds. But would customers pay more because your CRM is better? No. Would suppliers accept lower rates? No. It's an internal efficiency gain, a good idea but not a strategic one. Some of the nine will save real money, and a few sit close to the line, but none of them changes the fundamental shape of what customers pay or what suppliers accept. The compliance training refresh, the reporting dashboard finance has been requesting for six months, the support ticket routing overhaul, the data warehouse migration, the procurement process standardisation, the office redesign, the updated employee handbook, the branding refresh. --- Now the remaining three. Your product requires customers to compile compliance reports manually, a process that takes their team roughly two days a quarter. Build the reporting into the product and that cost disappears from their side. Their willingness to pay goes up by roughly what the manual work costs them, because you eliminated a cost they bear. Whether you raise your price or leave it as headroom that makes you harder to displace is a separate decision. Three enterprise prospects in your pipeline named the same gap. Your product doesn't integrate with their ERP, so their teams re-key data manually and eat the errors downstream. Build the integration and those prospects' willingness to pay rises because you're solving a problem that extends beyond your product's boundary. The competition shifts from features to total cost of ownership. The third is on the supplier side. Your largest input cost is a specialist contractor who provides implementation services. They staff a flexible team to handle your unpredictable project volume, and that uncertainty is priced into their rates. Offer a twelve-month volume commitment that lets them plan capacity and hire permanent staff. Their cost of serving you drops, which means the minimum they'd need to charge drops with it. The economics of the relationship changed so both sides benefit, though you've traded flexibility for predictability, a commitment that only makes sense if your volume forecast holds. --- These three widen the gap between what customers would pay and what suppliers would accept. [[Better, Simpler Strategy|Felix Oberholzer-Gee]] calls that the value stick, and strategy as the discipline of making it longer. The nine that didn't pass the filter are still worth doing. They just belong in the operations review, not the strategy offsite. ---