Differentiation Requires Innovation: Is your value proposition correct?

Differentiation requires innovation. Is your value proposition right?

Written by Ian Richardson

October 30, 2023

Differentiation Requires Innovation: Is your value proposition correct?

By Ian Richardson, Principal Consultant, Fox & Crow Group

Differentiation Requires Innovation

I “grew up” in the Information Technology industry. I started working my first I.T. job at Lansing Community College in Michigan. I worked during the day to pay for school at night.

I also cut my technology “teeth” helping my father. We worked on  installing an early electronic medical records system at his clinic. It was one of the first of its kind in Michigan.

All this, plus some key advice from old bosses of mine, led to a career that spanned 18 years.

That career has culminated in the sale of my old I.T. company and moving on to forming Fox & Crow.

One thing, after all that, has stuck out as a key business lesson.

Differentiation requires innovation.

Let’s set some definitions here:

Differentiation: Why should I hire/buy from/keep you versus the “guys down the road”?

Innovation: Do something new and/or different versus the “guys down the road”.

Seeing it put in those terms has been helpful for myself, as well as the leaders I have the pleasure of serving.

Innovation is the “answer” to the question posed by Differentiation. It becomes your value proposition. Which leads me to my next questions:

  • If you’re failing in head to head bids, why is that?
  • If you are confident that your services are better, or at least equal to, you competitors, why do you lose?

I have a final question to consider: Are you sure your value proposition is the right one?

Is your value proposition correct?

I’ve been reading a lot of Peter Drucker lately. Drucker explores the concept of “knowledge worker” led organizations.

I had a key takeaway from that article:

In an information-based organization that everyone must take ownership of “information responsibility” (1).

Drucker goes on to share examples:

  • Members of an orchestra taking responsibility for playing their notes on key.
  • Healthcare workers charting correct information in their health record systems.
  • Civil servants filing accurate reports.

Drucker’s “magic question” (a question that hits home with me) is straightforward:

“Who in this organization depends on me for what information? And on whom, in turn, do I depend?”

Why all this exposition on information responsibility?

Your value proposition should must answer another Peter Drucker “magic question.”

“If we did not do [your current service offering / value proposition] currently, would we still go into it, knowing what we know now?”

You CAN’T answer that question without good information.

The below questions can help you address Drucker’s query:

  • What is causing your customers to buy elsewhere?
  • What value do you bring that a competitor does not?
  • What can you do that would be valuable to your customers that your competitor is not providing?
  • Is that potential offer something you can do well?
  • What would the costs associated with starting that offer be?
  • Is what you’re doing currently becoming a commodity offering? Is demand and/or price control tanking?


When to abandon a service offering focus

Knowing when to “jump a curve” and develop a new service offering focus is not easy. I’ve had many conversations around strategy and organizational rebirth.

One conversation with Michael Crean stands out in my mind. It waas around ‘burnout’ on a current business model (More on that here and here).

There is no universal truth on when you need to abandon a current focus and reinvent yourself.

As with most “big decisions”, I’d start with gathering perspective on the topic.

  • Look at opportunity versus risk of your current offer. Query your team on how they feel around it.
  • Create a good list of potential new areas of focus. Run those through market analysis.
  • Perform Opportunity and Risk analysis and choose the best options.
  • Sleep on anything before committing.

If you’re looking for help figuring out “what’s next” – I’m here. Feel free to grab some time on my calendar.

I talk about this topic and more in my newsletter – you can sign up here


(1) Peter Drucker, Harvard Business Review, “The Coming of the New Organization”, , Pg 105,

(2) Peter Drucker, Harvard Business Review

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