So, I just got back from a super-enriching, brain dumping, come-back-with-a-million-ideas weekend with my CPA shark tank, Thriveal. We all gather in Greenville, SC once a year for “Deeper Weekend” and share ideas and knowledge from our firms around the world, along with kickass speakers that are changing the world. Literally. We are rebels seeking to change our profession and adapt to the changing times.
This particular presentation resonated within me. It took me back to Economics 101 (Ugh, who really loves Econ unless you are Alan Greenspan or Ron Baker?).
I was introduced to Stan Shih’s (the Founder and CEO of Acer) Smile Curve, which is an illustration of value-adding potentials of different components of the value chain. His curve was used for the IT PC industry, however as it was presented at my conference, could be used in every industry. His argument is that both ends of the value chain command higher values added to the product than the middle part of the value chain, which happens to be the manufacturing of the product.
Ever looked at the back of your IPhone? “Designed by Apple in California. Assembled in China”
The concept, the branding, the design all came from Apple (the left part of the curve), but the manufacturing (bottom part of the curve) went to a lower cost place. The distribution, sales and marketing efforts are all run by Apple (the right part of the curve). They have it right.
Focus your cost and resources primarily on the knowledge and creativity of what you are selling, rather than the actual making of it. The ideas & processes before it and the marketing & selling after it are what matter the most.
Employers pay for knowledge workers. And, if you are a business owner, make sure you spend more time and money on the tops of the curve. Machines can produce just about anything, even a tax return… but the human intellect of creating the concept and marketing the product cannot be replaced. Food for thought.
If this interests you and you want to know more about this topic, email Nesha at email@example.com