On 20 November 2015, SiPi organised a dialogue session titled ‘Creating Value versus Adding Value’. With the government emphasising value creation as one of the key strategies to Singapore’s economy, it is clear that that ‘creating value’ is now the current buzzword in the business climate. The economic slowdown that has hit many local businesses, and manufacturers’ now facing rising business costs and slow productivity growth, has left business grappling for survival. Coupled with the advancement in e-commerce that has made it easier for buyers to bypass the middlemen and find their sellers directly, thus rendering many SMEs ineffectual, businesses must constantly transform to keep up with such changes and cope with these challenges.
Is creating value the answer to these challenges? This set the tone for the dialogue that afternoon, where more than 80 participants from various SMEs attended the session.
Dr Michael Teng, Director of SiPi, started out by stating the difference between ‘adding value’ and ‘creating value’. Value adding, he said, involves taking something with a value and adding on to it for a customer. This may take the form of incentives, loyalty programmes, giveaways etc and is expected in the course of regular business. Creating value, on the other hand, goes beyond simply adding value. To effectively create value, one must first identify a unique quality and deliver this original value to the customer. The uniqueness of what is offered – whether it is an experience, product, or service – ensures an exponential growth.
It was a highly engaging session for participants and SiPi’s consultants alike
There are advantages to both adding and creating value, Dr Teng emphasized. Different businesses having differing needs and at differing stages of their business growth may see value in adding or creating value and there is no fixed route a business can take. Participants were then encouraged to question whether their businesses was more suited to value creation or value adding. This was facilitated by a debate towards the end of the session where participants engaged directly with each other to discuss the positives and drawbacks of both methods.
A participant arguing his case during the debate session
The dialogue ended with an interactive panel discussion during which further questions on how to embark on the value creation journey were addressed. It was mentioned that one of the primary ways for businesses to start creating value is through Business Model Innovation (BMI), which is defined as an innovative way to capture, create, develop, and deliver value to the customers and market.
A participant getting to know more about the BMI programme from SMF’s consultants
Participants found the dialogue to be highly engaging and interesting. Mr Wong, who works as the general manager of a local manufacturing SME, said: “The debate session provided new insights to the topic and some food for thought that I could bring back to my company. I found the dialogue to be quite informative.”