The purpose of an establishment (company, administration, non-profit organizations, etc)  is to add value to their stakeholders. A business organization, a company, has to deliver money to the owners by selling products or services to customers. At the same time, customers will not buy out of charity. Of course they need to get value in return. This customer value is often thought of as product or service purchased, which is of course true. But it is not the complete picture.

Customers and markets are different. Purchasing an aircraft is of course completely different compared to buy a shoe. But on a general level, all customers follow same kind of value flow. They identify a need, they investigate possible options, the make a purchase decision, the use what they bought and experience tangible value, and they decide to stop usage and finally dispose the product or stop using the service. This is the customers “life cycle value flow” for a purchased product or service.

Gear Customer Value Lifecycle

So, what does this have to do with design of management systems? A lot I would say. The management system has to support the company to provide value for the customer. If we think of “provide value to the customer” is to deliver product or services, we may focus the management system to exactly this. This was actually the reason for the first edition of the ISO 9001 standard, to provide a standardized framework to ensure quality of products to be delivered. Maybe that is why many companies still maintain this as the scope of their management system.

What happens then if we open our minds about which customer values is to be provided by the company. What impact will this have on the management system? Can the company add value to a customer when they are in a process to identify needs of products and services? Can the company add value in all of the described phases in the customers “life cycle value flow”? Yes, of course they can and the company should.

The management system is the design of all elements in a company, including those with external interactions to customers and other stakeholders. The design should be done in ways that add most value for customers throughout their “life cycle value flow”. Successful companies are of course the ones that add value to its customers in the most convenient way (for the customers) compared to alternatives.

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