The ERRC Model

A continuation from yesterday...

So if you've been asking how you can value innovate in your organization to create more value for your customers while reducing the operational cost of your business unit, you can use the ERRC Model from the Blue Ocean Strategy.

The ERRC Model is a simple 4 step model to help you identify potential ideas to value innovate in your organization. Here are the 4 Steps in it's simplest form:

1. Eliminate

Ask yourself if there's anything in your current organization which you can do without. Most often blue ocean strategists review the systems and processes being applied in the organization and question whether they are really serving a purpose or not. Another good place to question what you can eliminate is to ask what the customer can do without. Most of the time we load the customer with plenty of benefits, most of which they don't want or need yet end up paying for. 

2. Reduce

Sometimes you don't have to eliminate. Instead you can reduce. Question what it is you can reduce in your organization to reduce the cost for your organization and for the customer. By elminating and reducing unnecessary benefits, systems and processes you instantaneously create a more price competitive product while also simplifying the product / service offering.

4. Raise

Once you've questioned what you can eliminate and reduce ask what you can increase. You should focus on increasing aspects of your product / service offering that customers highly value. Focus on giving your customers what they like. 

5. Create

Now here's where your creativity kicks in. If you have an idea you would like to add to your business here's where it comes in. But make sure you focus on creating benefits that customers actually want. 

The four step ERRC Model can set you on your way to value innovate. It'll help provide a framework to work with and it applies to everybody. I suppose it's easy to see how this model applies to busienss owners but the truth is its also applicable to any individual who works in an organization. If you don't deal directly with customers your focus should be on how you can value innovate to offer better value to your colleagues (who are your internal customers).

For more information on the blue ocean strategy simply google it!