Understanding How Production Capacity Drives Your Value Proposition

production capacityEvery time you put your business in front of a potential customer, you are making a promise to deliver something. This promise may relate to specific features of a product, delivery timelines, or even just an overall experience.

Regardless of the specifics, it’s imperative that you understand exactly what you are promising, as well as your company’s ability to actually fulfill that promise. This promise is your value proposition, and optimally, your competitive advantage. Carefully examining the relationship between this promise and your capacity could keep you out of serious trouble down the road!

Does Your Capacity Support Your Promise?

Is your team actually capable of delivering what you’re promising? What are the odds something might go wrong that causes you to falter? What are the odds that you could be thrown totally off track?

While it’s common for businesses to stretch their capabilities and commit to larger deliverables than may be comfortable, it can be risky to do this on a regular basis. If you consistently deliver buggy software or damaged products because you didn’t plan on proper quality controls and safeguards in your fulfillment process, you’re likely to earn an unwanted reputation — and fast.

Can Your Promises Evolve With the Market?

As customer needs shift and competition becomes more fierce, the infrastructure of your company should be designed to support the adaptation necessary to keep business going.

Depending on the nature of your industry, it may be a competitive advantage to plan for long-term stability and invest in building a robust infrastructure that will just become a bigger and more reliable version of what you’re currently offering. On the other hand, many businesses need the agility to adapt to new market conditions in a matter of months, not years, and it’s in your best interest to sustain an infrastructure than can flexibly support this.

Whichever the case may be, it’s important to carefully consider whether or not your infrastructure will allow you to consistently deliver on the specific promises you are making your customers.

How Are Your Stakeholders Affecting Your Promise?

Different stakeholders on your team are probably going to have different perspectives about the promises you’re making to your customers. Technical people tend to be focused on the real limitations of what you are able to do, sales agents will likely be focused on getting to yes with customers even if they have to bend the truth, and project managers seem to get caught somewhere in the middle.

This means there may be some level of disconnect among your team members about what your team is really capable of delivering, which might result in a disconnect about what you are committing yourselves to deliver.

Another factor is ego. While ego and force of personality can go a long way towards moving your business towards success, an exec with a crazy ego can quickly turn into Captain Ahab and send your team off chasing white whales that deplete your resources and devastate your morale.

As personalities get involved, it’s possible that your team members may disregard things they know better than to ignore when making promises to customers. This also applies to making promises to other stakeholders, such as vendors or investors.

Have The Conversation

Many people take for granted that everyone is on the same page, but that is often not the case! We recommend sitting down with key members of your team to walk through fundamental considerations of each project, as well as to discuss project management as a whole. Have everyone write out their answers and thoughts independently, and then compare the results.

The more you understand your ability to deliver on what you’re promising your customers, the better you can protect yourself against future risks. To learn more about how to judge your company’s production capacity, join us at this year’s SoundBoard conference on July 16!

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About Your Authors

Mark Acosta is Director of Operational Strategies for Adroit Methods, an entrepreneur-run consulting firm that offers best practices and project management.
Since founding Perfect Pitch Concepts back in 2006, Michael has continued to serve as our General Manager and all-around production ninja. He's pretty good at Mario Kart, too.

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