Our team has just returned from South Africa and what an interesting journey we had! The purpose of the business tour was to empower South Africans with tapestry and entrepreneurship skills. The purpose was to enable our followers in South Africa to start businesses that sell shaggy rugs or carpets.

Mpumalanga Results

Our first stop was Nelspruit in Mpumalanga where we trained 8 dedicated ladies. Credit goes to Sister Elsie for putting together the training and handling all logistics. The icing on the cake is that the ladies we trained are serious about business and before the end of our tour they had registered a company!

A company that handles all tapestry training programmes in the province of Mpumalanga. They will be cascading the training to all the corners of this beautiful province helping to empower women with carpet making skills and assisting them with access to markets.

Other areas that the Mpumalanga Company will work on includes:

1. Creation of an arts and crafts hubs within the province that empower women
2. Central carpet making and selling areas

Access to Markets Tour

The Zimbabwe Business Ideas and Network forum is passionate about markets. Access to markets is one of our big objectives and we include this in all of our trainings. In Nelspruit we went a step further and included a business tour where members would encounter real life experiences in access to markets.

We visited a shopping mall which housed our training venue. The tour only had 30 minutes to showcase to the trainees the skills that they need to access markets, it was also meant to obtain key contacts and possibly orders for carpets.

The experience has to be one of the best for our organisation, we identified potential markets, went into various shops and offices talking about our carpet making project.

The response was awesome as a lot of leads were created, in one travel agent shop-the discussion went for more than the time budgeted! Potential clients wanted more but we were short on time. The smiles on the faces of the trainees will forever be etched on our minds! They witnessed in real time that markets existed, they experienced it, they got to talk to potential clients in their local language and it worked.

It is this magical experience that forced them to quickly go and establish a company. It is the magical 30 minute experience that helped to ignite their interest in the programme, they got feedback-important feedback from locals, their potential market.

For us, we showcased that South Africa has an abundance of opportunities for women. We used the event to network and promote businesses by participants.

For anyone interested in supporting these hardworking women, kindly get in touch with Elsie Zwane on +27 71 184 9263 . You can visit our Facebook Page Southern Africa Tapestry Training.

Next we will cover our bigger training in Durban and more follow up trainings in South Africa, Botswana, Malawi, Lesotho and Swaziland

Whether you’re the CEO of a company or the CEO of your career, it’s your job to create value for others and to capture some of the value you create.

In the case of running a company, you create a product that customers value.

Customers are so excited to receive the value your product provides that they gladly pay the product’s price.

The product creates value.

The price the customer gladly pays is the value capture mechanism.

When you’re managing your own career, the work you do for your employer is the value you create.

The salary, bonuses, or commissions you receive in exchange is your value capture mechanism.

In terms of growing companies’ revenues or increasing your personal compensation, there are two ways to go about it.

The first is to create more value.

The second is to capture more of the value you create.

Most people focus on the second mechanism… getting customers to spend more money or getting your boss to give you a raise.

The problem with this approach to value capture is that only one person wins.

Here are two examples.

Your product creates $100 of “value” for your customer.

You charge customers $50 for the product.

After subtracting the product’s price, the “net value” the customer receives is $50.

Let’s say you raise your prices from $50 to $75.

In this case, it’s a zero sum game.

For you to get $25 more in price, the customer loses $25 in price.

You win, but your customer loses.

This becomes an adversarial dynamic.

In order for you to win, your customer must lose.

In order for your customer to win, you must lose.

The same idea works between employee and employer.

Let’s say as an employee you create $100,000 in value for your employer each year.

Assuming your salary is $50,000, your employer receives $50,000 in “net value” each year from your work.

If you ask for a $25,000 raise, your employer loses $25,000 in value in order for you to gain $25,000 in value.

You’re proposing you keep $75,000 of the value you create, leaving your employer with $25,000 in value.

Once again, this is a zero sum game. For you to win, your employer must lose (and vice versa).

As you can see, focusing only on value capture has two downsides.

First, the value you capture can never exceed the fixed value you create for others. The amount you’re negotiating over is finite.

Second, the relationship becomes adversarial. Only one of you can win and does so at the expense of the other.

Instead of focusing only on value capture, the far more interesting approach is to focus on creating value first, then value capture.

If you create a new version of your product that delivers $200 in value to the customer instead of $100, they aren’t going to balk if you raise your prices from $50 to $75.

With the product that creates more value, even after subtracting your higher price of $75, they receive $125 of value ($200 price – $75 price = $125 net value received).

This is a much better deal than the original product ($100 of value – $50 price = $50 net value received).

Suddenly the customer is quite happy to pay you more when they, in turn, receiveway more value than what they paid you.

Similarly, let’s say you’re an employee that landed a new account, created a new product or found some cost savings measure such that instead of delivering $100,000 in value to your employer, you deliver $200,000 in value this year.

Suddenly there’s no resistance in asking that your $50,000 salary be increased to $75,000.

Even after giving you this raise, your employer now receives $125,000 in “net” value ($200,000 in value – $75,000 in salary = $125,000 in net value).

This too is a better deal than before your raise, where your employer only received $50,000 in net value ($100,000 in value – $50,000 in salary = $50,000 in net value).

The great thing about the “create value for others first” approach is that the absolute level of your compensation is not finite.

If you create $1 million in value for your employer or client, you can earn $100,000 or more very easily.

(Or you can easily switch to another employer who will gladly take your $1 million in value for your $100,000 in compensation.)

If you create $10 million in value for your employer or client, receiving $1 million in personal compensation is very acceptable in comparison.

When you focus only on value capture, there’s a limit as to how far you can go.

Most people’s income tends to hit a ceiling at some point.

Most people tend to focus on value capture, rather than value creation.

These two observations aren’t a coincidence.

Thanks,
-Victor Cheng 

Founder, CaseInterview.com 
www.CaseInterview.com