value proposition

The strategy of one of my business units* is in conflict with the strategy in one of my other business units and creating a major cultural problem. Weird insight, but I think I’m relieved. I’ve certainly learned something new.

Perhaps you have read Treacy and Wiersema’s 1995 book, “The Discipline of Market Leaders,” in which they introduced the concept of choosing a primary value proposition and sticking to it. The three value propositions are Customer Intimacy, Product/Process Superiority, and Operational Efficiency. Anyway, the theory is that you have to deliver on all three at a minimum standard necessary to compete, but then you have to select one – and only one – to excel in.

Following Treacy and Wiersema’s instruction (with a lot of Michael Porter and Balanced Scorecard thrown in for focus and tracking), I have kept a very steady hand on the Customer Intimacy throttle the past 10 years. And it’s worked. Our customers reflect our brand back to us as a Customer Intimacy brand. But we have one equipment division that never manages to get out of the chute. It’s fraught with tension and misalignment at every turn. And I haven’t been able to figure out why.

Finally Alan, one of the brothers who owns the company I run brought back some materials from a speaker he’d listened to named Edgar Papke from CDG. CDG’s premise is that for each value proposition there is actually a cultural proposition, and that if you inappropriately align culture and value proposition you’ll end up with lack of effectiveness. The culture for Customer Intimacy is Collaboration – and that’s what our company has. A strong team-based culture that demonstrates and benefits from extensive collaboration. The culture for Operational Efficiency is Control, and the culture for Product Superiority is Competency/Competitiveness. Alan said that it seemed to him that there was value proposition misalignment – and when we started evaluating it, there was. His brother (who is the engineering lead for the troubled division) definitely has a Product/Process Superiority value proposition in mind for that division. Their sister, the Product Manager for the division, has a Customer Intimacy bias. And of course the division shares nearly all its resources with the greater corporation (the division represents about 5% of total revenues), and the management style and philosophy of the corporation is Collaboration, supporting a highly dominant value proposition of Customer Intimacy.

It’s so simple, really, and should have been clear sooner. But of course, it wasn’t. I kept chalking the frustrations up to difficult personalities and perhaps bad product ideas, and therefore didn’t follow my own dictum of “first you solve the process, then you solve the people.”

Anyway, I’m now on a rousing mission to figure out how to achieve two different value propositions while fully cognizant that we can’t expect people to function in two different cultures. Knowing that this is the problem is highly instructive, and while I don’t have the answer yet, at least I’m working on something likely to yield results. I guess it’s time to be conscious about all my business tools. Given that this is a business conflict in the true meaning of the word, maybe I should give Eli Goldratt a nod, dust off my Evaporating Cloud skills, and see if there’s a simple solution in here somewhere.

One of the fastest ways to erode profit, confuse customers, and frustrate employees is to let different parts of your business operate at cross purposes. Sales wants growth at any cost, but operations can’t fulfill what is sold. Finance wants to cut expenses, but marketing is starved of the resources it needs to generate new business. Customer service is incentivized to close tickets quickly, while product development needs deeper feedback to fix recurring issues. When you lack business alignment, these are the results.

None of these contradictions are intentional. Each department is usually doing what its leaders believe is right. But when decisions are made in isolation, without a shared system of priorities and accountability, the business as a whole suffers. This problem has a name: suboptimization. It happens when one area optimizes for its own success in ways that undermine the success of the larger organization.

Lack of Business Alignment Leads to Suboptimization

You can usually recognize suboptimization by its symptoms:

• Confusing or inconsistent customer experiences.
• Strategic initiatives that start strong but fizzle because departments aren’t aligned.
• Employees complaining that they’re pulled in different directions or “fighting fires” daily.
• Leadership meetings spent more on turf battles than on pursuing growth opportunities.

Two Building Blocks for Business Alignment

Avoiding this trap requires two disciplines. The first is scenario planning. Rather than trying to predict the future, scenario planning asks structured “what if” questions. What if a trade war drives up costs? What if a new technology disrupts competition or changes customer expectations? What if labor shortages or supply chain breakdowns disrupt delivery? By working through these possibilities in advance, leaders can see how their decisions would cascade across the organization, expose contradictions, and align responses before the pressure is real.

The second is a management framework. Communication alone won’t solve misalignment; without structure, more talk often just means more noise. A management framework provides that structure. It ties decisions and actions to shared goals and measures, sets up clear accountability, and creates a common language for making trade-offs. Frameworks come in different flavors, like the Balanced Scorecard, or Objectives and Key Results (OKRs), but they all exist to connect strategy to daily action. With a framework in place, sales, marketing, operations, finance, and service can pursue excellence in their own areas while still pulling in the same direction. In our WeRX 360 Method™ we refer to this as having all your arrows in alignment.

When you combine scenario planning with a management framework, you build a business that can adapt to outside pressures without collapsing into internal conflict. Departments still excel in their own functions, but they do so in a way that supports the enterprise as a whole.

Vigilance against suboptimization isn’t optional. Every business must manage the tension between departmental success and overall success. Scenario planning prepares you for the external shocks; a management framework ensures your internal responses don’t contradict each other. Together, they give you the best chance of moving forward with strength and coherence.

Considering that we create and sell services, and not physical products, people are often surprised that Art Direction is treated as one of the most critical roles in our company and sits in the Strategy pillar of our organization chart (in our org chart, we don’t assign roles based on traditional departments or hierarchy—we organize them based on function and purpose. It’s a role-based structure, not a title-based one, and we place each role where it most powerfully contributes to the company’s mission).

Art Direction sits in the Strategy pillar —not in marketing or creative.

Because for us, visual identity is strategic:

• It shapes how people experience our services.
• It sets the tone for trust, quality, and clarity.
• It communicates what words alone often cannot.

When visual identity is siloed as “just design” or “just marketing,” the result is often a disjointed brand experience—one where strategy says one thing, but design suggests another.

In any business where perception and execution are tightly linked, how things look is inseparable from how they work—and how they feel to the customer. Design isn’t just window dressing. It’s infrastructure for belief and trust.

That’s why we treat visual language as a strategic discipline—not just a creative one. Because for a brand to fully resonate, design has to be attached to everything: the product, the packaging, the platform, the physical space, the trade show booth, the pitch deck, the onboarding email. Every touchpoint is a chance to tell a consistent story. Or to undermine it. For example, when every customer service or help desk email design aligns with your service tone and with your overall brand... when every shipped package (labels, packing materials, even box design) reflects your design vision and brand promise... clients gain clarity and confidence with each interaction. That's how you build strategic follow-through into your branding.

When design carries the same intent as strategy, customers don’t just understand what we stand for—they feel it. From beginning to end.

And About Losing, Then Reclaiming, the Plot

One of the reasons trade shows are so instructive is that they compress market dynamics into a time-bound, physical space. For a few days, market elements that usually play out at a distance from one another show up in the same building. Buyers, sellers, educators, service providers, logistics teams, security, food service, marketing, operations …  all of it running at the same time, under the same constraints, with real money and real relationships on the line. Then it packs up and goes away.

When a trade show works, you can feel it without needing a spreadsheet to tell you so. All the parties are excited to go, not just because it’s at a spa or in a fun city. They are excited about the event itself. Inside the event, conversations are taking place everywhere. The right people seem to keep finding one another. Time feels well spent. When it does not work, it’s just as apparent, even if no one can quite put their finger on why. There is movement, noise, activity, but something feels off. Artificial even.

My marketing company does mostly B2B marketing, which includes managing trade shows. We have recently taken on responsibility for a new show, and we’ve been struck by how clearly this environment exposes problems that exist not only in trade events, but in marketing in general. The problem is about what happens when you stop seeing the world through your primary customer’s lens, and what it takes to find your way back.

Trade shows are often described as serving two audiences. Exhibitors and attendees. That framing is not wrong, but it is incomplete. Exhibitors are the primary customers of a trade show. They fund it. They assume the risk, pay for the booths, the infrastructure, the marketing, the education, and the experiences. Attendees create the value for exhibitors, which makes them essential, but always and only in relation to exhibitor success.

When that relationship is understood and respected, trade shows are remarkably effective. When it starts to blur, shows begin making decisions that feel reasonable one at a time, but collectively undermine the very ecosystem they depend on.

Over time, many shows have drifted in this way. Not because anyone set out to fail them, but rather, because it is easy to confuse activity with progress.

Our most recent show provides some good examples of this. To sell more booths, the show opened the door to exhibitors whose products were more at the fringes of the core category. Those exhibitors, understandably, attracted buyers who were primarily interested in those peripheral products. Over time, the center of gravity shifted, and the vendors who had built the show found themselves becoming less central to it.

Another example - and this is true of a lot of shows - is that to increase attendance, they leaned into exhibitors that offered discounted goods. Attendance numbers improved, but the buyers who arrived were shopping for price, not building supplier relationships. The economic profile of the floor changed, and core exhibitors felt it immediately.

Education, experiences, and events were added to create excitement and energy. Rooms may have been filled and schedules may have seemed busy, but the content and timing were not always designed with exhibitor outcomes in mind. Less qualified buyers showed up for the experiences and education. People were pulled off the floor during times when buying conversations should have been happening. There was a lot of action, but not enough exhibitor value.

None of these choices were irrational. Each one made sense on its own. But trade shows are not collections of independent decisions. They are systems. And systems respond to incentives, not intentions.

And that’s why trade shows are a great analogy for the point I’m trying to make: this is not just a trade show problem. It’s a marketing problem.

The same pattern shows up in product businesses all the time. When companies design everything through the lens of their immediate buyer, say a retailer or distributor, without deeply understanding the end consumer, they produce products or services that seem promising, but they don’t sell. They meet specifications, but don’t generate desire.

When companies design everything through the lens of the end consumer, without understanding the retailer or distributor, they produce offerings that are hard to stock, hard to explain, hard to price, or hard to support. The product may be compelling in theory, but it fails in the distribution channel.

This is the central challenge of B2B businesses. You are not serving two markets independently. You are serving one market through the lens of the other.

Direct-to-consumer businesses do not face this particular tension. Their challenge is different. They design for one customer, one decision maker, one set of expectations. B2B requires balance. Positioning, pricing, packaging, education, logistics, marketing, and delivery all have to work for multiple parties who do not share the same incentives.

Trade shows simply make that balancing act impossible to ignore.

It is tempting to blame the pandemic for the struggles many trade shows experienced. The disruption was real, and the impact was significant. But the pandemic did not create the problem, because trade shows were already suffering in the years before 2020. Sure, the pandemic removed momentum and stripped away habit and routine. And when that happened, many shows were forced to confront a question they had not answered clearly in a long time. 

Who is this show actually for?

When that question is not answered, everything downstream becomes guesswork. Marketing messages lose their impact, education offerings lose coherence, and the exhibitor mix becomes unfocused. The result may be loss of attendance, or it can be the wrong attendance. Either way, the show loses value.

Rebuilding a trade show in this environment is not about adding more: more categories, more events, more excitement. The only way to rebuild is to go back to the original value proposition: What do our primary customers (the exhibitors) need, and how do we deliver that? 

Who should be on the floor? Why should they be there? What kind of business does the show exist to support? And what does not belong, even if it looks like traffic or fun?

A trade show is a temporary city. It has infrastructure, governance, traffic patterns, neighborhoods, and gathering places. The purpose of the show determines who the inhabitants of the city should be. Marketing does the work of attracting those inhabitants, while design and messaging communicate valueand valuesand help avoid identity creep. Sales finds the right people to open the shops. Education provides the knowledge necessary for community prosperity. Events and activations aren’t just for fun - they also influence traffic flow. And both education and events help reinforce a sense of community. 

When those elements are designed through the primary customer’s lens, the city works because it feels intentional. Exhibitors do business, attendees feel their time was well spent, and everyone gains monetary and network value.

When those elements are not designed through the primary customer’s lens, the city still exists. But the people who fund it slowly decide not to return.

Good marketing, whether for a trade show or a business, does not chase attention for its own sake. It attracts the right attention. It focuses on relevance and fit to deliver results. Good marketing is not performative. It doesn’t create activity to look hip or feel busy. It creates alignment so the right things can happen.

Trade shows make this visible because everything happens at once. But the lesson applies far beyond the show floor. When you design products, services or experiences through the wrong lens, growth might still happen, but it will happen in a way that eventually undermines the system supporting it, causing traffic to stall, margins to decrease, or leading to a shift in customers that ultimately aren’t the right ones and can’t support long-term health.

When you design through the right lens, you build something that is more resilient and far more likely to compound over time.

Trade shows, at their best, are not just marketplaces. They are reflections of how well an industry understands itself. And when they are rebuilt with clarity and intent, they can once again do what they were always meant to do. Bring the right people together, for the right reasons, in a way that creates value long after the city disappears.

Every couple of years, McKinsey does one of these surveys where they ask big investors (the kind managing billion-dollar portfolios) what makes a company attractive. And every time, the answers reveal more about the state of business than just “what investors are looking for.” They tell us where business owners and executives should be aiming their attention.

What Investors Are Looking For: EBITDA

This year’s survey (August 2025) put financial performance right back at the top of the priority list. Specifically, EBITDA — earnings before interest, taxes, depreciation, and amortization. Thirty-one percent of the investors said it was their primary lens for deciding whether a business is worth their attention. If you’ve been in the trenches of a small or midsize business for any amount of time, you know that EBITDA isn’t some fancy Wall Street metric. It’s the clearest way of showing whether your operations actually make money once you back out the tax math and other things accountants add in. EBITA is how you can see what your business actually earns.

In a world that is buzzing non-stop about AI, the loudest message from investors is still, “show me the profit engine.” Not just the profit … but how you’ve engineered your company to continue earning that profit. And that’s a reminder small businesses can use. AI might get you in the conversation, but healthy cash flow is what keeps you in the game.

Competitive Advantage Still Matters, But...

In this survey, competitive advantage came in second place. About 19 percent of investors said they look for businesses that have carved out and defended their market position. Interestingly, that number has dropped since McKinsey’s last survey. Which tells me that in an environment of inflation, volatile interest rates, and an uncertain economy, the big-money people are less impressed by differentiation for its own sake. They want evidence that your advantage translates into consistent financial performance, not just a clever story about why you’re different.

That doesn’t mean competitive advantage is dead—competitive advantage always matters. It means you have to prove your advantage works. It’s insufficient to say “our product is unique” or “our service is unmatched.” You have to show how that uniqueness translates into higher retention, repeat buying, or better margins. If your competitive advantage claims are just confetti and canned applause, investors, bankers, and your own customers will see it for what it is.

Don't Underestimate the Value of Leadership

The third most important factor in the surve is leadership. This is one area where small and midsize businesses often underestimate themselves. Investors don’t just look at whether the numbers are good; they look at whether the leadership team is aligned in what it says to investors, employees, and customers. When leaders send mixed signals about mission, culture, or strategy, it’s a big red flag.

I wish everyone understood that this is just as true outside the investor world. Customers pick up on misaligned leadership. So do employees. Even your supply chain partners can sense it. Alignment isn’t about everyone repeating the same slogans. It’s about clarity of intention, how well what you say lines up with what you do, and whether or not every decision points in the same direction.

Which brings us to something McKinsey highlighted that I think is useful far beyond the investor space: the equity story. Investors want a narrative that ties together your financial performance, your competitive position, and your long-term vision. They want consistency across every touchpoint, whether it’s a quarterly report, a pitch deck, or a just conversation over coffee.

Should SMBs Care What Investors Are Looking For?

Of course, most SMBs aren’t pitching billion-dollar investors. So why does this matter? Well, your equity story is still incredibly important. It’s just that your audience might be a bank, a prospective customer, or the people you’re trying to recruit. Your equity story isn’t just about ambition; it’s about showing who you are, what you do that makes you different, why you matter, how you’re planning to grow, and how your numbers and strategy fit together.

What About AI?

In case you’re wondering, AI showed up in the survey results too. Thirty-one percent of investors said AI or technology utilization was part of what they’re looking for. But that’s an important sentence. “AI or technology utilization.” That’s a huge jump from just two years ago, when it wasn’t even on the list. But it’s also not the hype-y demand for AI at all costs. Still, it’s important. If a third of investors now expect AI as part of the baseline, then “we use AI” isn’t a differentiator anymore — it’s table stakes. But the real question is if you’ve implemented AI in ways that actually change your economics or your customer value.

So if I were to boil this survey down into guidance for small and midsize business leaders, it’s this:

• Get your financial house in order and know how to talk about it in plain terms.
• Show that your competitive advantage creates tangible outcomes, and that it’s not just a good slogan.
• Keep your leadership team aligned and clear, because consistency builds trust way faster than charisma.
• Build your equity story like your future depends on it, because it does.
• And if you’re touting AI, be ready to explain how it changes the game for you. If it’s just a box that you’ve checked, that’s going to be obvious.

The investors may have been talking about billion-dollar portfolios, but these lessons cut straight to the heart of what keeps a business attractive at any size. And that’s in every business’s interest.