As a consultant in value creation, I am watching the disability services sector with much interest.

My entrepreneurial side loves new marketplaces. When a new marketplace opens up they are, by definition, very inefficient. Potential customers are still learning about the value different suppliers offer and suppliers are still learning about their customers’ needs. However, for a switched-on operator, new marketplaces offer lots of opportunities to add value, and your ability to create value is what dictates your eventual level of success. As a marketplace matures over time, it becomes more efficient and there are fewer opportunities to greatly increase the value that is being provided for customers.

What is interesting in the disability sector is not that there is new marketplace per se. It is that the disability sector is a mature marketplace which has historically been built up around a customer which is no longer the customer.

In business, the customer is always the person who controls the money. They are the person who decides whether they will buy from you or not.

In the disability sector, until now, the “customer” has been the government. Service providers are well aware of what it takes to satisfy this customer and have built their organisations around efficiently catering to this customer’s demands.

The challenge is that the government is no longer your customer. The customer is now the end client.



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If you are an existing service provider you have a problem. You may be able to exist in your current form for a period, but you are walking on water. What previously held you afloat can no longer be counted on to hold you afloat.

There are players who are currently looking at how they can create unprecedented value in the marketplace. A level of value which will transform their services. For the record, unprecedented value is never simply creating a similar service at a lower cost. The cost is never the most important factor. Unprecedented value comes from a breakthrough capacity to meet the customers’ needs.

From a business perspective, the next few years in the disability sector are going to be very interesting.

Here are my predictions for how the future will play out.

 

Stage 1:

Services will carry on as usual. Participants will not immediately realise that they now hold the power in the transaction and, even if they do realise, their choices are limited by existing suppliers. Suppliers of services will continue to operate as normal. New players will enter the marketplace however they will not yet have the capability to offer great value over the existing players.

This stage will run for 1-3 years

 

Stage 2: 

At some point a player will find a way to create unprecedented value for Participants. None of us know what that value is right now.

Participants will quickly realise that their existing service providers are no longer providing value compared to the disruptive player and customers and staff will begin to flock to the disruptor.

Some of the small dynamic players may be able to follow the disruptors lead. Some will not and will go out of business.

Many of the large players will no longer be able to provide value in the new marketplace and will be severely impacted. They may be able to survive by focusing on core areas where they can provide value.

Some of the existing large players will have set themselves up to look for opportunities to create unprecedented value (or at least to watch for other players creating unprecedented value). It is likely that these one or two players will be able to follow the lead and re-align their business around the new needs of Participants.

This stage will run for 2-5 years.

 

Stage 3

The marketplace will begin to mature around the new customer. 1-2 disruptive players will have taken the lead in creating unprecedented value. 1-2 of the existing large players which have developed a value based mindset will also be competing for the lead. Both the providers and Participants will be clear on their needs and an efficient marketplace will have developed around these needs.

This stage will run for 2-3 years.

One thing is clear. In five to ten years, the disability services sector will not look the way it does right now.  The government and the people who petitioned for the changes do not want the industry to look like it does now. If the industry looks the same, the NDIS will have failed. Changes are coming. The government have bet $22 billion on it.

Your awareness of the distinctions of value creation is probably the key capability which will determine your success over the next 5-10 years. I therefore recommend you ask yourself:

What value are you creating in the sector right now? What value will you be creating in the future?

I hope you have good answers. Your future of your business will depend on it.

 

By Terence Sweeney

Terence is a highly innovative and influential business strategist, he brings an in-depth understanding of value creation to business leaders in the NDIS. He is the author of a leading book on value creation and is an associate member of the Professional Speakers Association of Australia. Terence is available for presentations and strategic consulting work, contact: terence@terencesweeney.com.

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This article was sourced from the website Disability Services Consulting Blog full copy and the original article can be found at Creating value in the new world of the NDIS.

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