The Blue Line Imperative: On creating value for a business organization

Book Reviewed: The Blue Line Imperative - What Managing for Value Really Means, by S. David Young

This book offers a unique perspective on what value means for a customer and the business that offers a product or service. Value creation from the point of a customer is based on happiness that results from using a product or a service. The businesses were created to bring that happiness to their customers by delivering products and services. For this logic to balance; happiness must reside on both the sides of the equation. Customers get the services/products they desired, and the businesses delivered them to customers with sufficient ground work on their part so that they continue to offer that service and products, and also get good returns on their investments so that they can stay afloat. This is an ideal equation where both sides are kept happy. The principal goal is to allocate economic energy to pursuits where the expected returns will compensate for the opportunity cost of using that energy. According to the author, doing so leads to survival for the business, and not doing so will lead to death. The author calls the former line of thinking as blue line imperative and the latter is called red line thinking. The blue line thinking expects the manager to think up, down and across the organization.

There are three pillars of blue line imperative; fairness, trust and learning, which helps a business to survive and be successful in the long run. Some companies like Google and AT&T emphasize blue line imperative in their goal statements; Google's mission underscores value for the customer and fairness to all. Similar goal is used by AT&T which emphasizes offering the best customer experience and satisfaction. This is an interesting book which uses economics/finance concepts to illustrate some key points. Highly recommended to anyone interested in economics/finance/accounting or management.