ERRC Grid: The Four Actions Framework skill

ERRC Grid: The Four Actions Framework

The Eliminate-Reduce-Raise-Create (ERRC) grid is the operational tool that translates blue ocean thinking into concrete strategic actions. It forces companies to pursue differentiation and low cost simultaneously by asking four questions that challenge industry logic. This reference provides a complete guide to facilitating, applying, and validating ERRC decisions.

Table of Contents

1. The Four Actions
2. ERRC Grid Template
3. Detailed Questions for Each Action
4. Industry Examples of ERRC Applied
5. Step-by-Step ERRC Workshop Facilitation Guide
6. Validating ERRC Decisions
7. From ERRC to Execution: Action Planning Template
8. Common ERRC Mistakes

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The Four Actions

Eliminate

Core question: Which factors that the industry has long competed on should be eliminated entirely?

These are factors the industry takes for granted but that add cost without proportional value to buyers. Elimination is the most powerful action because it simultaneously reduces cost and simplifies the offering.

How to identify elimination candidates:

• Factors that exist because "we have always done it this way"
• Features that only a small minority of buyers use
• Factors that exist because competitors have them, not because buyers need them
• Compliance with industry norms that buyers do not care about
• Legacy features that served past needs but are now irrelevant

Warning signs that a factor should be eliminated:

• Removing it in a test does not generate complaints
• Buyers do not mention it when describing why they buy
• It requires significant cost but does not appear in purchase criteria
• Non-customers cite it as a reason they avoid the industry

Reduce

Core question: Which factors should be reduced well below the industry standard?

These are factors where the industry over-delivers relative to what buyers actually need. Reduction captures the insight that "good enough" on certain dimensions frees resources for factors that matter more.

How to identify reduction candidates:

• Factors where diminishing returns have set in
• Areas where the industry standard exceeds what most buyers need
• Features that increase complexity without proportional utility
• Factors that drive cost but where buyers would accept a lower level

The reduction test: If you reduced this factor by 50%, would most buyers notice? Would they care enough to switch to a competitor?

Raise

Core question: Which factors should be raised well above the industry standard?

These are factors where the industry currently under-delivers relative to buyer expectations or latent needs. Raising them creates differentiation that buyers immediately value.

How to identify raise candidates:

• Factors where customer complaints are persistent
• Dimensions where alternatives from other industries outperform your industry
• Areas where buyers have developed workarounds because the industry standard is not good enough
• Factors that correlate most strongly with buyer satisfaction and loyalty

Create

Core question: Which factors should be created that the industry has never offered?

These are entirely new sources of value that redefine what the offering means. Creation is what opens new demand and attracts non-customers.

How to identify creation opportunities:

• Pain points in the buyer experience cycle that no one addresses
• Needs currently served by complementary products or services
• Desires expressed by non-customers that the industry does not serve
• Capabilities enabled by new technology that the industry has not applied
• Emotional or social needs in a functionally-oriented industry (or vice versa)

ERRC Grid Template

Use this template to document and communicate ERRC decisions.

+----------------------------------+----------------------------------+
|           ELIMINATE              |             RAISE                |
|                                  |                                  |
| 1. ________________________     | 1. ________________________     |
|    Why: ____________________    |    To what level: ____________   |
|    Cost saved: _____________    |    Investment needed: ________   |
|                                  |                                  |
| 2. ________________________     | 2. ________________________     |
|    Why: ____________________    |    To what level: ____________   |
|    Cost saved: _____________    |    Investment needed: ________   |
|                                  |                                  |
| 3. ________________________     | 3. ________________________     |
|    Why: ____________________    |    To what level: ____________   |
|    Cost saved: _____________    |    Investment needed: ________   |
|                                  |                                  |
+----------------------------------+----------------------------------+
|           REDUCE                |             CREATE               |
|                                  |                                  |
| 1. ________________________     | 1. ________________________     |
|    From/To: ________________    |    What it enables: __________   |
|    Cost saved: _____________    |    Investment needed: ________   |
|                                  |                                  |
| 2. ________________________     | 2. ________________________     |
|    From/To: ________________    |    What it enables: __________   |
|    Cost saved: _____________    |    Investment needed: ________   |
|                                  |                                  |
| 3. ________________________     | 3. ________________________     |
|    From/To: ________________    |    What it enables: __________   |
|    Cost saved: _____________    |    Investment needed: ________   |
|                                  |                                  |
+----------------------------------+----------------------------------+

NET COST IMPACT: _____________
NET VALUE IMPACT: _____________
VALUE INNOVATION? (cost down + value up): YES / NO

Detailed Questions for Each Action

Eliminate Deep-Dive Questions

1. What do we offer because competitors offer it, not because buyers need it?
2. What would happen if we stopped doing this tomorrow?
3. Which features have usage rates below 10%?
4. What costs us the most but appears nowhere in buyer decision criteria?
5. Which factors exist to serve a small segment that we could choose not to serve?
6. What industry traditions or norms would a new entrant from outside the industry find absurd?
7. What do non-customers find unappealing or unnecessary about our industry?

Reduce Deep-Dive Questions

1. Where do we exceed what 80% of buyers need?
2. Which specifications could we cut in half without meaningful impact?
3. Where has the industry engaged in an escalation war that buyers did not ask for?
4. What premium features do most customers pay for but rarely use?
5. Which support or service levels could be simplified?
6. Where is "good enough" genuinely good enough for the target mass market?

Raise Deep-Dive Questions

1. Where do buyers consistently express frustration with the industry standard?
2. Which factors do alternatives from other industries handle better?
3. Where have buyers created workarounds because the current standard is inadequate?
4. What would it take to move customer satisfaction from 3/5 to 5/5 on key factors?
5. Which factor, if raised dramatically, would attract non-customers?
6. Where is the gap between what buyers expect and what the industry delivers widest?

Create Deep-Dive Questions

1. What job is the buyer trying to accomplish before, during, and after using our product?
2. What complementary products or services do buyers currently need alongside ours?
3. What would make non-customers consider our industry for the first time?
4. What emotional or social needs are unmet by the industry's functional focus (or vice versa)?
5. What would buyers design if they could start from scratch?
6. What trends will reshape buyer expectations in the next 3-5 years?
7. What pain points exist in the buyer experience cycle that no one addresses?

Industry Examples of ERRC Applied

Technology: Zoom (Video Conferencing)

Eliminate	Reduce	Raise	Create
Hardware requirements (dedicated systems)	Feature complexity for basic use	Audio/video reliability	One-click join (no account needed for guests)
Enterprise-only sales model	Per-minute pricing	Meeting capacity (free tier: 100 people)	Gallery view (see everyone at once)
Complex setup/IT deployment	Configuration options	Cross-platform compatibility	Virtual backgrounds
			Breakout rooms at scale

Result: Zoom did not invent video conferencing. It made it work reliably and removed every friction point, unlocking demand from education, social users, and small businesses who had never used video conferencing before.

Retail: IKEA (Furniture)

Eliminate	Reduce	Raise	Create
Sales assistance on the floor	Material quality (functional, not luxury)	Design quality (Scandinavian aesthetic)	Self-service warehouse shopping
Home delivery (customer transports)	Furniture longevity (designed for life stages)	Range of home products	Flat-pack self-assembly
Assembled furniture		In-store experience	Restaurant inside the store
		Affordability	Room display showrooms
			Online planning tools

Result: IKEA serves customers who would otherwise buy cheap, poorly designed furniture or delay purchasing entirely. The self-assembly trade-off (a reduction in convenience) funds the raising of design quality and the creation of an inspiring shopping experience.

Healthcare: MinuteClinic (Walk-In Clinics)

Eliminate	Reduce	Raise	Create
Appointments	Range of services (only common conditions)	Convenience (walk-in, no wait scheduling)	Retail location (inside CVS/pharmacy)
Doctor requirement (nurse practitioners)	Wait time for simple issues	Transparent pricing	Electronic health records integration
Full diagnostic workup		Extended hours (evenings, weekends)	Immediate prescription fulfillment (same pharmacy)
Insurance complexity for simple visits			Online check-in and wait time visibility

Result: MinuteClinic did not compete with hospitals or primary care physicians. It served people who would otherwise skip treatment for minor issues because the traditional healthcare system was too slow, expensive, or inconvenient.

Education: Khan Academy (Online Learning)

Eliminate	Reduce	Raise	Create
Tuition fees	In-person instruction	Accessibility (free, global)	Mastery-based progression
Fixed schedule	Textbook dependence	Practice exercises per concept	Personalized learning dashboard
Geographic limitation		Pace flexibility (pause, rewind, repeat)	Teacher/parent monitoring tools
Age/grade restrictions		Content breadth	Gamification (badges, streaks)
Enrollment barriers			Adaptive difficulty

Result: Khan Academy attracted millions of learners who could not access or afford traditional tutoring, as well as students whose in-school learning was insufficient. The elimination of tuition, schedule, and geographic barriers unlocked massive latent demand.

Step-by-Step ERRC Workshop Facilitation Guide

Preparation (1 week before)

1. Complete the strategy canvas exercise first (the ERRC grid builds on canvas insights)
2. Gather customer data: satisfaction surveys, NPS comments, support tickets, churn reasons
3. Gather non-customer data: interviews or surveys about why people avoid the industry
4. Prepare printed ERRC grid templates (one per participant plus extras)
5. Invite 8-12 cross-functional participants

Workshop Agenda (3.5 hours)

Part 1: Context Setting (30 minutes)

Time	Activity
0:00	Review the strategy canvas from previous workshop
0:10	Share customer and non-customer data highlights
0:20	Introduce the ERRC framework and rules

Rules to establish:

• No factor is sacred (everything is a candidate for elimination)
• Every "raise" or "create" must be funded by an "eliminate" or "reduce"
• Think from the buyer's perspective, not internal perspective
• Non-customers matter more than existing customers for this exercise

Part 2: Individual ERRC Brainstorming (30 minutes)

Each participant fills out their own ERRC grid silently. This prevents groupthink and ensures diverse perspectives.

Part 3: Share and Cluster (45 minutes)

Time	Activity
1:00	Each person shares their top 2 items per quadrant
1:15	Facilitator clusters similar ideas on whiteboard
1:30	Group discusses and debates each cluster
1:45	Vote on top 3 items per quadrant

Part 4: Break (15 minutes)

Part 5: Deepen and Validate (45 minutes)

For each selected ERRC action, the group works through:

Question	Purpose
What is the specific cost impact?	Quantify elimination/reduction savings
What is the specific value impact?	Quantify raise/create value to buyers
What evidence supports this?	Ground decisions in data, not assumptions
What is the risk if we are wrong?	Identify reversible vs. irreversible decisions
How would competitors respond?	Assess defensibility

Part 6: Draw the New Value Curve (30 minutes)

Using the finalized ERRC grid, draw the proposed value curve on the strategy canvas. Compare it to the current industry curves.

Validation checks:

• Is the curve divergent from competitors?
• Is it focused (not trying to be high on everything)?
• Can you articulate it in one sentence (compelling tagline)?

Part 7: Action Planning (15 minutes)

For each ERRC decision, assign:

• Owner
• Timeline
• Dependencies
• Success metric

Validating ERRC Decisions

Before committing to ERRC actions, validate each decision against these criteria.

Elimination Validation

Check	Pass?
Fewer than 20% of target buyers actively use this factor
Removing it does not create legal/safety/compliance risk
The cost savings are quantifiable and significant
Non-customers would not be deterred by its absence
A small test (removing the factor for a subset) confirms low impact

Reduction Validation

Check	Pass?
The reduced level still meets the needs of 80%+ of target buyers
The cost savings from reduction are meaningful
Competitors' over-investment in this factor is not what buyers love about them
The reduction does not harm the factors you are raising

Raise Validation

Check	Pass?
Buyers cite this factor as a pain point or unmet need
The investment is funded by elimination/reduction savings
Raising this factor would attract non-customers
You can sustainably deliver at this raised level

Create Validation

Check	Pass?
No competitor currently offers this
Non-customers have expressed this need (directly or indirectly)
The creation is feasible at the target cost structure
It integrates with the raised factors to form a coherent offering
First-time buyers would understand its value quickly

From ERRC to Execution: Action Planning Template

For each ERRC action, complete this planning template.

ERRC Action: [Eliminate/Reduce/Raise/Create] [Factor Name]
--------------------------------------------------------------
Current State: ____________________________________________
Target State: _____________________________________________
Timeline: ________________________________________________
Owner: ___________________________________________________

Cost Impact:
  - One-time cost/savings: $_______
  - Recurring annual impact: $_______

Value Impact:
  - Which buyer segment benefits most: __________________
  - How will we measure the impact: ____________________

Dependencies:
  - Internal: ___________________________________________
  - External: ___________________________________________

Risks:
  - What could go wrong: ________________________________
  - Mitigation: _________________________________________

Success Criteria:
  - We will know this worked when: ______________________
  - We will revisit if: __________________________________

Common ERRC Mistakes

Mistake 1: Eliminating What Customers Secretly Value

Some factors appear unimportant in surveys but drive emotional attachment. Test elimination with a small cohort before full commitment.

Example: A restaurant eliminates table cloths to reduce costs. Surveys never mentioned table cloths, but customers report the restaurant "feels cheaper" after the change.

Fix: Run small experiments. Observe behavior, not just survey responses.

Mistake 2: Creating Without Demand Validation

Teams get excited about novel features that sound innovative but address no real buyer need. Every "create" should map to a documented pain point or non-customer barrier.

Example: A software company creates an AI feature because competitors are adding AI, not because users have a problem the AI solves.

Fix: Every create must answer: "Which specific non-customer barrier or buyer pain point does this address?"

Mistake 3: Raising Everything, Eliminating Nothing

This is the most common mistake. Teams are willing to add but reluctant to subtract. The result is a "more for more" strategy that is not value innovation.

Fix: Enforce a strict rule: the number of eliminate + reduce items must equal or exceed the number of raise + create items.

Mistake 4: Treating ERRC as a One-Time Exercise

Markets evolve. What you eliminate today may become important tomorrow. What you create today may become table stakes.

Fix: Revisit the ERRC grid quarterly. Update the strategy canvas annually.

Mistake 5: Ignoring Internal Resistance

Eliminating factors that employees have built their careers around creates organizational resistance. The ERRC grid is a strategic tool, but implementation requires change management.

Fix: Involve affected teams in the ERRC workshop. Use fair process (engagement, explanation, expectation clarity) to build buy-in.

Mistake 6: Confusing Reduce with Eliminate

Reduction means still offering the factor, but at a lower level. Elimination means removing it entirely. The strategic and cost implications are different. Be deliberate about which action you are taking.

Fix: For each factor under consideration, explicitly ask: "Should we offer this at a lower level, or remove it completely?" The answer depends on whether any portion of the target market needs it.