Introducing the Valueist

Let me start by asking you to take part in a little thought experiment. Imagine you are the foetus in the image above. You don’t know where you will be born, what sex or colour you will be. You don’t know if your parents are rich or poor, nor what language they speak, beliefs they have or religion they follow.

Now imagine you were born a female in a poor rural community in an underdeveloped nation run by a corrupt regime. Your chances of reaching adulthood are slim. Even then you are very unlikely to live beyond 45 years. You will never get a good education and your days will be spent undertaking hard labour just to sustain yourself and your children.

Then imagine you are born male in a developed country. Your parents are well educated and middle class, but not rich. You have the opportunity to attend a good school and university. You graduate, embark on a career, and eventually becoming a company director. You own your own home, take foreign holidays, and your diet is so good you need time at the gym to keep in shape. 

The thought experiment was not intended to make you feel fortunate, privileged or guilty. My goal was to provide a context in which to introduce the concept Valueism.

When was the last time you considered what you really value? Do you know how, or why, you are valued by others? What do you do to be valued by them?

Does the business or organisation you are a director, manager or employee of have a clear idea how it creates value, and whom it creates value for? And do you know how your role contributes?

Few people can give a clear and positive answer to these questions. Most people, businesses and organisation loose sight of their purpose, which is to create value for themselves and others. They are so busy doing things they forget why they are doing them. Many businesses are so focused on managing costs and making profits they forget why they exist and on what their long-term success depends.

Now imagine you are the parent of the foetus yet to be born. What is your purpose as a parent? What value will you be to the child? Can you risk losing sight of that purpose? Just as we should not lose sight of our purpose when raising a child, we should not lose sight of our purpose in our other roles in life. In all cases, the quality of lives will depend on the value we create – for our customers, patients, employees, suppliers or passengers and ourselves. This applies to businesses and organisation and to all the people associated with them, including the citizens that we all are.

When we use analogies that describe the business as a machine-like system, in order to give ourselves a sense of control, we are deluding ourselves. But to dehumanise business has been the basis of management theory and practice for more than half a century. We talk of value chains that can be re-engineered, automated and fine-tuned. We look to achieve alignment and the re-calibration of the systems. And people are just human resources, assets or capital to be used by the machine in the production process. These analogies are very wrong. Business is run by people, with people, for people. They are a social system, companies of people, not a machine. To pretend otherwise is damaging to all stakeholders including the business.

Every business or organisation exists within the natural, social and economic environments. Recognising this is critically important to its success and to the health and well-being of all stakeholders including society and the planet. It does not only exist in an economic environment as economists who have overlooked what they call the externalities (such as pollution costs) would have us believe. And it cannot remain unaccountable for those things we value beyond that which is material or financial as traditional accounting would have us believe, by ignoring the intangibles. They include many of the things that we would consider absolutely essential to our individual and collective well-being and prosperity.

To flourish or thrive as individuals and societies our needs, wants and hopes must be met. And to meet them we must first understand that they are not only financial or material. They are human and they are intangible. Importantly they are also the drivers of the success of the business and determine its ability to create value in the future.

The good news is that as individuals, businesses or organisations we don't need to wait for a change of economic system. We just need to be more conscious of what we, our customers and societies value. And by creating more value we can "be the change we want to see in the world" as advocated by Gandhi. We can begin the moment we realise this is so.

The other good news is that businesses recognising this are better businesses. They are healthy, sustainable and long-lived businesses that have strong reputations. They have proud owners and attract happy, loyal and productive employees. They recognise that value creation must be the focus and profits are a byproduct. They know that when profits and shareholder value maximisation become the goal a focus on value creation is lost, toxic cultures ensue and the business will have a precarious future.

Valueism asks businesses and organisations to understand how they create value, and for whom. It asks them to create Value Schemes to achieve a congruence of interests within the value ecosystem. It rejects the idea of competing for a share of the value that can be extracted from a value-chain, based on the false assumption that there is a fixed amount to be shared. Instead, it requires us to design a scheme focused on the co-creation of value based on collaborative long-lasting relationships with stakeholders, to generate more value for all parties. It embraces the many facets of value - the tangible and intangible - that are traditionally ignored but are the true drivers of future success.

It may be hard to understand an abstract term like "intangible value". That is the reason for the image of the foetus and the thought experiments. That which we value as humans matters. At a basic level, we can refer to universal human rights or consider that which we might want for our children and future generations.

Yesterday I read that the CEO of a large multi-national corporation stopped his firm using one of the gig-economy delivery service providers because he would not want his son to work for them. Several other people have told me they would discourage their children from working for the firm they are employed by, or in the industry sector the firm operates in, even if they are very well paid. They know what intangible value means.

Previously I have stated that I see Valueism as "the next evolution of capitalism". Above I have outlined the dominant characteristics of the current model and why it is neither sustainable nor in anyone's best interests to try and sustain it.

Capitalism that focuses on value creation, not extraction, is going to be good for all and may help restore trust in a system that has lost its legitimacy. It is human-centred and designed to serve the common good of this and future generations. And I believe it could be as transformational as the industrial revolution, resulting in a step-change in levels of progress, prosperity and human flourishing. It is the way we can ensure that the good life is the experience of all.

"The Good Life" does not need to only exist in the ancient philosophy of Aristotle. By focusing on the creation of what we value, beyond that which is material and financial, we can achieve a good life and we can start today. If you read the last sentence again, you will see it is true for an individual, business, organisation or a society. And we must ensure it is also beneficial to future generations no matter the circumstances into which they are born if we are to respect our universal rights and dignity of all human beings.

The issues described above, and their implications for individuals, businesses, organisations, politics, public policy, economics, finance and accounting etc. will be explored in a quarterly magazine, The Valueist, to be launched soon.

On the 5th June in London, we will also run a half-day seminar. An Introduction to Valueism, how to design a Value Scheme and how to become a Valueist - TICKETS

It is one of three events we are hosting that day. Get details of all three events