Show me the Value
James Carter
Leadership & Culture ?? Field CTO @ Team Covalence ?? Developing cohesive and effective teams at scale
It’s all about the money
When people say value these days, they often mean money. Money has been a hugely important concept in the development of our existence, allowing people to transact and work together even when they don’t know and haven’t met each other, enabling a global economy. But money is made up. It is an abstract, social construct, which enables an element of trust between different people and is our most popular proxy for value, but this relies on everyone believing that this dollar, pound, or yuan has a certain value, and this value changes over time. Granted, there are notes and coins still in circulation, but even before we started just waving our phones instead of wallets, 90% of the currency in the world didn’t even have physical form. It is just represented by 1s and 0s in computers.?
Yet we so often use money as the de facto barometer for most decisions we make.
Except when it’s not
In reality, value is much more fundamental, variable and nuanced than paper in your pocket or numbers on your bank statement. If people and organisations were to make decisions based solely on financial value, we could end up in a very unfortunate position.
Remember, “all models are wrong, but some are useful” (George Box), and here is a useful model for value you can use or adapt when thinking, discussing and making decisions in a business context:
Business Value Model (BVM)
1. Financial Value: This dimension focuses on the monetary aspects, including revenue growth, cost reduction, profitability, and overall financial health. It's the most tangible form of value and includes aspects like cash flow, capital expenditure, and financial returns.
2. Operational Value: Emphasises efficiency, productivity, and effectiveness in business processes. It includes lean operations, supply chain management, and the optimisation of resources to achieve maximum output with minimal waste.
3. Customer Value: Centres on the value delivered to customers, including product quality, customer service, brand perception, and overall customer satisfaction and loyalty. This dimension is crucial for market differentiation and long-term success.
4. Employee Value: Focuses on the value that the organisation provides to its employees, encompassing job satisfaction, career development, work-life balance, and a positive corporate culture. This value dimension is vital for attracting, retaining, and motivating talent.
5. Intellectual Value: Encompasses the non-tangible assets that drive innovation and competitive advantage, such as intellectual property, proprietary technologies, brand equity, and organisational knowledge. It highlights the importance of continuous learning and innovation.
6. Social and Environmental Value: Reflects the organisation's impact on society and the environment. It includes corporate social responsibility (CSR) initiatives, sustainability practices, ethical sourcing, and community engagement. This dimension is increasingly important to stakeholders and can influence reputation and brand loyalty, as well as the more obvious value for society as a whole.
7. Strategic Value: Pertains to the long-term vision and positioning of the organisation in the marketplace. It involves strategic planning, market expansion, partnerships, and the ability to adapt to changing market conditions. This dimension ensures the organisation's growth and sustainability over time.
Using a model like this, even subconsciously, can really transform how you think about tasks in your organisation, and make decisions that will drive all these types of value in the right direction.
The same applies more widely to your life. When considering value and decisions in a personal context or perspective, you may choose to use a model like Maslow’s hierarchy of needs (physiological needs, safety, love and belonging, esteem, and self-actualisation), or you could use or adapt a model like this for your thinking and decisions:
Personal Value Model (PVM)
1. Physical Health: The importance of maintaining physical well-being through regular exercise, a balanced diet, preventative healthcare, and managing physical health conditions. Physical health is foundational to personal value as it directly impacts one's ability to engage in various activities.
2. Emotional Well-being: Emotional health involves managing and understanding feelings, stress, and mental health conditions. It includes practices like mindfulness, and social support networks to ensure resilience and emotional balance.
3. Social Connections: The value of meaningful relationships and a supportive social network, including family, friends, colleagues, and community. Social connections are crucial for emotional support, personal growth, and a sense of belonging.
4. Professional and Personal Achievement: The pursuit of goals and aspirations in both professional and personal contexts. This includes career advancement, personal projects, hobbies, and any form of achievement that brings a sense of accomplishment and fulfilment.
5. Financial Stability: The ability to manage financial resources effectively, ensuring security and the means to pursue personal goals. This dimension includes income, savings, investments, and financial planning.
6. Growth: The continuous pursuit of knowledge, skills, and creative expression. This dimension values lifelong learning, curiosity, and the development of intellectual and other capabilities through education, reading, and engaging in stimulating activities.
7. Spiritual Fulfilment: The pursuit of purpose, meaning, and connection to something greater than oneself. This dimension can involve meditation, nature, art, or any practice that provides a sense of inner peace and perspective. Previously dominated by religious faith, but it is now increasingly focused on creating impact and leaving a legacy.
Considering value using a framework like this can help you evaluate how you spend your time, and how to make decisions and plan changes to how you might live in the future.
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It is also easy to see when exploring these two models how things get complicated in a business context where Employee Value is neglected, while the organisation is composed of people with (at least) these 7 needs. Everyone has a different PVM, but creating a clear and consistent shared BVM to use can alleviate some of this complexity and help to align people on the outcomes.
Articulating value to others
When you are clear how you see the value of things, it becomes much easier to communicate it to others. This is critical for getting others to understand, support and become involved in what you want them to.?
In addition, it really helps to know and understand the other person you are communicating to.?
We all value things differently, based on our values, beliefs, needs and situation. On a Total Recall style dystopian Mars, the most valuable commodity is air. Assuming people have air in abundance, water comes next, then food. After that, it’s pretty much open to people’s different tastes. Some people are hugely motivated by money, wealth, and things that symbolise status, others far less so.?
People are motivated by very different things. Some thrive on recognition, some on learning and personal growth. Some people are driven by corporate prestige or financial compensation, and some just want to create an impact. There is variation even in this, as the impact they want to create is aligned with their values, which can be very different to someone who wants to create impact in another way. When delegating a task, you significantly increase the chance of it being done by articulating value in a way that resonates with the other person, and the chance of them doing it well significantly increases if they understand the value it is intended to create.
Value, workload and waste
A massive proportion of what people do at work can have little to no value. Meetings can have negligible value. Without a focus on value, people frequently prioritise tasks with low value while seemingly oblivious to the high value related tasks that are tapping their feet, or shaking their heads in disbelief.
Considering the value in your tasks, meetings and actions can help you reduce this waste, and encourage others to do the same. Make sure you consider value more widely than just financial when doing so. Testing creates risk reduction which can be expressed in both customer and operational value. Automation can create significant operational value. A meeting to develop relationships can have huge inherent value to the people involved, and the organisation more widely.
Value in decision making
Considering value from different dimensions is critical when making strategic decisions.
I have orchestrated some fairly complex vendor selection activities for a range of different services, organisations and situations, and a value focus is critical to designing the process and in making the decisions.?
These exercises can frequently become very process driven, competitive, locked down and all too often become a ‘race to the bottom’, driven by the buyer’s power position and using established procurement methods to pit the options against each other and negotiate the lowest possible ‘price’ (yep, we are back to money again). This can become a very high price to pay for the unlucky winner and for the customer, where the winning bidder now has to optimise to try and protect and maintain the low margin they have from this deal, and the customer can often get very poor service as a result. A lot of this is down to the damage done to the relationship between the organisations and the people involved through the process.
The most successful vendor selections I have been involved in focused on considering many dimensions of value when evaluating the different options, to select the most appropriate from all aspects of value. Above functionality match and cost, what operational value does this help (or hinder)? How does this impact customer and employee value? How does it relate to or enable how we see our strategic value? These successful examples also placed high importance on the relationship value; creating a positive and healthy relationship between buyer and seller, so the relationship is built through and alongside the deal, not salvaged from the wreckage.
A fundamental foundation for effective leadership
As you can see, identifying, understanding and articulating value is a critical aspect of leadership effectiveness, and it sits in the first layer of our leadership model. Most leaders use this capability implicitly; subconsciously identifying value and using it to communicate, influence and make decisions. Still, it is useful to regularly reflect on your models for value, bring them to conscious attention, and check how they might be adapted in the future to make you more effective as a leader.
Some questions you can use to reflect on how you identify, articulate and create value are:
Money is useful, but show me the Value.
This content by James Carter is licensed under CC BY 4.0
Data Architect
5 个月An interesting insight here. I think often value is taken as something that is of immediate benefit. For an individual that might be a pay rise or promotion, for an organisation that might be new features in a product or a sale. The greatest value is often built over time and with continual effort, and the payback is not immediate but is gradual. For an individual that could be gaining the skills and experience to excel in a career, for an organisation that could be gaining a position of recognition and trust among clients.