Getting to grips with Value
Getting to grips with Value
Before you can create it, you must first understand it
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Edition 1 and we’re starting off with a bang! Well more accurately, we’re starting with the fundamentals.
Value has been a hot button topic since buying and selling has been a thing; it’s everywhere in the world around us. But what even is Value, and why is this a quality we’re so preoccupied with?
Value is a reasonably simple concept on the surface, but can be tricky to nail down in practice especially within enterprise operations. In my work, I came to understand that there’s 4 Principles of Value at work within Value creation.
Principle 1: Value = providing an offering that is meaningful to a client or stakeholder
On a conceptual level, we all understand what value is: a Mercedes Benz is an item of high value, a buy one get one free deal provides value.
The underlying thing in all those examples is that in an exchange for those things, you get more that what you give (quantitatively or by meaningfulness) and you come out of that exchange feeling good.
And that’s the first solid definition, and principle of Value:
Value means doing something or providing an offering, your offering, to a client or stakeholder in a way that is meaningful to them (in a way that meets their Value needs).
I’ll chat more about discovering and considering the Value needs of clients and stakeholders in an upcoming newsletter, so keep an eye out for that!
Principle 2: Value goes beyond what your offering is
If you’ve ever had an experience where you were buying something pricy or otherwise finicky to deal with, but the experience of buying or engaging the product/service was so good that you bought it again, then you’ve experienced the second principle of Value in practice.
Simply,
value goes beyond what your offering is.
It's a holistic concept and can encompass any additional points at which you interact with your client or stakeholder, going beyond them buying or engaging your offering.
Now these next two principles account for why delivering value more challenging than these concepts, and why there seems to be so much complexity within Value Creation!
Principle 3: Value is contextual, and context brings different understandings and applications of Value
A major determinant of Value is who you are talking to when you talk about that value, and their context.
For an example, in enterprise operations the marketing, sales, and ops managers, and the client, all have differing understandings of the approach to value, even if they’re all talking about the same offering or operate in the same environment. Which is perfectly fine.
The challenge comes in is when the managers now have to start strategizing on creating value on an organizational level: the challenge is accounting for all these contexts and harmonising (or at the very least working with them) when they develop their value creation strategy.
And thus the third principle of Value is:
different contexts bring about different understandings of value and different attitudes to value, which is what adds complexity.
Principle 4: Value is subjective, and that subjectivity should be accounted for
Lastly: there will always be an element of personal perspective to value.
Meaning, if you grab 2 finance divisional managers in the same national group, their approach to value may be similar because they’re both finance managers, but their personal expertise will always weigh in on their understanding of value and how to create it.
And that’s the fourth and final principle of value:
value has a subjective component to it, and it should be accounted for in your Value definition and creation exercises
And that does it for this week’s Blueprint!
Is Value and Value creation looking the sliiightest bit less murky? Or maybe more overwhelming? (hopefully not!)
Tell me more in the comments, drop me a line on LinkedIn, or if you received this an email, send me a reply!