What is our theory of Value?

Busy senior managers tend to be uninterested in how results are arrived at, so long as they are delivered. They want to hear about outcomes, about the value achieved. Yet ask a VE guy what he or she does and he or she will describe the job plan, the techniques and tools. We revert to the comfort zone of our proven methodologies. Ask lawyers what they do and they say things like win you a court case, protect you from litigation, and so on. Many professions describe what they do in terms of the results customers are seeking to buy. Results are judged good or bad in terms of the value they produce. Our community, and I extend that to other value societies around the world, tend to talk more about how they do things. We hide the "value" senior managers are continually searching for behind our assumption that “it’s obvious.”

In the UK, a notion of "value" is driving a change program in the Institute of Value Management. Visit its discussion board and see for yourself. There’s even a suggestion they rename themselves the Institute of Value to allow all value producing methodologies a common home in a community whose identity is based on outcome rather than process. If our methods are good, which I firmly believe they are, we should welcome the likes of QFD, Triz, Lean, and so on, with an attitude of self confidence, enquiry underpinning new opportunities, and a desire to reach beyond our capabilities of today. 

I remember listening to Jerry Kaufman explaining the pre-event and pointing out that, as his team were selecting solutions to improve attributes, they were engineering value in the same way a mechanical engineer tries to improve the performance of an engine. Maybe it’s time this central concept of "value" became the focus of a community wide discussion. When a client brings us in, there is an expectation we would lead their thinking to greater "value". Yet where is “our” definition of value that the whole world can agree on? If we could form such a definition, then we could move onto greater ambitions such as benchmarking companies on the value they produce for society through their relationships with innovation, financiers, shareholders, customers, employees, and suppliers. Today this looks like a far off dream.

This issue of Value World wants to put a peg in the ground and mark where we are today with our theories of value. The first paper sets the scene and discusses types of theory associated with concepts of value. Professor Dan Seni moves his thesis towards a notion of “Technical Value”. He argues the work of the value managers in our community is primarily employed to leverage value through the improvement of social and physical technologies. The second paper is my own. Here I try to build on Dan’s paper and show how our techniques of today can be used as a means of moving through an as yet unarticulated theory of value; I wanted to make sure practitioners could connect with our position and get involved in the discussions. However, the focus of this paper is not on technique, but on the relationship between thinking, models which represent the world, and the "real" world itself. The next paper is by Jerry Kaufman and he presents a view of value in terms of the relationship between the customer and the producer trying to sell a service or product. The final paper, by Craig Squires, looks at information as a valuable asset and is included to show how the world of information technology, so underrepresented in VM, has a key role in the way organizations create other types of value.

What we hope to achieve in this edition of Value World is the recognition of a new position and a new conversation. That, ‘"value" exists in a relationship among people, objects, desire, and usefulness that "function;" much more complex than Miles’ view of value equaling function divided by cost. It is because value only exists in a dynamic sense that it has been so elusive to define a unified theory of value we can all agree on. Our hope is that this edition of Value World becomes the feedstock for greater enquiry.

Dr Roy M. Woodhead
VP Education, SAVE International®
Executive member of the IVM
Director of Society of Organisational Learning UK

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