Exploring Value - The Value Scale
Organisations exist to create value. If they don’t they shut down. The chief way organisations create value is to deliver results that are valued by investors and customers.
Understanding value is a complex task. Once we look beyond the superficial, each person and group has a highly personal set of values. For this reason, values cannot be understood using a check list. But we can still understand them in a systematic way.
The Value Scale is what we use for the Value function of the Performance Panel. It is based on how we think about what we value. There are six elements:
Asking these and similar questions will help you to understand what the value is your investors and customers want from you. With this you can identify the niche you build and the role your organisation fills now and into the future.
Understanding value is a complex task. Once we look beyond the superficial, each person and group has a highly personal set of values. For this reason, values cannot be understood using a check list. But we can still understand them in a systematic way.
The Value Scale is what we use for the Value function of the Performance Panel. It is based on how we think about what we value. There are six elements:
- Fairness
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Will the result be fair - fair price, equal access, reasonable quality? Will I be ripped off or treated well?
- Care
-
Do you care about me - customer service, warranty, tailored solutions? What help can I expect or will I be abandoned?
- Liberty
-
Am I free to make my own choices - contract conditions, product plans, compatibility with other products or services? Can this help me do what I want?
- Authority
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Can I be confident in the solution - is it reliable, informed, representative of best practice or legal requirements? Will this build my standing or get me into trouble?
- Group
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Will this enhance my place in society - is it status building, professional credibility, social acceptance? How can this help me belong and be appreciated by my group?
- Integrity
- Is this what it claims to be - can I trust it, is it true, is it high quality? Will I feel honest and proud or rotten and ashamed?
Asking these and similar questions will help you to understand what the value is your investors and customers want from you. With this you can identify the niche you build and the role your organisation fills now and into the future.
What people value will vary between organisations and their stakeholder groups.
We will look briefly at three types of organisation.
A community service organisation may have investors and customers who want the same value, namely a particular community benefit.
Likewise the investors and customers of a financial organisation may seek a similar benefit, namely increased wealth.
For most organisations there will be a difference between the value the investor seeks and what the customer is after. For example, investors in a supermarket might be after a retirement income through their superannuation fund whereas customers want their dinner.
Even in the first two examples, where the investors and customers seek similar values, once their value is explored in detail, they may be very different.
The community service investors want a better suburb but the customer wants a particular problem solved.
The finance investors may want to build a corporate empire whereas their customers may just want to build a home.
It is important to understand the different value outcomes sought by your stakeholders, even when they look similar. This could make all the difference to how well you attract investment or retain customers. As you will see in the Direction function on the panel, one of the strategic concerns is that your stakeholders have substitutes available, other options they can take rather than your products or services.
We will look briefly at three types of organisation.
A community service organisation may have investors and customers who want the same value, namely a particular community benefit.
Likewise the investors and customers of a financial organisation may seek a similar benefit, namely increased wealth.
For most organisations there will be a difference between the value the investor seeks and what the customer is after. For example, investors in a supermarket might be after a retirement income through their superannuation fund whereas customers want their dinner.
Even in the first two examples, where the investors and customers seek similar values, once their value is explored in detail, they may be very different.
The community service investors want a better suburb but the customer wants a particular problem solved.
The finance investors may want to build a corporate empire whereas their customers may just want to build a home.
It is important to understand the different value outcomes sought by your stakeholders, even when they look similar. This could make all the difference to how well you attract investment or retain customers. As you will see in the Direction function on the panel, one of the strategic concerns is that your stakeholders have substitutes available, other options they can take rather than your products or services.
Reinforcement actions are events or processes taken to strengthen your people and organisation. They help people learn and develop effective outcomes for the organisation.
Some actions that can help build an understanding of value are:
Some actions that can help build an understanding of value are:
- Team meetings
- Review customer service by beginning with an assessment of what value customers are after. Also be clear about the value the organisation,as the investor in your team, is expecting your team to create. It may help to think of what your boss or boss’s boss is wanting you to deliver.
- Business planning
- Try to understand the niche your business fills from the perspective of your investors and customers
- Change management
- Help people to understand the value the change will create for them. Also be clear in the business proposal about the target value and keep the change focused on delivering it.
The description section above introduced some questions you can use to understand value. This exercise helps you to explore what your stakeholders value. The term stakeholder is used here to cover both investors and customers. You will need to adapt these questions to suit your particular sector and stakeholders.
Gratification and Security
Fairness
Care
Liberty
Authority
Group
Integrity
Gratification and Security
- Where is your stakeholder more focused - gratifying current needs or feeling more secure?
- How balanced are they between the two?
- How does this reflect their short term and long term value needs?
Fairness
- How important is fairness to your stakeholder?
- How do they balance personal advantage with social responsibility?
- How do they approach fairness between you and them? Do they want a fair, long term relationship, a one off service or to take advantage of you?
- What does the stakeholder need to know to be confident they will be treated fairly and not ripped off?
- How do all stakeholders or prospective stakeholders get access to your products and services?
- How is the quality you deliver a fair outcome for the stakeholder’s investment and costs?
Care
- Who does you stakeholder want to care for?
- How does your stakeholder expect you to care for them?
- What social responsibilities does your stakeholder embrace?
- To what degree does your stakeholder aim to meet minimum regulatations and standards or try to excel as a leader in the community or sector?
- Where does your stakeholder feel no obligation to care for others?
- How much does your stakeholder value the social responsibility record of the people they deal with?
Liberty
- How much does your stakeholder value independence?
- What is their balance between wanting standardised versus unique product or services
- How much do they want a long term relationship versus a one off transaction?
- When does your stakeholder want the guidance and input of others?
- How much are they influenced by social and industry trends?
- How much does your stakeholder value the uniqueness of their own brand or identity?
Authority
- Who or what does your stakeholder consider authoritative for making their decisions?
- In what areas does your stakeholder consider themselves an authority?
- What authority does your stakeholder expect to have over your products and services?
- To what degree does your stakeholder expect you to be an authority or standard of excellence in your field?
- How does your stakeholder deal with deviation from authority?
- How important is it to your stakeholder that you are accredited by an authorising body?
Group
- What groups does your stakeholder belong to or identify with?
- What benefits does your stakeholder gain from belonging to the group?
- What obligations does your stakeholder accept towards their group?
- How much of their time is spent engaged with their group?
- How important is it to your stakeholder that you support their group or sector?
- What conflicts could exist between your products and services and what their group values?
Integrity
- How important is consistent quality to your stakeholders?
- How flexible is your stakeholder to variations and change?
- What factors does your stakeholder think will degrade their identity?
- What does your stakeholder think will corrupt or enhance the way they want to live or operate?
- How does your stakeholder define what it is to be the best they can be?
- How does your stakeholder evaluate the integrity of you and your products and services?
The Value Scale draws on the fields of marketing, cognitive development, cultural anthropology and psychology.
A standard marketing requirement for business is to create a value proposition, describing how your goods or services will benefit the customer. A lot of value propositions are more suited to the Design Triangle at the other end of the yellow Enrichment Axis. Here we look at the deeper, high level values that drive people and organisations.
To help understand these higher level values we firstly draw on cognitive development and recognise that early in life, as infants and toddlers, we learn the importance of gratifying our needs and feeling secure. These never leave us during life. What changes is that we get more sophisticated in how we deal with gratification and security.
The Value Scale then draws heavily on the work done in cultural anthropology and psychology to identify how we think about our important decisions. In particular we draw on Moral Foundations theory. It is important to realise that moral thinking is not about rules but about acting according to what we value. The approach used in the Value Scale is that the ways of thinking about how we ought to act are the categories that express how we value things in life. If we want to understand the many nuanced ways people and organisations define what they value then using the categories of moral thinking is a highly effective way of understanding them. We have slightly modified the categories to suit the language and environment of organisational culture and service delivery.
A standard marketing requirement for business is to create a value proposition, describing how your goods or services will benefit the customer. A lot of value propositions are more suited to the Design Triangle at the other end of the yellow Enrichment Axis. Here we look at the deeper, high level values that drive people and organisations.
To help understand these higher level values we firstly draw on cognitive development and recognise that early in life, as infants and toddlers, we learn the importance of gratifying our needs and feeling secure. These never leave us during life. What changes is that we get more sophisticated in how we deal with gratification and security.
The Value Scale then draws heavily on the work done in cultural anthropology and psychology to identify how we think about our important decisions. In particular we draw on Moral Foundations theory. It is important to realise that moral thinking is not about rules but about acting according to what we value. The approach used in the Value Scale is that the ways of thinking about how we ought to act are the categories that express how we value things in life. If we want to understand the many nuanced ways people and organisations define what they value then using the categories of moral thinking is a highly effective way of understanding them. We have slightly modified the categories to suit the language and environment of organisational culture and service delivery.