Discerning Value — How to approach value creation at the advent of the 4th industrial revolution
We are at the advent of the 4th Industrial Revolution and Technologies are transforming life as we know it. In this context, it is not sufficient just to manage value through the operation engine but to create value through growth engine mechanism. This Blog post is authored to create an explicit understanding of discerning value; making a critical distinction between its Creation and Management. The creation is usually unconstrained while the Management would be disciplined with constraints.
The question which allures today at the heart of our lives is “What are we preparing our enterprises for?” Is it to continue servicing debt or to transform them for servicing Wealth? We are led to this question as we face a revolutionary shift in our lives; be it in our societies, enterprises and/or families. As Individuals, we occupy real estate in all the three spheres, hence this shift signals a transformation of a majority of consumers to a majority of contributors as a consequence of democratization of systems. Democracy is finally coming of age where emancipation rather than entitlements are driving Individual Values and Behaviors in Life.
A mutually inclusive approach for Digital Transformation Strategy would be to connect the 4C’s including Concept, Culture, Capabilities, and Configuration need imagination and implementation to remain relevant at the advent of the Fourth Industrial Revolution.
The conventional economic definition of Value is recognized as an economic return in exchange for a Product or Service. At a transactional level, the return is conventionally a factor of perception that is measured in the five dimensions of Quality, Cost, Delivery, Service and/or Flexibility. However, the Creation of the Platform, Product, Process and/or Service is an aggregated Value that correlates to the unit of a transaction. The important point not to be missed here is that Value Creation supersedes Value Management with a clearly measurable connection from the abstract to the detail.
“In an environment of increasing democratized societies and systems there are more who seek to find expression of their talent . There is an emerging definition of Value as Intellectual Property (IP) that “Creates” the avenues for Value to be “Delivered & Managed drawing from the Potential and not just Performance”. And this Intellectual Property (IP) finds expression across the Customer Ecosystem of Client, Team Members, Stakeholders, Shareholders, Business Partners, Vendors and Societies in which an enterprise chooses to operate. While designing digital solutions, the emphasis should be that this expression of Creation of Intellectual Property (IP) finds appropriate sponsorship. Addressing this is a mandatory step to drive the journey of excellence that we have come to identify as Innovation.”
The customer and/or consumer who pay for Platform / Product / Process and/or Projects (Services) recognize the value in the five dimensions of Quality, Cost, Delivery, Service & Flexibility at the transactional level, as illustrated in the image above.
The Shareholders and Stakeholders recognize the value as Returns on Assets Deployed (R.O.A.D.); mainly as Intellectual Property that moves from Conceptualization to Commercialization.
Whereas the Business Partners, Vendors and Society recognize Value through Brand Equity and Market Positioning represented through Market Capitalization and Profitability; which is again gleaned through the entire process of Conceptualization to Commercialization with particular emphasis on Engineering and Industrialization.
When one pays attention to the Value Chain it should not be too difficult to decipher that the process of Value Creation has to happen with the Shareholders, Stakeholders, Business Partners, Vendors, and Society before a viable product can be delivered to a Customer and/or Consumer to manage their perception of Value. There is no tree and fruits without the seed. And unless this seed and its shoot are nurtured with care, there is no sustainable growth of the tree to produce flowers and fruits continuously and bountifully.
It is evident that the 4th Industrial Revolution is all about value creation rather than value management. the whitepaper “Discerning Value — An Essential for the 4th Industrial Revolution” provides a roadmap for value creation for the Enterprise of the future. This white paper makes a case for renewed thinking on energizing the enterprise and business organization to Create and Manage Value mutually inclusively.
This can be achieved only when every enterprise stops to examine its true reflection in the mirror in the context of staring back at us and mapping a journey in that relevance. The energy needed here is akin to rocket fuel and not one that powers a jet or a car. It is time to connect universally and tap into its infinite energy. In doing so, the boundaries of human mediocrity can be challenged for the greater good of this planet.
Hreemm is an Enterprise with a mission to facilitate Innovations that dramatically improves the quality of living in every aspect of life. We are building an Innovation Platform that aims to transport Intellectual Property from conceptualization to commercialization in a continuum.
