Creating Value: the reality
Aidan Ward and Philip Hellyer
If your heart sinks and your energy drops when you read “creating value” this blog is for you. The language has been so thoroughly captured by a corporate world that would not know what represented value for citizens if it jumped up and punched them in the face. There is the mother of all language disconnects here. I even know why: the person who gets to say what value is gets to call the shots.
Make sure you are sitting down, and not drinking hot coffee. Mariana Mazzucato tells this story: after the 2008 crash, Lloyd Blankfein claimed that Goldman Sachs employees created more value than anyone else in the world! To be fair, that’s his job and that of Goldman Sachs, to systematically bamboozle governments around the world. Of course, governments will want to work with the people who create the most value. But actual value, really? Maybe with a minus sign?
It really is that bad. We in our society are unable and unwilling to distinguish the contribution (positive or negative) to our society and its wellbeing between city types money-laundering for Russian kleptocrats, politicians accepting dark money to rig elections, and buy-to-let landlords. Let alone anything actually of value to you and me. We let price stand in for value and we all suffer the consequences.
Let’s just put some pegs in the ground around our own language. There is such a thing as value, arguably a scale of how important things are to us. As such value can indeed be created and it can also be destroyed. Perhaps most importantly it can be circulated. The dynamics of value as it is passed between people are its most important features. And we need to be careful about value for whom? If a posh lawyer gets his client off a rap, that is lots of value for the client we presume but may be a massive slug of anti-value for the victims if such they were.
The state gets involved for precisely these reasons: who gets to have their value if someone else suffers as a result. The technobabble economics about measuring overall value and is precisely why the language of value loses any meaning. And we know that the state can destroy value just by trying to measure it, Seeing Like a State again. We also know that the more a measure is used for decision-making, the more it will be corrupted.[1]
Trust dynamics and value dynamics
Trust and value are very closely related. In my book with John Smith, Trust and Mistrust, we argue that most trust mechanisms narrow the scope of trust progressively and in doing so limit degrees of freedom. One of the examples used is buying food at Tesco.[2] To trust the food safety of the products we buy we have to trust certain management and technical systems that Tesco use. When Tesco is seen publicly to let their customers down in food safety, they will double down on technocratic solutions and marketing: there is no other way forward. This is a complementary behaviour system as we discussed in the last blog. So trust can only maintained by insisting that Tesco’s systems are the most stringent, and customer choices, and degrees of freedom, are thereby progressively limited.
In what we called in the book authentic trust, we can choose to trust simply because it makes the world a better place. If I trust you simply because I choose to, that opens up degrees of freedom for both your and me. Similarly, if what I choose to do with value is to circulate it, famously explored by Lewis Hyde in The Gift, overall value across a wide spectrum of people can increase rapidly. The same valued objects, gifts, bring life and joy in different ways as the circulate through different cultures. That brings the possibility of entirely new sources of value, to add to what is already there. Conversely, if I simply hoard what I have then arguably its value erodes or is neutered altogether.
When we circulate valuable things and services, we can discover what value is possible. When we debate what sort of value these things might have for us as a society, we may discover that what we think we want and value is by no means the best that is open to us, and indeed may have serious drawbacks. We may think we want less immigration, but it may turn out that immigration is valuable to us in ways we had not even thought about. If we think that single malt whiskies are highly desirable we may find out that they limit our degrees of freedom in unpleasant and highly restrictive ways.
It is the dynamics of value that catch us out. So there are no answers, only a constant stream of new questions and a constant re-evaluation of yesterday’s values. “You said you liked x”, “you have always worn y”, “shall we go to z again” are somewhat sad statements caught up in questions of identity that we explored before. Rex Weyler tells a story of his grandmother when he was growing up. At the end of each month she would see how much money she had left and divide it amongst the charitable causes she supported. Rex got to do the maths and learnt something of the true value of money.
The value of real work
Real work has value, somewhat tautologically, and value is what real work produces. We know when we are doing real work, or often we know more definitely that the work we are doing is not real. It may be a bullshit job, a la Graeber, it may be an elaborate charade, it may simply be a sausage machine that should be automated. On my first job doing seismic exploration on the delta in Nigeria, another crew was sent to explore a part of Nigeria that could not possibly have any oil, to satisfy the ambitions and ego of some chief. The other side of the coin is a whisteblower managing to do serious real work when all their colleagues are keeping schtum. “Real” is always contextual, can only be contextual, relies on the social meanings attributed by the context.
So how can we compare the value of this work to the value of that work? Are they incommensurate? First I want to question the purpose of the comparison, and whether the comparing is itself real work? Then I want to say that there is whole body of official work on Social Value and how to calculate down to a single number. It is even in the Treasury’s Red Book I believe. And then I want to say that Social Value work very rarely gets done despite being mandated for public sector projects, and its importance gets trashed routinely. Let’s call this the Goldman travesty! “Yes, but we can’t be bothered with that now; we have an economy to run.” Which roughly translates to: my answer about value always trumps yours, no matter what the evidence.
What people want to say is that the value of real work should become more evident over time with hindsight. I have some sympathy with this “the truth will out eventually” take on the world. But differentiating this from the Goldman travesty is quite hard: Goldman Sachs obviously do real work because they are top of the heap. Might is right. If I do real work on this conundrum I come up with something like: the world is not flat; I have to understand the way I bring myself into a situation; then I have to unpick the claims being made at least in terms of whether they are simply self-serving; then I can start to see who has struggled against the conventional, life-destroying wisdom to release value that is actually new. Elon Musk is burning cash at an impressive rate: is he creating value? Well potentially he is advancing the cause of electric vehicles, and there is even a point of view that says that burning cash is important in a world where far too much is being printed. But you would really have to do some real work to find a position to live with!
A complementary dynamics story
Here is a story or case study rehearsed by Philip. It has the complementary dynamics that we have pointed out lead to breakdown. And it is all about who sees what value where. It also shows how subtle it is to intervene to correct this all-too-common scenario.
So a large corporate is to develop a new IT system, the way they do. There are some business analysts whose job it is to capture, technically, what the system should do. And there are people “in the business”, including sponsors, who will provide business insight to the analysts. For the business people, value consists of enhancing their ability to do business. For the analysts, value consists of having a workable, self-consistent description of a technical system. Note the assumption that these values coincide, which of course has to be false except in trivial cases.
The dynamics work like this. The business analysts ask questions of the business people, who may be helpful at first. However there are bound to be questions that the business people do not yet know the answer to. In this situation the analysts ask more and more questions, and become a drain and a drag. The business people start to design their answers to make the business analysts go away. This is a clearly complementary pattern: the analysts keep trying harder and harder to find out what they need to know to deliver value. It doesn’t matter whether they use the misleading answers they are given or just resort to making up the answers they need, they are “working” to create artefacts that beg the value the business people want. On their side of the dynamics, the business people are frustrated by a lack of a way to find out how to do things that haven’t been done yet. They want a system to answer those business questions, not questions about what the answers are going to be.
There is nothing in the business or technical sphere that can satisfy these dynamics. And the hoped for value in these two groups of people remains negative: more an obstacle than a product. Accidentally invented crap. The dynamics can only be tackled as dynamics per se. The dynamics are set in motion by another hidden assumption, that this is a project and it will be tackled by doing things in the right order. To correct the dynamics it can be tackled as a joint business/technical discovery programme: there have to be elements of symmetrical dynamics where it is understood that both parties need to compete to find answers that can work in both domains.
Maybe you can tell that I am not very motivated by getting broken corporate stuff to work, but I still find the story interesting as a tale about value. In this case two areas of value production/creation remain negative until there is a proper conversation about what value might be jointly! Magic. The original premise that the business needs to ask for what it needs is so destructive.
Public sector value
Mariana Mazzucato seems to be making a career pointing out that most value comes from the public sector, and that if the public sector regained its mojo it could produce much more. She points out that the technologies that underpin Apple and Google for instance were developed using public funds and resources. Why does she need to say that? Because we have been bamboozled by the Goldman travesty into believing that it is the private sector that is dynamic and productive.
In the Victorian era, as we have said, people made their pile and then gave it to found libraries, and educational institutions and parks, etc. If Apple recycled some tiny percentage of its pile of cash into the institutions that enabled its success, then the finances of those institutions could be transformed. Does Apple believe in the creation of value or does it just want to hype its own success for anti-value reasons? This is important.
If anyone was prepared to do the real work, and mostly they are absolutely not prepared to challenge the damaging negative stereotypes about the public sector, we could see exactly the same dynamic as in the case study above. The public sector provides much needed products and services, often to some of the most deprived sections of our deeply divided society. We say we do consultation and even co-production but we nest that within a public sector management framework that insists on predictability and guarantees. Which sets up the wrong dynamics of doing things to people who become increasing passive and abject. Getting permission to do co-production is simply embedding the myth of projects and the lie of joint responsibility. Gross fail.
Remember, value is about the conversation about value. It has to be an open-ended conversation founded on respect and full equality.[3] Otherwise the dynamics intervene and make sure there is little or no value and no-one is responsible for the failure. Even after decades of heading the wrong way, genuine conversation and debate hold the key to creating all future value.
[1] Donald Campbell: “The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.”
[2] Clearly this applies to many other businesses too, we’re not picking on Tesco here, they just happen to have been the example used in the book. It’s the narrowing of options and the insidious doubling-down that is important.
[3] Which reminds me of Carse’s Finite and Infinite Games, in which all play is voluntary; anyone who must play, cannot play.
