In business value is defined mostly in economic terms. Markets monitor economic performance. Leaders constantly watch ways to reduce expenses and grow revenue.
Consumers make economic decisions based on the value/price equation and pay is used to attract the right people to work for a business. Businesses use marketing and advertising to attract people to purchase their goods and services. In business relations economic factors are the driving force of decisions
In our personal lives value is mostly defined in relational terms. We befriend others based on affinity of interest and bonds of experience. We marry based on common values and attributes which attract us to someone. We raise a family and try to instill values in what and how we believe and why. In personal relations economic factors are not typically the driving force of decisions, value factors influence decisions.
Businesses have created social systems which create opposing values to people’s personal social environments. The subsequent “clash in values” is where businesses lose productivity, profitability and market share. The paradigms of management methods lead leaders to believe that producing economic returns was relative to managing higher production throughput aimed at better economic returns, the bottom-line. Cutting cost or acquiring more revenue became default options and the methods were fairly easy. Then came the competitive variable of “quality” and the emphasis was placed on process optimization and reduction of defects, i.e. cost controls. The methods shifted to knowledge driven by data, not as easy as before.
Is Today’s Competitive Variable Relationships?
Doc Searls writes “Markets are Transactions, Conversations and Relationships. Our financial system is Transaction run amok. Metastasized. Optimized at all costs. Impoverished in the Conversation department, and dismissive of Relationship entirely. We’ve been systematically eliminating Relationship for decades, excluding, devaluing and controlling human interaction wherever possible, to maximize efficiency and mechanization.”
Charles (Kalev) Ehin, Ph.D and author of “Hidden Assets” writes “Unfortunately, many people still want to deal/focus exclusively on the bottom line which really isn’t the bottom line but only part of it.
Experience and research is slowly beginning to peel back the facade and show how social systems really function. Social systems are organic. They are composed of very vibrant constantly evolving self-regulating networks. They don’t look or perform like “machines.” In fact, social systems work around mechanical structures whether devised by heads of prison administrators or managers set on running very “strictly disciplined” organizations. Some sage individuals have known that for ages. Only recently, however, have we begun to accurately recognize how our social systems actually function.
W. Edwards Deming once said “Today’s management systems need to focus on helping people improve. We have to bring back the individual. Management has smothered the individual. If you destroy the people of a company, you do not have much left.”
Now consider three different perspectives from individuals whose thoughts about “social systems” and business performance tell the same story. The bottom line is driven by the quality of relations, people. The social web has magnified the issues and made them transparent.
If you do not properly deal with the issues the light of transparency will shine on your business at the click of a mouse and magnify them one to one to millions of individuals, people.