How Smarter Companies Create Value

by Jay Deragon on 02/19/2013

Value Creation ElementsSome companies create continuous value. Others simply stop creating value. Some are smart and some are dumb. What is the difference between the two?

Value creation has changed. It used to be that a company could simply put a product or service out to market and it would be consumed by ready buyers. Today buyers are smarter and they want value continuously.

Continuous value creation is a philosophy and a process.

Philosophically it is different than creating products and services and selling them to “targeted” audiences using slick marketing messages. It is more about aligning the right human resources with the purpose of the organization and leveraging structural  and relationship capital to attract the buyers looking for the value you create.

The process isn’t a process in the traditional sense. Historically processes were designed from the inside out and occasionally from the outside in. Once a process was designed, measured and monitored it only changed when the supplier wanted to squeeze more out of it. The philosophy of continuous value creation dictates that the process must change based on the preferences of the stakeholders. Stakeholders being human resources, buyers, shareholders, suppliers and markets.

In the Social Era alignment of the processes with the organizational philosophy and using the right kind of “capital” to create continuous value is a requirement to survival. Success comes from the process of continuous and rapid learning.

Four Elements of Value Creation

In the Social Era value creation originates from intangible capital identified, measured and monetized through continuous value created and delivered.  Internally value is delivered through the “connectivity” of human capital with cultural attributes. Value creation is then aligned with organizational purpose.  That value is then leveraged through structural capital used to deliver the value to markets.  The value connected to a collective purpose and leveraged for distribution to the market creates attraction by those buyers seeking both the existing and future value created by the organization.

This is the sequence of events, the creation and organization of “intangible capital” that enables smarter companies to continuously create value that the market will consume.   The knowledge of how to measure, monitor and monetize intangible capital is the difference between smarter companies and dumb ones.

Being a smarter company is a never ending process of engineering intangible capital for the optimal creation of continuous value for consumption by the market. Being a dumb company simply means you don’t know how.

Learn how to be a smarter company by learning from smarter companies.

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