Tag Archives: value

Takers and Makers: Who are the Real Value Creators?

By Mariana Mazzucato – We often hear businesses, entrepreneurs or sectors talking about themselves as ‘wealth-creating’. The contexts may differ – finance, big pharma or small start-ups – but the self-descriptions are similar: I am a particularly productive member of the economy, my activities create wealth, I take big ‘risks’, and so I deserve a higher income than people who simply benefit from the spillovers of this activity. But what if, in the end, these descriptions are simply just stories? Narratives created in order to justify inequalities of wealth and income, massively rewarding the few who are able to convince governments and society that they deserve high rewards, while the rest of us make do with the leftovers.

If value is defined by price – set by the supposed forces of supply and demand – then as long as an activity fetches a price (legally), it is seen as creating value. So if you earn a lot you must be a value creator.

I will argue that the way the word ‘value’ is used in modern economics has made it easier for value-extracting activities to masquerade as value-creating activities. And in the process rents (unearned income) get confused with profits (earned income); inequality rises, and investment in the real economy falls.

What’s more, if we cannot differentiate value creation from value extraction, it becomes nearly impossible to reward the former over the latter. If the goal is to produce growth that is more innovation-led (smart growth), more inclusive and more sustainable, we need a better understanding of value to steer us.

This is not an abstract debate.

It has far-reaching consequences – social and political as well as economic – for everyone. How we discuss value affects the way all of us, from giant corporations to the most modest shopper, behave as actors in the economy and in turn feeds back into the economy, and how we measure its performance. This is what philosophers call ‘performativity’: how we talk about things affects behavior, and in turn how we theorize things. In other words, it is a self-fulfilling prophecy.

If we cannot define what we mean by value, we cannot be sure to produce it, nor to share it fairly, nor to sustain economic growth. The understanding of value, then, is critical to all the other conversations we need to have about where our economy is going and how to change its course. more>

How to Save the Human Race

BOOK REVIEW

World Population and Human Values: A New Reality, Authors: Jonas Salk and Jonathan Salk.

By Gabrielle Levy – Until only recently, the whole of human history has been marked by population growth, first gradual and then, in the past two hundred years, a sudden explosion. But in the last decades of the 20th century, population growth began to slow, and eventually, it will plateau or even decline.

The moment at which growth goes from accelerating to decelerating, according to a theory posited by Dr. Salk is called an inflection point – and would be filled with turmoil and conflict, but also opportunity.

Salk characterizes the time before the inflection point as Epoch A, and in that period, people were focused on their own betterment and achievement as necessary to capitalize on the potential for great growth. But going forward, after the inflection point in Epoch B, people will need to be more collaborative and sustainability-oriented. This plays out now in issues like climate change, where the world must work together to combat the issue.

The book has a particular kind of resonance and a particular kind of relevance at this moment in time, because we’re really seeing the pull between two differing value systems, and making decisions as a species about how we’re going to deal with the future. It’s always been a meaningful book, but I think it’s particularly poignant at this moment in time. more>

How To Apply Bill Belichick’s Formula For Success To Your Business

By George Bradt – It starts with building capabilities. When Suzy Welch sat down with Belichick for CNBC last April and asked whether winning the next Super Bowl was his next goal, he told her that was too far away. Job one was to “Put a good competitive team together.”

He hires for values and manages with guiding principles.

  1. Build capabilities by recruiting the right people with the right values and developing them over time.
  2. Prepare in advance of your most critical interactions, focusing as much energy as possible on customers and as little as practical internally.
  3. Adjust as required, in line with your capabilities and guiding principles.

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Moving To Blue Ocean Strategy: A Five-Step Process To Make The Shift

BOOK REVIEW

Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, Authors: W. Chan Kim and Rénee Mauborgne.
Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth, Authors: W. Chan Kim and Rénee Mauborgne.

By Steve Denning – Instead of struggling to survive in the bloody shark-infested “Red Oceans” of vicious competition, why not move to the “Blue Oceans” where there was little or no competition?

What inspired the authors was not “dividing up markets or the globe,” but rather organizations and individuals that created “new frontiers of opportunity, growth, and jobs,” where success was not about fighting for a bigger slice of an existing, often shrinking pie, but about “creating a larger economic pie for all.” The book was a publishing sensation. It sold more than 4 million copies and has been translated into 44 different languages.

Now, 12 years later, the authors offer an exciting new book that synthesizes their experience in assisting with the implementation of Blue Ocean strategy.

In effect, Blue Ocean strategy involves market-creating innovation. It opens up new possibilities that are not available to organizations operating within the existing cost-value structure. It expands the universe as to what is possible, often enabling higher value at lower cost.

Perhaps the most important chapter is Chapter 3, which delineates the Blue Ocean mindset and the distinctive opportunity-based thinking that is at the foundation of Blue Ocean strategy.

It is a perspective that enables strategists “to ask a fundamentally different set of questions,” the answers to which “in turn enable them to perceive and appreciate the fallacies behind long-held assumptions and the artificial boundaries we unknowingly impose on ourselves.” more> https://goo.gl/hNPdDG