Roles and skills around the value cycle
Steven Forth is co-founder and managing partner at Ibbaka. See his skill profile here.
The value cycle defines how organizations create, communicate, deliver, document and capture value. It is generally used by companies to align different business functions around how they create value for customers.
Another way to use the value cycle is at an individual level. People can use the value cycle to answer critical questions about how they create value. In this case the value can go beyond the value to customer (V2C). The best practice is to think about how value is created for …
Customers they serve
The company they work for
The team they work on
Themselves
The wider community or society
Before we go into detail at the individual level, here is a general introduction to the value cycle.
The value cycle is built on a foundation of value understanding.
Value understanding
There are three aspects of value to consider.
Economic value (measured in dollars, Euros, yen, etc.)
Emotional value (often gauged using Maslow’s hierarchy of human needs)
Community value (value being given to the wider community, beyond the customer, company, team or individual)
Understanding requires reflection. That is the purpose of the exercise we describe here.
Value creation
We all create value in different ways. Some of us are thought leaders or content creators, others build relationships inside or outside the organization, there are data crunchers and others who can interpret data and spin it into stories. People who do the administrative work that keeps the organization ticking are also creating value. So are people outside the company, who are part of the community or who provide services.
Roles and skills are closely connected to value creation, or they should be. This can go two ways. In some cases people have skills for additional roles and could create more value when given the opportunity.
Value communication
We have to communicate the value we can deliver. We should also acknowledge, celebrate even, the value others are creating. Ibbaka’s skill map is a value communication tool, couched in the language of skills. The value pricing dashboard also communicates the value a company provides to its customers, or value to customer.
Value delivery
It is not enough to have the potential to deliver value and to be able to communicate that potential, one must actually deliver the value. Consistently delivering value is not easy. One needs to deliver value through every interaction, do this consistently, over time and in many contexts. Value delivery is the most important phase in the value cycle.
Value documentation
Many of us skip the step of documenting value. Keep track of the value you have delivered and see how this has changed over time. There are many ways to document value.
At the company level, the critical thing to document is value to customer (V2C), which can be documented in several different ways, from Return on Investment and Total Cost of Ownership to Net Present Value and Economic Value Estimation. There are the things that the Value Pricing Dashboard helps with.
For teams, keep a record of the projects you have worked on and their outcomes.
For individuals, well designed Key Performance Indicators (KPIs) and Performance Reviews can also be helpful (but you will need to shape the performance review and not just passively answer questions). Growth of skills is also an indicator of one’s ability to contribute value.
Value Capture (Reward)
The value cycle is only sustainable if there are rewards. One needs rewards in order to continue to create and deliver value and keep the value cycle turning.
Rewards come in many forms, financial, social, emotional and even as the development of new skills or the opportunity to play mew roles.
Being able to make a direct connection between value delivered and value received is important for both motivation and continuous improvement.
Making the value cycle personal
The value cycle is central to the work we do at Ibbaka. We have a learning team focussed on getting people up to speed on Customer Value Management. Customer value management is the value cycle as it unfolds across the customer journey.
As part of that learning we are looking at the value cycle at an individual level. We created a matrix (see below) that invites people to think about how they act on the value cycle for customers, the company, the team they work on, for themselves and for society at large.
Having people at all different levels present their version of this table back to the team has been enlightening. People have many different ways that they understand value within each of these frames. Understanding of value is conditioned by roles and experience. Developers used language from coding and data management to describe how they provide value. Designers talked about the user experience. Marketing people used value stories and value propositions to explain value. Customer success framed value more in terms of completing value paths. (What is a value path? Check out this simple description.)
Drilling down to the individual level and then expanding the fames to include the company, team, self and society has helped Ibbaka get a more holistic view of value, the contributions people are making, and how we understand value.
The ‘individual’ (self) and ‘social’ frames were especially interesting.
Understanding the value we are creating for ourselves is important and most of us do not spend enough time reflecting on this. Value goes well beyond money. For many people relationships are an important part of the value.
It is also important for many people to understand how we are creating value for the wider society in which we live. Most of the comments in this frame were either local (the community where people live and work) or were directed at communities of practice and professional disciplines (many of the people at Ibbaka initially met at the Vancouver Knowledge Management Community of Practice and participate in the wider design thinking community).
This table format is a good way to collect information, but it misses some of the reinforcement loops. By providing value to customers companies are able to capture value through price. Individuals and companies can be concerned with the value they provide to a wider society. Individual loyalty is often more to the team than the company.
Taking the individual responses and then building them into a network graph (the value graph) can give a lot of insights into the organizational basis of value.
The next step for Ibbaka will be to ask people about the skills they use to deliver each aspect of value. It will be interesting to see if there are differences in the skills engaged across the value cycle and for different value stakeholders.
We will be asking “What skills do I use to create, communicate, deliver and document value for …”
Customers
Company
Team
Self
Society
The same table used to gather information about value can be used for skills. The same approach can then be used to build a skill graph and the two graphs can be connected to give deeper insights into how skills and value connect.
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