Monday, October 24, 2022


 Value creation is both art and science by balancing short term benefit and long term advantage.

Generating value is the very goal of all meaningful human activities. Value plays a bigger role in determining which task needs to be addressed first by setting the right priority, creating a business justification case, and fitting organizational purpose. 

Business value is multi-faceted and it’s important to see how business value is in the eye of the beholder; the value of the firm goes beyond economic value or shareholder value, having more enriched content for benefitting human society.

Value of a business model is to create customers by solving their problems and generating revenue: Organizations exist to enable one or more business models to function. The business model is a description of how a business operates; it includes the components and functions of the business which generate revenues and expenses of the business. To perceive the value of the business model, you need to have a very clear idea of the new product/service development cycle, the overall "value proposition," in which it fits into the overall "products/services portfolio," the wider competitive landscape and price/business model.

To design a practical business model, business leaders should scrutinize further by asking: How do we get revenues now? What will we do in the future? How should we help the company win businesses? Some organizations require the calculation of a return on investment (ROI) Some organizations prepare a budget. Some organizations require the benchmarking study. Tuning a viable business model is about foreseeing and applying the emerging trends; where can you win the competitive advantage, and create multidimensional business value holistically.

The 'True Value' of an employee is a total of what the employee brings to a business, now and in the future: Employers experience the value of their employees every day through their daily interactions with the company customers. You need to look at all aspects of individual traits, work ethic, influence, creativity, experience, capability, achievements and performance, and the hidden potential each employee has if given the opportunity to excel within the work environment.

The true question is: "What is the contribution of an employee to the total output of the organization?" The value of an employee can be perceived via multi-dimensional lenses (Quality, Creativity, Productivity). A valuable employee can stay current in their field/profession; innovate, create new efficient ways of working; mentors and coaches others, and generates multidimensional value constantly.

The value of a business system: Organizations are organic systems that demonstrate diverse forms of values such as employee value, customer value, channel partner value, managerial value, besides economic value etc. Business management needs to properly understand all elements of value that are translated to the organization. With a clear business value stream view, all parties can agree on the common value proposition.

The management needs to evaluate whether they have common values and a dynamic business management that takes into account initial business investments, customers, products, services, economical cycles, market shifts to ensure business value generation. To demonstrate value, it is important to convince the shareholders of new initiatives with solid business justification by showing them the potential business benefits to meet the strategic goal of the company.

Value creation is both art and science by balancing short term benefit and long term advantage. Business development activities may deliver little to no economical value for the short term, but it helps to build a strong business reputation or brand in the long run. Thus, it’s important to assess how all the pieces and parts of the organization are ultimately impacted, by each new business initiative, in order to run a value-added business with competitive advantage.


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