Value Creation Has Shifted

12,173 views

Published on

The value creation process has shifted from an emphasis on tangible things to optimizing intangible things in order to create tangible results. Let’s examine some of the evidence

If you want to succeed in the Social Era then the recipe is to create more value by using assets that create the most value, intangibles. The problem with most organizational leaders is they simply don't know how.

Published in: Business

Value Creation Has Shifted

  1. 1. proprietary and confidential Value Creation Has Shifted… It’s about how and what value is being created
  2. 2. proprietary and confidential There Are Three Distinctive Shifts 1.From technology platforms to business as a platform 2.From the purpose being profits to purposely creating value 3.From measuring and improving tangibles to measuring and improving intangibles
  3. 3. proprietary and confidential Business As A Platform The word platform defines the core elements around which the purpose of a business can be fulfilled. Once a business has defined its platform then suppliers, internal resources and buyers can co- create, add, distribute and consume value.
  4. 4. proprietary and confidential Business As A Platform Successful business platforms do three things: A) Provides efficient and effective connectivity: how easily can suppliers, internal resources and buyers create, add, distribute and consume value. B) Attraction: Your business should attract people, suppliers, resources, buyers and markets C) Purpose: The purpose of your platform is the ongoing exchange and co-creation of value
  5. 5. proprietary and confidential Business As A Platform Successful platforms have three building blocks: A)The Toolbox creates connection by making it easy for others to plug into the platform. This infrastructure enables interactions between participants B)The Magnet creates pull that attracts participants to the platform with a kind of social gravity. C)The Matchmaker fosters the flow of value by making connections between producers and consumers. Data is at the heart of successful matchmaking, and distinguishes platforms from other business models. Three Elements if a Successful Platform Strategy: HBR
  6. 6. proprietary and confidential Business As A Platform A Business Platform enables people to participate in value creation, addition, distribution and consumption as a result of being engaged with the business.
  7. 7. proprietary and confidential Business As A Platform To succeed in the Social Era every business needs to think of itself as a platform. Thinking about business as a platform with three things the platform needs to do and the building blocks it needs to provide will change how and what you and others do everyday.
  8. 8. proprietary and confidential Business As A Platform It’s not about organizational charts used to put people in places. It is about organizing the creation, addition, distribution and consumption of value. People self organize around value creation with a purpose. People resist being organized around positions of little value or no purpose.
  9. 9. Business As A Platform In his book The Practice of Management, Peter Drucker declares there is only one purpose of a business: to create a customer. Then the purpose of a business platform is to create value that creates a customer. You can’t create a customer without first creating value.
  10. 10. proprietary and confidential Value Creation Is Only As Good As The Source of Value The evidence suggests a shift is occurring in how and what organizations create for value that markets want to consume
  11. 11. proprietary and confidential Lets Examine the Evidence Wealth Is Created From Intangibles
  12. 12. proprietary and confidential Lets Examine the Evidence 1.The intangible value of social media 2.The worlds most successful companies 3.S&P 500 Index 4.The Top 10 Cities in the USA 5.The Top 50 Countries in the World
  13. 13. proprietary and confidential Wealth Is Created From Intangibles Social media, and all things social, represents intangible capital being created, added to, distributed and consumed. Over $1 Trillion in global commerce is created through social media.
  14. 14. proprietary and confidential Wealth Is Created From Intangibles The Intangible results of social media include: 1. A positive or negative emotional reaction from brand communications 2. The acknowledgement of being heard 3. The feeling of not being just a dollar sign to a brand, rather than a valuable person. 4. The feeling that the brand is trustworthy, transparent and open to dialogue from consumers. 5. The sense of recognition for contributing to the value of a brand 6. The ability to influence others who share similar sentiments about anything, everything and anyone
  15. 15. proprietary and confidential Wealth Is Created From Intangibles Results created by some of the world's most successful organization are driven by the intangibles: empathy (Google) culture (Southwest), social graph (Facebook), design (Apple) customer experience (Amazon & Zappo's) and the list of companies contributing their results to intangibles goes on and on.
  16. 16. Wealth Is Created From Intangibles The increased recognition of intangible capital is reflected by the increase of the S&P 500 valuations assigning 84% of the company’s value to intangibles. Just 25 years ago intangible capital only represented 17%.
  17. 17. proprietary and confidential Wealth Is Created From Intangibles The World Bank reports that intangible capital represents up to 80% of the wealth in any country. The Top Ten best US cities to live in and the Top 50 most innovative countries are those that create the most value from intangibles. We are witnessing the recognition of intangible value yet most companies simply don’t see it.
  18. 18. proprietary and confidential Why Don’t They See It? 1.Because they haven’t been trained to see it 2.Because they can’t see what they don’t measure 3.Because they don’t know how to measure it 4.Because they never had to 5.Because it wasn’t as important as it is now 6.Because their wasn’t enough evidence until now 7.Because they can’t see what they don’t understand
  19. 19. Seeing The Value In the Social Era success comes to those who create the most value. The recipe to creating more value is by using assets that create the most value, intangibles. Now there is a way to see your own evidence. Use an Intangible Graph to see (measure) what intangibles create the most value for your organization.
  20. 20. Use Your Capital Wisely Smart Companies use intangible capital to create more value for all stakeholders. Smart Companies use new tools to identify, measure and improve value creation. Get the knowledge and learn how to use your intangible capital to create more value than ever before. Jay Deragon Jay.deragon@gmail.com

×