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Welcome to the The Little Book of Value wiki!
This book is about value; what value is, why do consumers adopt new technology (Hint: value), what is value creation, how does value work. In my research, I seek to learn how to measure and manage value and value creation (to better understand innovation as a complex dynamic system). This book is a practitioners guide, a case book, to understanding value. If you would like to share your value story see 'How to contribute' below.
This project is an online collaborative book project, partnering innovation researchers and industry practitioners to explore and test a value theory of innovation. Using cases, a value theory will be examined across different contexts, to see if we can break or extend the theory.
#LBOV #LBOvalue #LittleBookofValue The Little Book of Value is a 75pp eBook to publish by end 2017.
- Community Version $free (when you contribute your Value story).
- Draft at June '17: epub | pdf | all | latest (Jan'18).
- How to contribute? Post a reply on the blog. Mail me at: areff2000 [at] yahoo.com. Tweet me at @valuemgmt.
- Next steps - final editing for sense and cleaning up. Licensing pictures.
- May '18; Apple ends support for iBooks Author; piloting copy in Pages.
- March '18; writing Senate Submission on NBN using Observable link.
- 24.11.17 Exporting from Github to iBooks Author, for final editing. Export Chapter 2 (short history), 3 (Case Intro), 4 (NBN consumer), 5(NBN infrastructure), 6 (Smartphones), 7(Apple), 8 (Skyrail), 9 (Happy Wife) - ...
- 10.11.17 Clean up, ready for finalising. Testing Gittobook as Git export to epub tool. Prefer iBooks Author for pdf epub export, printing. Export Chapter 1.
- 27.10.17 (After four weeks in EU) Revising text. Sourcing images and permissions(??).
- 15.9.17 Add intro to home page. Add pdf version to downloads.
- 18.8.17 Happy Wife: Happy Life (Value of partnership 121); Case 6 (in draft)
- 13, 19, 21.7.17 Export writing to iBooks Author. Also ePub version now loaded and available.
- 7.7.17 Export writing to date as pdf (43pp), pub (188pp). Look at leanpub.com ($99). Load to iBooks Author (76pp). Next: Reflection on what done so far... is it working. Am I getting useful content, detail. Create as pdf, convert to epub (http://ebook.online-convert.com/convert-to-epub) per thread: https://discussions.apple.com/thread/5469036?tstart=0
- 9.6.17 Minor edits to consumer NBN case, and main pages.
- 28.4.17 24pp. Minor edits. Case 5 (Value as process - consumer NBN) in progress 3pp. Pickup - add reality of using NBN, install process, Shifting value with more information.
- 13.4.17 21pp. Editing Homepage.
- 17.3.17 21pp. text Case 4 (Value of SkyRail) in progress 2pp. Pickup - more examples of Value Language, opposition.
- 4.3.17 19pp. text Case 3 (Value of Apple) in progress 2pp. Pickup - more Apple examples eg MacBook Pro video.
- 3.3.17 17pp. text Case 2 (Value of NBN) in progress 3pp plus data Obama/Trump (13pp). Pickup - ??? more NBN assessment.
- 17.2.17 14pp. text plus 6pp. pics plus Refs. Case 1 (Value in smartphones) draft in progress.
- 3.2.17 8pp. text plus 5pp. pics.
This book is a condensed practitioners view of the PhD, blog and tweet examples. It aims to be simple, practical and easy to follow.
For Tabitha, the market researcher who moved in next door.
In my research, I seek to learn how to measure & manage #value/value creation to better understand innovation as a complex, dynamic system.— Richard Ferrers (@ValueMgmt) December 4, 2015
In my PhD I asked the question: how do consumers understand the value in a 3G mobile phone? In my blog, Value Management: Innovation 2.0, I explore what is Value Management in a conversation with readers, in a process I describe as Innovation for the 21st Century - interactive, online, but hindered by a data deluge. The Little Book of Value is a summary and synthesis of my PhD Ferrers (2013) - A consumer value theory of innovation, (free [CC-BY] to read/download at Figshare) 200pp, 20pp Refs, 65pp Appendices, plus 100 Value posts on the blog, and 3,000 tweets at @ValueMgmt. The book also presents a number of practical cases to showcase how value works as an analysis framework to better understand innovation and why consumers adopt new technology.
About the Author and a short timeline.
- Including Value Dimensions, V.Elements, V.Management, V.Target, V.Momentum, V.Phases, V.Shift (where V. means Value); Attitude, Context, Innovator Strategy.
What is the problem?
Value is important (see why below), but there are contesting and incomplete definitions of value. Looking at the history of value gives a more complete understanding of value. Looking at data from consumers gives a more practical and thorough understanding of value. Value is studied through philosophy (axiology), data (grounded theory), and many different disciplines (theoretically), such as economics (creating value), marketing (capturing value), project management (delivering value; for instance earned value management). It is the breadth and its ease of use that makes 'value' as a descriptor both useful and problematic. Consumers used the word value easily to mean something good or affected if events turned bad. Yet unpacking the many and varied meanings of the word are the purpose of this Little Book of Value.
Value is a process and an outcome:
- See the comprehensive diagram of the Value process here. Simpler versions are here.
- See value as outcome discussed below - see value is simple.
Value is incompletely understood:
- Gronroos (2011): "it is not clear what is mean by value creation... value is an elusive concept" (p280 - 1, #2)
- Gummerus (2013, p.20): "competing conceptualisations of customer value but no consensus exists... value research remains 'an area of continuing ambiguity... with no clear theroretical anchor'... customer value as a concept lacks clarity"
- Domegan et al. (2012): "opportunity... by conceptualising more precisely the valuing activities of subjects, objects to be valued...and how impacted by various forms of value" p.208
- Vargo, Magion and Akaka (2008); "exploration of value co-creation raises... questions... what exactly are the processes involved in value creation" p.151 ( in #2).
See Value References.
Why is value important?
Data from my PhD literature:
- Kim and Mauborgne (2005)^^: successful innovation shows a "leap in value" p.12 for consumers.
- Schumpeter (1934, p.12): sees innovation as "useful things... to satisfy [consumer] needs" i.e. value creating
- Porter and Kramer (2011); argue for redefining corporate focus from 'just' profit to creating shared value
- Drucker (1999): value is important to explain the action of firms: "The starting point [of management] has to be what consumers value" (p.85)
In 1954, Peter Drucker offered one such solution (to why does a firm exist) in his book, The Practice of Management, (HarperCollins). “There is only one valid definition of business purpose,” he wrote unequivocally: “to create a customer.” It is the customer,” Drucker wrote, “who determines what a business is. For it is the customer, and he alone, who through being willing to pay for a good or for a service, converts economic resources into wealth, things into goods. What the business thinks it produces is not of first importance—especially not to the future of the business and to its success. What the customer thinks he is buying, what he considers ‘value’, is decisive—it determines what a business is, what it produces and whether it will prosper.” vs Friedman 1976 “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.”- Vargo and Lusch (2004, 2008): FP10 "Value is always uniquely and phenomenologically determined by the beneficiary" i.e. the customer only determines value - value is subjective - #tweet Why is #Value important? #value is personal, social, emotional, complex (many dimensions), dynamic (sensitive to new information) >> $$,#gdp, behavioural economics (irrationality), design, customer satisfaction
Source: Forbes 17.07.17 Making Sense Of Shareholder Value: 'The World's Dumbest Idea'
NB: ^^ - see References.
What is value?
- Steve Jobs says Apple, he built to "delight customers" and "inspire employees" (Isaacson 2011), I say in Ferrers (2013, p.vii), "I can think of no better definition of value".
- Value has an audience. Tabitha, the management consultant who wants to know about value, and apply it in her Market Research work. Andrew who wants to report to Government on what is the value of Australian Research? Michelle who wants to report to Government on the value of NCRIS (research infrastructure) investment.
- compare value to profit, GDP, productivity, cost/benefit, risk/return.
- Value (for consumers) has multiple, conflicting meanings e.g. power vs beauty, function vs reliability, price vs time (see Value Proposition; H2 below).
- #tweet 2006 Value explains consumers' decision to adopt new technology. A successful tech adds value. #LBOV http://web.archive.org/web/20070830094840/http:/www.thejoie.com.au/phd/
- #tweet 2006 A failed new technology/product/policy fails to add #value. Little Book of Value - #LBOV
- #tweet V is a grounded theory to explain why consumers adopt new technology, such as smartphones.
- Design Behar (2017) vs Design Rams (1970s) - Is my design good design? Behar. 30.1.17 Fast Co Design. Value and design cover a lot of similar ground e.g. Value/design is simple, aesthetic, useful, long-lasting. Click the tweet pic (link below), to see Rams 10 Principles of Good Design (late 70s).
Value Propositions: an evolution
- P1: Value is dynamic
- P2: Value changes on the assessment of new information
- P3: Value is different for different people
- P4: The time to make an assessment affects value
- P5: Value degrades over time
- P6: Value is not measured in dollars; includes time, effort, hassle and pleasure and is measured in attitude, and purchase decisions
- P7: Value is path dependent
- P8: Value may involve input from others
- P9: Value causes purchasing
Figshare, p.122-144.2013 : Published PhD thesis at
- Hyp 1.Value is closely linked to consumer actions with new technology.
- Hyp 1a.Losing value is more closely linked to action than gaining value.
- Hyp 2.Value has multiple and conflicting meanings.
- Hyp 3.Consumers express value experiences as attitude.
- Hyp 3a.Consumers express attitude at two value levels; as relating to multiple specific value meanings and as a single overall attitude summarising value generally.
- Hyp 4.Closing is an important value practice and simplicity is an important value meaning.
- Hyp 5.Value is more closely linked to emotion than goals.
- later data: Spin Out, Where are the jobs?, lessons from smartphones, NBN
In the smartphone investigation, consumers described many types of value in their phone. More than 80 types were identified which I condensed to 12 value dimensions. These value dimensions are evidence of value as complex. However, consumers also exhibited an overall attitude, an overall value, as a simple emotional vector; positive or negative, strong or weak. They were happy, very happy, unhappy, very unhappy. I could trace these attitudes against multiple value dimensions and overall. The overall attitude demonstrates value is simple. A consumer remembers this attitude and can express a simple opinion about a value target, an object of value. But they may have multiple attitudes relating to aspects of their smartphone - for examples, its size, its price, how it makes them feel, its usefulness and so on.
An advanced examination, still incomplete is about holding multiple incompatible attitudes. Consumers could hold positive and negative attitudes simultaneously - "I love my phone, but the price is bad". (add quote). But it seemed problematic if the attitudes were both strong and opposite. I postulated that this could create tension which needs to be defused or could lead to some problem later. A similar example might relate to a cheating partner. While still loved, the pain of being cheated on makes for incompatible and unstable emotions. While a person can live with some faults in a partner, strong negative attitudes make for too much tension. More investigation is needed in this area.
Value is slow/fast.
Value is a process and an outcome. The process for smartphones is modelled (see picture) here. The model suggests new information shifts value, rather than consumers actively deciding. Information causes a flick, or shift in attitude, almost instantaneously, like a discharge of current as potential builds up across an electrical gap. And maybe brain chemistry is something like this. Thus value is fast as this spark leaps the gap and a consumer's attitude shifts; "yes I will buy it" where previously they didn't know, or were undecided. A similar realisation might come when voting in an election. Faced with lots of information, staring at the ballot paper, a voter compresses all that complex information into a single attitude, yes or no, and votes. Another similar realisation might be when a person realises they love someone. Click. Ping. After several or many interactions, of greater or lesser intensity, a person takes a leap. A light goes on and they are not quite ever the same again.
In marketing textbooks (add cite) a decision is shown as a box, as an activity. This research (Ferrers 2013) suggests the shift in value is an instantaneous leap from one state to another. From a don't know to a do know. For undecided to committed. In this sense value is fast.
While relevant information and experience is accumulating, with no shift in attitude, value is slow. In the smartphones value process model, there are a number of processes which take place, including: exploring, comparing, listening to messages from social network. A buildup of tension, like static, is value occurring slowly, until in a flash of discharge, the value potential is crystallised into value action. The slow part of the value process I characterise as 'waiting'. The fast part of the process I characterise as a value shift, or a shift in attitude. A single piece of information can trigger the value shift, like the straw which broke the camel's back.
- Subject, Object, Verb -> Value/r, Value Object, Attitude; I love my wife, texting just shits me, iPad Pro is too expensive.
- Examples of value objects; this book, that bird, my wife, Spin Out; a movie, Trump
- "A cynic... knows the price of everything and the value of nothing... and a sentimentalist... sees an absurd value in everything, and doesn’t know the market price of any single thing"; Oscar Wilde - Lady Windermere's Fan, Third Act.
- how was your day? e.g. first day of school, after work.
- what did you think of X? e.g. La La Land, a movie.
- what does X mean to you?
- compare: what's important to you? or Describe X.
- compare: thesis question - how did you come to have your X (smartphone)? i.e. tell me a story
- Aristotle (Gordon 1964)^^, Adam Smith (1776), Ricardo, Marx, Bailey (1825), Baudrillard (1985)
- Schumpeter, Porter and Kramer, Kim and Mauborgne (2005), Vargo and Lusch (2004; co-creation)
- Mick and Fourier, Richins (1995), Zeithaml (1988), Flint et al. (2002), AMA
- Value vs disruptive innovation, vs agile innovation, vs diffusion of innovation, vs open innovation, vs design, vs lean innovation
NB: ^^ - see References.
The impact of value: Value Management**
- listening to customers and understanding what they value, then delivering that to them. This dialogue, I call the 'Value Conversation'**. It is about what is important to the customer, what are their priorities, what are their needs, how you can help, what is changing, how are they feeling, and influences, both positive and negative.
The impact of value: Value Leadership**
- understanding customers and delivering what you know but they don't know they value e.g. Apple; "we don't ask customers what they want. We can't show them an iPad and expect a sensible opinion when they have no context for assessing what it is, and if it is any good for them". (paraphrasing)(add quote)
NB: ** - see Glossary
This is where you can put examples of things which don't fit (easily) with value. For instance, "I didn't think it was a good idea, but I bought it anyway".