Rethinking Value

I've been inspired by Jeff Jarvis' post in the HBP Davos Diary about Journalism's Crisis to become a bigger pain in the butt.  In his post, he argues that journalists failed to be persistent enough to get people to pay attention to the issues that led to the economic crisis, whether through their own reporting, or through curating the questions the experts were posing all along in their blogs.  Whether or not you agree with his conclusion that this is a journalism issue, he makes a good point about not sitting on the sidelines when issues are known.

My post on measuring innovation highlights one of these issues.  The post generated some great comments and interesting off-line discussions, and I've come away with a few general conclusions. First, it seems that the majority of people are falling I've been talking to are falling into two camps.  There are those who feel that innovation can, and should be measured, and feel that the quantitative metrics currently at our disposal can be used to accomplish this.  Then there are those who feel that when something new is developed that has no current benchmark, then measurement is irrelevant and intuitive judgment is best. I don't fully agree with either, and think it is the responsibility of all of us who work in the field of innovation to help our clients to develop new metrics that appropriately blend the best of both perspectives.

I was happy to find a few people who agree with me, and who are also actively working to develop new ways to think about the value that is added to a company or market. David Hughes pointed to a resource from the UK that talks about measuring Value Added (VA) by businesses.  What I found interesting is that they are taking a fairly straightforward, overall measure of how well a company is doing as compared to the previous year.  To me, the point is that ultimately we should be looking for holistic business success, regardless of what we can or can't measure individually.

Some other interesting points also came up in discussions.  Can you quantitatively project the value of a human process or culture change, such as customer service focus, before you adopt that process?  While a dollar value may not be appropriate in that case, a different assessment of the value could be developed.  Was the value of the iPod and its associated services projected before they were launched?  Maybe not, but it could have been; if not against the new category that was not yet created, then qualitatively against how well it satisfied consumer needs.

My point is that we need to start rethinking our current mental models for how we measure value.  It's not all quantitative, and it's not all intuitive, and it's up to us to prototype new methods and iterate them until they can be generalized and widely adopted.  We can't get there if we reject the possibility that they exist.  Isn't that what innovation is all about?