Anatomy of A Value Chain

What is Value? What is a Value Chain?

The term "Value" seems ambiguous ... It can have many meanings to many people and it can also have the opposite meaning to two people regarding the one subject.


Is it like beauty? Is it a characteristic of an object/outcome that is perceived or felt by the observer?


How can you have clarity around "Business Value" if value itself is so difficult to pin down? 


I would liked to propose a line of thought that I have found useful in establishing a way of seeing value, describing value and focusing on value.

I would like to begin with the concept of the organisation and then extend this to the complete view of value.


An Organisations is a social group that distributes tasks in order to achieve a collective goal

Operating on the basis of specialisation & synergy, the goal of the organisation is only one side of the story. The goal exists because there is a need somewhere to consume the goal. Eat bread, wear clothes, open a bank account etc.


Specialisation and Synergy implies that there are many parts that when brought together in an organised fashion produces the ultimate goal. Each piece of the equation contributes to the goal - however, in and of itself is not the goal.


On the consumption side, there needs to be a set of conditions in order for the consumption to take place.


There needs to be a desire to consume the goal. This desire will ignite the flame that brings into being the action. This action should have an underlying will that is driving the consumer to attain the means to transact and consume the goal.


I tend to think of Value as being the whole system in operation 

• Desire for possession of the achieved goal & 
• The organising group or individuals that achieve the goal.

Value is only ever achieved once desire has been satisfied.

The value chain has 4 parts:

1. The Desire for an outcome/product
2. The Promise to meet this desire
3. The Organisation of effort to fulfil the promise
4. The will & means to act on the desire

Delight is achieved once desire has been adequately met - as expected & as promised. I use the term delight with respect to the happiness that is felt by the consumer when they consume the achieved goal and experience this consumption as they had hoped and expected.


For example - a mother feels delight as her little boy "smashes down" the white bread with the Wiggles packaging, comforted by the fact that the Low-GI make up of the ingredients will provide an optimal & healthy release of energy in her "little treasures" body while he is at school today. I like to think of this as the moment of delight.


This is the point of value realisation, value manifests, comes into being - all of the activities that went into establishing the conditions for this moment played a part and formed the value chain. 


Notice, that value manifests outside in the real world - it does not manifest in any of the organisations who's collective and organised efforts played a crucial role in the moment of delight.


The packaging that is attractive to an under 4 year old, the Low-GI ingredients and receipt that went into the bread, the shelving that presented the attractively packaged item at the eye level of the under 4 year old, in and of themselves - none of these activities/outcomes produced value. However, the linking of all of these with the direct purpose of producing the moment of delight - brings value to each link in the chain.

Therefore delight is the manifestation of value

I see Value Creation as the ability to see the opportunity for the creation of the links and then follow through with the capability to manifest these links for the very first time. 


Once the links have been connected and operated for the very first time, and the moment of delight has been achieved - the value needs to be kept alive - continuously fulfilled.


Desire is fickle as it has close emotional ties. Emotions are affected through out the day and over a life time. So, that which you desire today may not be the same as which you desire tomorrow or in one, two or even ten years time. Your life conditions and emotional state are continually changing your desire. The boy will grow up and no longer like the wiggles - what then. A new improved health producing formula and popular fad will become wide spread - Low GI 2.0 ... what do you do then?


The links in the chain all play a part in the final outcome. Based on the theory of constraints - the weakest link brings down the whole chain. If the boy dislikes the wiggles or it is uncool to be eating the wiggles bread among his peers - that is now the weakest link and it will result in a moment of revulsion at the breakfast table as the - now 6 year old - looks at the bread with shame or disgust and pushes it away. Mom won't buy that brand tomorrow.

The dynamic of a value chain is always changing and there is a continual battle for survival.

Value Fulfilment, in this light is the ability to detect movements in desire, and adequately respond with modifications to the organised fulfilment - continuing to produce those moments of delight.

In order to bring into being for the very first time - Value and to keep the moments of delight alive I see the following capabilities as being central building blocks.

Clarity of thought

The ability to see things for what they are. Decomposing items/concepts to their most simple form (any more simple and complexity is introduced). Being able to differentiate between, information, emotional opinion and facts.

The power of imagination

The mental ability to simulate configurations of concepts - to execute these simulations. To cross pollenate concepts to produce new concepts & reconfigure the composition of existing and new concepts and again … execute this new simulation    

Initiative & Courtage

Self belief and a burning desire that urges action. Seeking out possibilities for manifesting the new conceptual model.

The Power of influence

Establishing the conditions that attract behaviour changes by altering the environment; thus bringing into existence the manifestation of the conceptual model.


Today - I cannot see anything other than People - that possess these capability building blocks.

People are the Source of Creating & Sustaining Value

People, to my mind, seem to be the only "things" with the potential of creating value. I will go further and say, that people are also the only "things" that can dance the "dance of desire and fulfilment" that keeps the value chain alive.

If you subscribe to this hypothesis - does it not follow that Institutional Leadership and Talent building are at the core of value chain existence and progress?

Cultivating collective leadership & nurturing growth in talent. Establishing clarity of purpose supported by powerful principles & Values based on honesty, truthfulness and accuracy. Establishing the conditions within which people can obtain mastery of their duties and operate autonomously and channel their enthusiasm and passion.    

Imagine the possibilities that go untapped due to the apparent pandemic that is the Cost Accounting mindset that classifies people as expenses therefore, promotes a line of logic where by a reduction in FTE's results in a reduction in costs which should increase profits

Or 

Organisations that are being run by the few for the personal benefit of both their bank accounts and ego's, creating an environment that restricts passion and enthusiasm to flourish