Value is an impressive word. People talk about value creation, value propositions, customer value, value chains, enterprise value, shareholder value, value management, etc. It sounds like they know more than the rest of us. But, what is the value of all this value?

Many enterprises have a strategy to create value. How do they define and measure this value they are creating? Different enterprises have different definitions. Usually, they define some value that will be there at end of the strategy, rather than a built up value that is managed in the execution of the strategy.

Some say they provide a good customer value proposition. Often customer value seems to be sales hype rather than a substantiated number.

Others talk about value chains, without a specific definition of value. Most value chains are contrived methods to produce a product. We do not have working value chains within the enterprise, so how can we talk about value chains across enterprises.

Value-based management seems to be based on many ways of valuation. We see how our many methods of business valuation, all give widely different numbers. We have confusion between stakeholder value and shareholder value. We hear of value-added. But, what value is added on what value?

So, again, what is the value of all this value? This is one of the issues that we are discussing at the Business Change Forum, in order to define problems with conventional methods and discover breakthroughs in management of the enterprise.

Is it possible to have one basic definition of value that we all can use to manage our enterprises?

We say we have a strategy to create value. Then there must be components of the strategy that contain value. What if we could define each point that value is created across the whole enterprise and plan and manage the strategic value from the bottom up? We could establish a value-chain for collaboration within the enterprise.

We all know that we incur costs in executing a strategy. What do these costs relate to? Is it possible to relate the cost of what we are creating to the value we are creating? Could value then be a manageable number that we can use in day-to-day enterprise management? Could the difference between value created and the cost of creating the value, be a manageable value-added. What would positive value-added tell us? What would negative value-added tell us?

If we can break down the value we are creating in a strategy, can we understand the value of what people do in carrying out a strategy? Can we understand the value of new capital development embodied in the strategy? Can we optimize the cost incurred in creating value against the value created to maximize value-added? If we were able to understand the value created through our strategy, could our stakeholders or shareholders track their portion of that value? Could our corporate governance, accounting, internal evaluation, and management reporting track everything the enterprise does to the strategic value being created.

What if our business partners were also able to track the value being created in their strategy through a comparable value chain? Could a value chain across enterprises be based on a common understanding of value and costs to truly maximize shared value and minimize shared costs?

If we could do all this, then value would become really valuable. Alas, we can never really manage value using our conventional methods. We can chase costs around and use the many definitions to calculate different numbers for value, but we cannot add value to value to make value really valuable.

We need to come up with a new breakthrough that makes value a manageable part of the enterprise. The breakthrough must enable us to do things we cannot do now:

> We need to structure our enterprises in a way to identify how and where value is created and measure the creation of value
> We need to structure the capital consumed in creating value for professional management and costing against the value created
> We need to develop strategies for producing things of value that add up to value created
> We need to manage strategic development to add value to the value being created
> We need reporting systems that measure and report value and value added and track strategic value creation
> We need to relate our value to the value perceived by our customers and the value we perceive in our suppliers and contractors
> We need to relate the capabilities of managers and staff to the creation of value and help them develop more valuable capabilities

It is only when we put real value in value to base the enterprise on creating value that our personnel, management, stakeholders, investors, collaborators, customers, and regulators will understand how valuable we really are.

Harry Greene is American, with over 40 years