If value is always fleeting, forming and decaying; what is the real question to ask about ‘value’?
What is value?
How do you measure it?
How do you grow it over time?
I have asked these questions to a few leaders in the context of their brand, business and products and their answers hinted at ‘the eyes of the beholder’, the ebb-n-flow of consensus, the math at hand and the probability of that math repeating itself in the future.
While value exists, the ability to have the alchemy at hand and at will is quite a different monster to tackle – just like the Philosopher’s stone.
Then why bother? Let’s just move on with an approximate idea, call it to consensus and consider it done.
Well, it’s not that simple.
With the RESET set in motion by the public enemy no.1, the COVID Virus, a few things which were rolling so far to our heart’s content, without ever reaching out to the source of it all, has been brought to question. To name a few – globalization; global trade supply chain and value chain; the services industry; automation and employment; technology, data and localization; resource restraint and recyclability and so on. And how could we ever forget the forever rising quarterly growth, profit projections and expectations? Amid all of this chatter, clutter and confusion, we must find our place on the platform we call ‘the future’ or if you like calling it ‘the new normal’. Whatever we call it, the future will be made up of growth. Right?
So where to go for this growth? How do we measure our part and product in it? And most importantly – growth of what? The price of things has proven to be a glittering facade. So now it is time to find the point of things.
Were we measuring it wrong all along to have met this fate post COVID? The pursuit of value has been a dizzying drama ever since the virus broke loose – of both ‘value’ of things we held so dear and the ‘valuation’ of things with fancy names like ‘unicorns’, ‘decacorns’, ‘greenshoots’ – you know it all too well. Be it the trade tantrums or the profit and purpose tug-of-war – question is - are we geared up to chase the right goals?
According to a report published by the McKinsey Global Institute in January 2019, titled Globalization in Transition: The Future of Trade and Value Chains, “globally, services account for almost two-thirds of GDP and half of all jobs”. It observes five structural shifts and particularly highlights the growing role of services in the future of global trade. This report calls it “the growing (and often unmeasured) trade in services”. The report observes, “cross-border services are growing more than 60 percent faster than trade in goods, and they generate far more economic value than traditional trade statistics capture”. The report also estimates “cross-border flows of intangible assets could be worth upto $770 billion annually”; and, “the main sectors generating cross-border flows of intangibles are technology (about $230 billion annually), healthcare and pharmaceuticals (approximately $160 billion), and consumer goods (about $110 billion)”.
To my mind, speaking of our new-found connections with each other and services over remote working, 4G (existing), 5G (upcoming), data and privacy, deals and promotions - could well be worth reorienting.
“The potential value of free digital services trade ranges from $240 billion to $3.2 trillion annually”. (source: McKinsey Global Insititute Report)
Most of all, I applaud the report for addressing the elephant in the room and attempting to measure the ‘taken for granted’, especially in this gloomy economic outlook. Particularly if as the report says, “accounting for the various ways they create invisible value, services would make up more than half of global trade”. (source: McKinsey Global Insititute Report)
It makes a very good case for revisiting and reflecting on our measurement of value. Simply because we have already witnessed the unsustainability of our previous math and probably there is a big role to play for this missing piece, ‘the intangibles’ in our future. I am interested in a cross tab between this source of economic value and the future of work in our efforts as the RESET tunes to the future.
For those of us who feel they have had their math right all this while – great going. But I urge you to revisit your certainty, risk and probability just for a moment. It might appear like a waste of time, digging into the fundamental notions surrounding ‘value’ and easier to move on with some historical reference to where it was in the past. But trust me, there is a whole new cultural change and opportunity to be unleashed in doing so.
Big picture? Insight? Genius? Gamble? Or a gambit? Whichever label you choose, in my view revisiting ‘value’ is the most important step in our new journey to create value. Almost like finding the Philosopher’s stone. So let's begin by asking what's the point of the things, before we ask the price and pursue them for value.
For you, what is the real question to ask and apportion around value?
We’d love to listen to your thoughts.
© 2020 Narrativ.Design. All rights reserved. The author is the founder of Narrativ.Design. He has worked in various strategic roles across Asia, on local and global brands for over 15 years. He is fluent in Bengali, Hindi and English. You can reach him at authors@narrativ.design. Image: ©Pathfinderabhi