Most dictionaries define ‘value’ as usefulness, importance and worth. In other words, the regard that something deserves. It is an elusive and complex concept and many practitioners and governments are facing the ‘value dilemma’, where facilitating one aspect of value creation harms another. In this post, I will reflect on the meaning of value and how a holistic view towards it is becoming the mantra of accountants (See also CIMA — The emergence of the chief value officer.)
Some economists see value as the intrinsic worth, embedded in goods, which are produced, ‘objectively’ priced and exchanged, readily available for consumption. Only recently was ‘value co-creation’ coined in marketing and strategic management to mean a collaborative process of imagining, articulating and generating something new.
Co-creation empowers managers and emancipates employees and customers, giving them legitimate competencies to participate and make meaning of value. The term 'open source', originating from software development is now synonymous of openness, accessibility and sharing, which is the essence of co-creation – a dialogue, peer-like conversations, leading to decisions.
Social media, of course, is the obvious example of how boundaries between producer and consumer are getting blurred. They use our cognitive and emotional diversity to elaborate on problems and seek solutions. They can co-create and co-destruct.
Influence Value and Social Value
In her latest book Reimagining Capitalism, Harvard professor Rebecca Henderson talks about fixing a broken system. She sees businesses as capable of changing the trajectory and restoring balance. But it is accountants, who ‘hold the key to saving the civilization’ and need to re-write finance rules. She points directly of the Environmental, Social and Governance (ESG) metrics, as an example of the new approach to accountability and sustainability (to learn more about our thought leadership programme that explores accountancy and sustainability, see here).
Of course, there are numerous challenges with measurement, comparability, reliability, integration and communication, but the end goal is to change the global investment practices and prove what we already have indictors for – a positive correlation between ESG and long-term financial results. A prominent example is the he Nobel Peace Prize laureate Muhammad Yunus and his Grameenbank, lending micro credits to poor farmers and achieving higher recovery rate than most other banking institutions. To serve a social cause, Muhammad Yunus builds on human rationality, combined with ingenuity. He has trust in humanity and created a system we can reciprocally trust. He reminds us that, in the long run, we cannot and should not insulate businesses and profit making from political, emotional, spiritual, social and environmental dimensions of our lives. This is harmony value.
Enjoyment Value and Trust
As accountants, we strategize, observe, socialize, synthesize, decide, act, analyze and learn how to make an impact. I know many accountants who are often in the ‘flow’, a state of being completely engaged in a difficult task to the point where they lose track of time. Such joy at work has emotional value, but also the potential to build a better future, one that integrates all these positive dimensions of value creation and puts trust as a solid foundation of the society.