Fingers pointing and lines in the sand

I love stories.  They help crystallize important lessons using basic words.  I recall a Zen Buddhist tale describing the interaction between a student and master (teacher).  I paraphrase the dialogue:

Student: “Master, what is the moon?”

Teacher: [Raising his finger and pointing] “See.”

Student: “Ah, yes.  The moon is a finger!”

Zen offers us important lessons.  Zen Buddhism has created many practices that help us gain deep insights into nature, the universe, and being.  For this reason, I admire its cultivation of a garden.  I always appreciate the inherent “tension” / contradictions in a Japanese Zen garden: the contrast between individual and whole, simplicity and detail, natural and artificial, temporal and permanent.  The  elements are basic: sand, rocks and plants.  Yet the garden is simultaneously small and large, concrete and conceptual.  The rock may represent an island or a planet, the lines in the sand may be interpreted as waves or cosmic flows, a pruned tree or shrub an earthly feature or the heavens.  The patterns raked in the sand, retraced each morning, point to something greater — a higher goal or state.

Great teachers / “What is a business?”

I’ve been blessed with wonderful teachers in my life.  They taught me valuable lessons. My late mother reminded me to be careful when speaking.  “Mind your words!” she advised me.  Important lesson.  My father taught me to focus and be prepared.  He firmly “encouraged” me to remove distraction, have my materials ready and stay focused when doing my homework.  Powerful lessons.  The late Robert Dolezal, my high school English teacher, told me I couldn’t dislike a novel unless I actually read it!  A simple lesson to form a considered / credible opinion.  Dr. Paul Cousins, my PhD research supervisor, modeled intellectual clarity and academic integrity.  They are my “Zen masters”.

I read Peter Drucker’s business books for the above reasons.  He is concise, informed, and sensible – a Zen-like business author. Over a half century ago, Drucker (1955) clearly stated the reason a business [company] exists:

“There is only one valid definition of business purpose: to create a customer …There may have been no want at all until business action created it … by advertising, by salesmanship or by inventing something new.”

In other words, a company makes decisions (its value strategy) to deliver products / services (its value proposition) by doing some work (its value-added production).  Value underlies the businessValue as a verb, noun and adjective.

The finger is not the moon!

In the recent HBR article “Digital growth depends more on business models than technology”, Johnson (2018) confirms that value drives business success.

“Every successful company, whether it knows it or not, owes its success to its business model. I explained this in an article that was published in Harvard Business Review in 2008, before any of those companies began, and, now, 10 years later, that still holds true, as more and more of the business discourse is focused on digital transformation. A digital platform, or a digital solution, may enable a new epoch of transformative growth, but when you get under a company’s hood and look to see what’s really driving it, the engine of transformation turns out to be its business model.”

Increasingly business writers conflate the tool with the objective.  They confuse the finger with the moon.  As Johnson (2018) confirms, the business model, not technology, drives transformation.  Value is key.  Blockchain applications, artificial intelligence technologies, digital transformation efforts, knowledge management platforms, and corporate learning / development programs may be the enablers but not the root cause of success.  They are fingers pointing at the moon — tools supporting business value — not ultimate value itself!  They are just the elements forming the overall garden.

(Regaining) Focus on business value

Lean management asserts that value flows from upstream suppliers to downstream customers.  My PhD research identified ‘value gaps’ in value flows in UK and US value chains.  To detect and eliminate these value gaps, I created the Integrated Value Process (IVP) (see An Empirical Framework for Evaluating, Implementing and Managing a Value-based Supply Chain — ProQuest publication number 3121355).

The IVP framework consists of (a) ‘meta’ definition for value, (b) an inter-/intra-organizational process to conceptualize, configure and implement a value-based strategy, and (c) five value ‘first principles’ underlying the value stream.  Lean management uses the customer’s definition of value to determine whether a given activity is value-added.  These value-added activities form the three parts of IVP: value conceptualization, value configuration and value implementation.

In order to transform a company, executives need to change one or more activities forming the Integrated Value Process.  Don’t let your company become the place where value goes to die.  Use the IVP framework to guide true transformation of your company and value chain.  Don’t confuse the finger with the moon!  Cultivate your business Zen garden.

Please email me at andrew.swan@columbia.edu or go to my website http://www.andrewjswan.com if you’d like to learn more about value theory / definitions, value chains / streams, value management, and collective intelligence. I’m passionate about these topics.

Additional article:

Value-added Knowledge Management (KM): Whose value anyway?

Sources:

Drucker, Peter. The Practice of Management. 1955.

Johnson, Mark. “Digital growth depends more on business models than technology.” Harvard Business Review (December 2018)

About the Author

Andrew Swan, PhD is a multidisciplinary and cross-functional integrator of strategy, processes, and information technology. His focus and expertise center on helping executives increase value creation and optimize value flows in business. Dr. Swan holds four degrees in Management, Accounting & Finance, Information & Knowledge Strategy, and Computer Science from the University of Chicago Booth School of Business,  the University of Bath School of Management, and Columbia University.

He frequently publishes articles on value chains, value streams / flows, and Integrative Value Management on his website www.andrewjswan.com. Dr. Swan created the Integrated Value Process (IVP) Framework to help companies optimize the flow of goods & services, funds, and information across their respective value chains for multiple stakeholders. He can be reached at andrew.swan@columbia.edu or at +1.773.633.7186.  He lives in Chicago.