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Jean MICHEL & Roy WOODHEAD
In “Innovation Engineering – The Power of Intangible Networks”
ISTE, Hermes Sciences Publishing, London, 2006, ISBN 10:1-905209-55-X, pp. 57-83
CONTENT
1 - The Straight Jacket of selling Training and Certification agenda
2 - What exactly does Innovation mean?
3 - Value Management, an already long history
5 - Potentialities of Valorique in relation to the innovation
6 - Digital technology, networking and an ability to innovate differently
To evoke, concepts of Innovation and Value Management (VM) could be regarded as a tautology. For us VM is management directed towards, and in response to, notions of “Value” and this is more important than a strict adherence to a prescribed methodology. A distinction in practice will be discussed in the paper that shows how some see values driving an innovation management agenda. Such an approach we will call “Management by Value” (MbV). In opposition we see the dominant attitude which is focused on the value-outcome; this we will call “Management of Value” (MoV). Whereas the “Management of Value” is a weak form of “the ends justify the means” the alternative argues “the means always lead to the sustainability of the ends”. It is obvious for the specialists in this discipline, or a philosophy in action that is VM, that practice is located in the field of the innovation [WOO 04] [YAN 04]. It is not certain however that this ‘obviousness’ is always recognised and many proponents cite examples of ‘better communication’ or ‘joined up thinking’ as what VM is about and in so doing fail to acknowledge how it engages with both society and nature.
The highly divided attention of practitioners links VM and innovation to either short term economics or long run economics but again fail to offer a comprehensive explanation of why such may be the case and certainly fail to link the outputs of VM to an consistent theory of value (e.g. Ricardo’s theory of rents or Marx’s theory of labour value or Adam Smith’s theory of the Invisible Hand). Because a theory of value has not been adequately defined in this field we anticipate many will be forced to contemplate the implication of the distinction between “Management of Value” and “Management by Value” to the relationships between established techniques, practice and the results that flow from such interventions.
When considering the pedagogy in VM, it is necessary to regularly point out good principles, the fundamental ones, so as to ground VM in ‘how shall we believe?’ and found education, research and enquiry at its core. The prime objective of this chapter will be to give access to key elements that characterise this “Management by Value” view of VM and to make explicit of some the potentialities it brings with particular relevance to processes of innovation, which some actors seek to facilitate. To distinguish this difference we will refer to MbV, “Management by Value”, rather than VM, which we believe is largely practiced as MoV, “Management of Value”. The fact that we put forward such a distinction means we can now move away from defending training programmes and move towards a richer pedagogy. We will also argue for a shift away from the strict adherence to a prescriptive methodology. We will cite Schumpeter’s notion of “Creative Destruction” and the Digital Revolution as a cause of both ending a ‘one recipe facilitated workshop’ logic and point to a need to retain the key functions born out of Value Analysis (VA) and Value Engineering (VE) bred into VM. We argue that we should not perform them as before but from within a richer framework built around ‘research’ and ‘participatory inclusion’. We shall challenge VM and its narrow view of what constitutes as being “value” and widen it in a ‘best fit’ and ‘ethical’ notion that can only be articulated through sensitive and empathetic research based enquiry. To distinguish such an approach we have used the notion of “Valorique” that is already in use in this field.
1 - The Straight Jacket of selling Training and Certification agenda.
The training agenda in this field of VM has made many recoveries during the last thirty to forty years. Generations of methodologists, convinced of the capability of innovation through an analysis of value and function, sought to convince owners of companies and financial comptrollers to invest in this field, and to implement such practices in support of progress and competitiveness. ‘The cost cutting’ badge has shone far more brightly than a true search for value. One could naturally question our interest in putting forward this work which suggests ‘cost cutting’ is not the only view of value available.
Several reasons cause us to return to our history and seek to deepen our understanding of it. It is on the one hand a fact that innovation, like the tides that comes and go, are cyclic and therefore systemic. It is marked by periods when one ‘core technology’ dominated strategic agenda which is then followed by other periods when such ‘core technologies’ are eclipsed, pushed aside, and demoted. The steam trains gave way to electric trains and the ability to travel in cities has been challenged by the success of cars and the resultant traffic congestion. Similarly, the heavy sack of letters the post man would carry is now reduced by the phenomena of email. The way society functions is transformed by technology. Today a movement appears to be revolutionising innovation [PER 01a], [EUR 99] and the difference will enable a durable or sustainable VM if managed adequately. This is our polite way to warn we are calling for VM to adapt. It is important to recall how approaches to value, function and innovation still remain potentially rich sources of an innovation-capability.
In addition, it is interesting to consider the fact that these same approaches to liberate greater "value" have been known for many years and that a change which is not seen as having a ‘pure form’ is the basis for change resistance which exposes the true character of the field’s ambition. It seems as though we can only sing but a couple of songs and so repeat them over and over as well as trying to get the audience to call out for them to be sung. One operational model (i.e. The Job Plan) passed from Value Analysis (VA) through Value Engineering (VE) and to Value Management (VM) and is now concerned with the practices of creativity and consolidation within the management of the organisations, rather than within its processes and products as in yesteryear. Instead it became a consultancy tool that lost sight of an integrated role within the organisation’s strategic planning and this deserves to be examined so a new potential can be created.
Finally, and it is undoubtedly on this ground, that this text aims to bring something original that will enable the transformation of organisations. It’s the realisation and recognition of the extraordinary development of digital technologies and better information, communication and new working practices that impact organisational design and social networks. It is time for VM to be directly confronted by the Digital Revolution. It is necessary to look further into possible synergies that may exist or could be developed, between a more informed view of VM and its embodiment into the digital environment. We would see more integration and support for innovation by combining an intention that links a more considerate method of VM to a relationship between innovation, function and value, and opportunities emerging from the growing digital infrastructure.
2 - What exactly does Innovation mean?
Before focusing on the relationships between Value Analysis (VA) and Value Management (VM) and innovation, we need to examine what is generally understood by ‘innovation’ and to highlight certain characteristics of the processes within innovation and on which a new approach to VM could act. In its broadest sense, innovation can indicate any change introduced knowingly into a solution by an agent and for the goal of greater effectiveness and better use of scarce resources.
Similar definitions, to which many specialists adhere [PER 01a], emphasise the idea that innovation is the insertion, diffusion and the deployment of an ‘invention’ into the fabric of socio-economic contexts. For example, when Henry Ford enabled mass production the invention of the ‘Model T’ triggers new ways of assembling cars, and need for road building, and car parks and so on; our way of living is transformed. In this text ‘Innovation’ is thus far larger than ‘invention’.
This distinction highlights several interesting features:
1. The voluntary introduction of a change, innovation, and intervention that alters things for the better.
2. Determination or will of an actor or authority who ‘innovate’ and the searching for a more efficient use of the resources.
3. The knock-on effects of an invention being woven into the fabric of society (i.e. the innovator's role).
4. The role major innovations play in shaping society, our priorities and values and how we form our own identities and beliefs.
Value Management declares its outward gaze to be fixed on principles of innovation and increased value. But the distinction between invention and innovation is that optimum solutions, or elegant solutions, are answers to problems that better satisfying varied needs. It is from this ‘diverse range of needs’ perspective that the work of VM is more often than not practiced as ‘Management of Value’ (MoV) and consensus seeking and sense-making are carried out with a limited number of ‘internal people’. One can read various articles about VM which use words such as “consensus” and “customer involvement” but such are limited by the prescriptive need to run VM studies in the form of workshops which often prevent widespread involvement and so minimise the actuality of what the words mean in practice.
Schumpeter [SCH 43] brings forth the concept of “Creative Destruction” as an old core technology is pushed aside and firms unable to adapt, wither on the vine like a grape missed by the pickers. The digital phenomenon presents the same “Creative Destruction” to VM as the old training agenda and workshop technologies face the cyber challenge. Schumpeter distinguished five characteristic situations of innovation:
1. The manufacture of a new good.
2. The introduction of a method of new production.
3. The realisation of a new organisation.
4. The opening of a new outlet.
5. The conquest of a new source of raw materials or semi-finished products.
For Schumpeter, all these types of innovation are more concrete through "the execution of new combinations" introduced by entrepreneurial and dynamic heads of companies. These senior managers are agents responsible for their firms and indirectly for society as economic development unfolds or recedes. Just as the successful companies of yesteryear gave way to today’s “Microsoft” and “McDonalds”, they too will be pushed aside as they are trapped inside their own outdated worldviews and rigidified operational procedures. Value Management is identified with characterisations of innovation but its success is the cause of a promotion of its exacting methods and its standardisation so as to enable training programmes. VM enables an entrepreneurial spirit in organisations and seeks to rearrange the factors, or means, of production more efficiently and more effectively. Yet it too has not embraced new core technologies and so faces a Schumpeterian destruction unless it can apply innovation to itself.
It is still usual to distinguish two types of innovations, according to whether one seeks to respond to the market and customer expectations (i.e. market pull). The alternative is where scientific and technical research enables new inventions to become innovation (i.e. technology push). Technology transfer is where an existing technology is applied in another field and offers a firm revenue from licenses. Again VM has failed to capitalise on enabling this to happen more systematically. Such innovating achievements are not always founded on new scientific knowledge but can be of socio-economic interest and as such are often in response to the realisation that customers elsewhere would benefit and so their market pulls the invention towards their innovation. The second type of innovation is based on the discovery or creation of scientific facts which were not known before. Here the properties of things are explored to see how they might be useful.
In the two types of innovation “the inventor intervenes into innovation as someone recognises both a need and a relevant technique”. VM is in the heart of this double process of invention and innovation, by virtue of importance it places on the satisfaction of needs and the search for the best economic solutions (and thus the creation of more economic value). That is, VM offers a means to meld all the potentialities, including practical know-how and scientific know how, and is an active mobilisation of data-information, knowledge and competence to achieve ‘capability’.
3 - Value Management, an already long history
It is not our intention to repeat the chronological history of VM. Such narratives have already been published many times and in the specialised literature of societies such as SAVE International (Society of American Value Engineering International), AFAV (French Association for the Analysis of Value) and others. We will limit ourselves to a few key points as we head towards the realisation that a Schumpeterian [SCH 61] moment is upon this field as it’s ‘craft based’ culture must give way to the needs of a digital age, or at least adapts to accommodate it.
It is generally considered that Larry D. Miles was the inventor of "Value Analysis" (VA) just after the second world war. VA was an intelligent and effective technique to reduce the costs by way of making a thing’s function explicit. Working in ‘purchasing’ within General Electric in the USA, Miles observed and understood the formation of the cost of components within industrial products as money spent to achieve the performance of functions [MIL 61], [MIL 89]. The brilliant idea of Miles was based on the realisation that many of the causes of cost (i.e. particular design solutions) were not focused on satisfying customer requirements and lacked ‘systematic’ ingenuity. In fact, sometimes the customer was almost inconsequential to an arrogant design culture whose ‘experts’ inadvertently failed to listen to customers. Following the Second World War demand far out stripped supply and so the commercial power of customers was weak. However, this trend changed but the design culture did not adapt as quickly. The question or key focus of "Value Analysis" was to discover what a product or component, or design solution did that made it valuable and useful in some way to customers? To identify functions Miles asked of a component “What does it do?”. This interrogation method helped to draw the design team and other disciplines into an in-depth questioning of the design and the commercialisation strategy of the company. The firm’s ‘inventors’ were connected to others so that ‘innovation’ was possible.
While recognising in Miles the paternity of today’s VM, it should however be acknowledged that the ‘Function Analysis’ element (the method used to question "what does it do?") has origins much more remote. Thus one finds, for example, this thought within the work of the eminent French architect and architectural theorist, Viollet-le-Duc, one century before Miles. Even Aristotle’s concept of ‘Teleology’ has the same ‘purpose-function-goal’ logic and still persists in the study of biology even to this day. However Miles was the first to formulate a technique of naming functions with an active verb and a measurable noun. Even this ‘verb-noun’ technique caused, and causes, confusion between what is a function and what is a process and so again a deeper level of intellectual enquiry is needed. Miles acknowledged this and called for intense concentration when trying to name the function of a thing. Miles was arguing for a technique that focused a rigorous intellectual investment.
Value Analysis (VA) was developed in American industry in the years 1950 and 1960 and so emerged from within an American culture that saw itself as entrepreneurial. VA was used by captains of industry as well as by government agencies. The public sector’s need for probity and accountability also imposed expectations on the field with the need for such devices as contractual clauses starting to shape and define VA practice which played a role in the emergence of a variation that became known as Value Engineering (VE). These ‘requests’ later became codified into expectations such as ‘A VA workshop will take 5 days” and since then have become core rigidities that now hamper its own adaptation. In fact what has happened is that some practitioners needing to get work from clients unwilling to commit key personnel to be out of the office for five days have adapted their approaches, and sometimes furtively. This has placed some societies in a policing role as they try to ensure a consistent and common mode of practice is played out by its members.
Value Analysis gained popularity in the 1960s to the early 1970s and the terms Value Analysis (VA) and Value Engineering (VE) were used interchangeably. A distinction did exist between the two terms as VA looked at components that already existed and VE looked within the design stages. They spread to a number of industrialised countries and was applied in large defence, aeronautics, automotive, engineering, telecommunications industries, then in various supply chains which included SMEs, and finally in tertiary sectors and so on. Around the late 1980s it began to be applied in the European Construction Industries as well and it is from that context that Value Management emerges in the UK as a larger discipline of Construction Management tried to distinguish itself from Civil Engineering and the kind of design work Civil Engineers undertook. Trade associations gathered experts practicing these approaches to VA (SAVE in the USA, IVM in England, SJVE in Japan, AFAV in France, etc). The need to clearly define VA and VE as products led the acceleration of codification and rigidity as the call for British, French, European and ISO standards, to name but a few, began to be called for. The work of achieving standardisation was then undertaken which made it possible to recognise VA and VE as effective means to competitiveness and innovation [AFN 98]. Professional certifications were also developed and the formation of training programmes were systematically developed. As stated above, in the late 1980s and early 1990s VA had already given way to VE which then gave way to VM. All such developments can be seen as representing a consultancy view of design, invention and innovation process being widened with a view to engagements and commissions.
The period between 1980 and 1990 saw a kind of ‘popularisation’ of VA, and the start of its decline in popularity as its critics “dumbed it down” and linked it to ‘basic’ technology [EUR 99]. Some people could be heard saying things like “VE is only useful at the technical stage of design” or “VA is only concerned with widgets” and in so doing lost sight of the relationship between these methods and the underlying functions they were methods for.
The basis of VA is regularly taught in many higher educational establishments in France and also in the introductory courses technology within secondary education, but this has been much less the case elsewhere in Europe. VA, VE and VM must now face competition (seemingly at least) from new philosophies of action and new methods such as Quality Management, Project Management, Risk Management, Triz…. They can no longer evolve as businesses move from national to global; the field has to face its own innovation as the digital age bites. It is necessary for this whole field (VA, VE, and VM) to be repositioned, redefined, and integrated into other modes of innovation and competitiveness [YAN 04].
It is interesting to underline the very particular contribution, at that time, of the French experts of VA who specified very rigorous modes of Function Analysis and how to make a CdCF – “Cahier des Charges Fonctionnel” or Functional Schedule of Conditions - a tool at the heart of ‘the expression of need’ and thus the need for both invention and of innovation [AFA 97]. This formalisation, a product of a French ‘rationalist’ culture along with the weight of government expectations of auditing, and dominated by large professional engineering bodies, was not replicated by key economic protagonists from other countries in Europe. Here there were many parallels between France and the USA but rather surprisingly not in the UK which had been heavily influenced by a less rational approaches borne out of a school of VE which operated with a technique named “Customer FAST” and two academics, John Kelly and Steve Male, who ran an MSc module in VE at Harriot Watt University in Edinburgh, which initiatives brought American consultants over to run training courses.
The word ‘customer’ caused much debate for it often resulted in an assumption of customer preferences without ‘actual’ customers being involved. Given the context was mainly construction projects the distinction between customers, sponsors, consumers, and end users demanded a participatory approach to VM but again the logic of people in workshops and the attitude of that industry to more often than not seek cost minimisation, meant such a capability was invariably difficult to achieve. Not even an approach named ‘Soft VM’ which gained popularity in the UK, Hong Kong and Australia made this distinction between ‘Management by Value’ (MbV) and ‘Management for Value’ (MoV) explicit but some such as Roy Barton from Australia did promote ‘learning’ and VM as an educative process which could claim to have had an impact on our thinking today. A highly regarded academic in the UK, named Stuart Green, borrowed from Peter Checkland’s “Soft System Methodology” (SSM) of the early 1990s and was a key advocate of “Soft VM” which characterised VE as ‘Hard VM’ and inappropriate for the social problems of management; Checkland and Scholes [CHE 99] have reviewed SSM recently and the differences between a systems view and a ‘functional view of systems’ is clearly missing in their perspective and so Green’s use of the SSM schematics was consistent but also missed the point of VE’s call for functionality to be made explicit. Green lead UK practice towards general views and techniques of Group Decision Support and Smart VM. VE was no longer ‘fashionable’ in the UK and few continued to develop Function Analysis in order to continue the project which started with VA. As a consequence VM in the UK has had a difficult time defining itself as its underlying principles based on a relationship between ‘value’, ‘function’ and ‘innovation’ were lost in the debates around rhetoric. Figure one depicts a view of the genealogy of this field.
Figure 1
During the last decade, various paths become seriously scrambled. At the international level, Value Analysis, traditionally focused on hardware or components, gave way to Value Engineering, which focused on the design processes [WOO 02]. The applications of VA methods left the traditional venue of large-scale industry and moved closer to assistant with decision-making in complex environments (i.e. the design process and VE) - "Value information engineering" - [MIC 96 ], [MIC 99a]. Many new and interesting applications of VM outside industry as for instance in the tertiary sectors (social, cultural, health,…) were largely developed which also made obvious the need for “softening" the traditional (and hard) value approaches [MIC 04]. [MIC 01a]. The meetings of experts in Europe resulted in discussions that tried to widen the scope of VA and VE to become more appropriate in the board room. The key was to challenge ‘cost reduction’ as the only source of value that was an obsession with some practitioners. In this transformation the emphasis was now on managerial and systemic agenda and thus about Value Management and how to standardise this "Management of Value" (MoV) logic [BRU 01], [AFN 00], [WOO 01]. It is necessary however to recognise that if the desire to pass this methodology on to a managerial level was real and genuine, in practice it faced extremely different cultural and contextual realities, even within Europe.
Within Anglo-Saxon practice in the USA and UK in particular, a strong ambiguity of this concept of VM as ‘Management of Value’ (MoV) has existed. The French experts choose to speak about “Management par la Valeur” or 'Management by Value’ (MbV) rather than ‘Management of Value’ (MoV). This point is not trivial and has profound implications in practice. For VM and the ‘MoV' school there is a mind set in which the notion of value exists outside the heads of people and as if it is a tangible phenomena. Such a mindset invariably seeks to measure value and often in the hard form of money. As such a narrow view of value is brought to bear, cultural value, morale value and personal values are seen as inconsequential and external to the task of ‘cutting cost’, ‘reducing schedule’, ‘optimising quality’ and ‘delivering projects’. The alternative view of VM, locates ‘value’ in the conceptual process of people that socially construct the human world that in turn resides within a symbiotic relationship with Nature. This mindset forces enquiry and empathy and is almost existential in the way it brings about collaborative enquiry. The aim of MbV is to seek ‘best value’ as determined by a collection of stakeholders. Often such stakeholders are in competition with other rival groupings and so consensus is about accepting trade-offs within a value based framework that leans towards Aristotle’s views of “The virtues” and how morality is not within stated yardsticks but how a person plays them in action. Both a MbV and a MoV practitioner would use comparable words to describe what they do and how they do it. However their work would operate very differently and arrive at very different outcomes. That is, we must not assume paternalistic roles and that we know what’s good for other people; it’s about doing VM with people rather than to them.
The drive to write a ‘European Standard’ in a constrained schedule meant that such distinctions were never fully discussed. Furthermore, some in the UK saw the project as being about defining a methodology that clients could specify and so sought to create a rigid conceptual framework of ‘commoditised’ methods and techniques laid out in a prescriptive logic from with a ‘product definition’ type endeavour where methods such as Function Analysis were not seen as ways of interrogating our assumptions but as a “Unique Selling Point” that distinguished VM from other methods so it would be easier for clients to procure services. MbV approaches are about ‘not assuming’ nor are they about selling a cook book recipe approach to problem solving and therefore they seek to develop an approach that begins with enquiry in it’s truly ‘action-research’ sense.
The last few years have seen the French and enlightened scholars from the UK and Canada join to emphasise with this concept of ‘Management by Value’ (MbV) and the need for practices which are recognised as intellectually rigorous by decision makers. It’s not about “I don’t understand your issues but this is how I will solve your problem with a standardised game plan”. It’s about “What does value mean to the different stakeholders and how can it be best achieved, for an enduring judgement that it has actually been achieved”. Paradoxically ‘Value’ disciplines are not taught in many Universities or Schools of Engineering across Europe, but are discussed in part within Business Schools, especially around the topic of “Marketing”. For reasons of convenience, we want to indicate this set of disciplines and approaches to ‘Management by Value’ (MbV) with a generic term of "Valorique" [MIC 01a], [SEN 01]. The function of this name is to allow the differences in attitude and approaches to be surfaced as a need for the value community to explain and deepen their understanding; we use it to distinguish and show how practitioners can shift from the ‘Management of Value’ to the ‘Management by Value’ perspective and hopefully to a combination of the two at a later stage in their professional development. We are not simply talking about a method, we are advocating a new fundamental basis for practice grounded in a research culture.
This approach we call “Valorique” must still achieve results. It must acknowledge the strong concerns which have emerged and to seek factual truths in order to fuel innovation and achieve competitiveness. It’s about revisiting VA before the rigidities and standardisation trapped it into becoming a ‘routine’ as its rules were taught but not the underpinning axioms that made it powerful. It’s about using logic and hypotheses to generate management theories that are tested for both truth and value. It’s about providing a catalyst for invention and innovation within the functioning organisation. The fundamental thinking within the term “Valorique “, as a philosophy, will develop in practice as it itself searches its own articulation within other approaches to innovation such as project management, quality, engineering system, knowledge management, etc. Valorique enables a kind of federation of doctrines and methods seeking value and economic efficiency [MIC 99a], [LAV 01]. The pursuit of Value, the recognition of function, the understanding of invention and innovation synthesise to become a grounding from which other methods become tools. If a project is late use Project management as a context for the fundamental thinking within the term “Valorique “. If we need a new drug use Valorique as a context of invention. If we need to get food to starving people, use Valorique as the context for innovation.
We will always face the dilemma between a written word and what it actually means in a contextual usage. If we see words as signposts to meaning then the ‘meaning’ becomes more important than the assembly of letters to form a word. Let’s avoid slipping into a vapid semantics and arguing over slogans that have no correspondence to truth. Instead, let us bring a process of rigorous thinking to bear on the search for function, innovation and value. To fully understand the fundamental thinking within the term “Valorique “ someone must learn research methodologies and the VA to VE and on to VM tools and techniques, for they are necessary and powerful when combined.
The weakness of the ‘MoV' tool kit is that with ‘standardisation’ comes a rigidity and hence a commoditisation of such ‘tools’. Practitioners of ‘MoV' do not engage in research but rather steer the client’s situation towards the ‘solution machine’ that is their rigid process. The past attempts of consultants to develop a clear brand image and to make the “USP” (unique selling point) stand out, has resulted in a solidification of a body of theories that in the past yielded VA, VE and later VM; Valorique is trying to bring the underpinning theories back to the fore and so is not so obsessed with particular tool kit perspectives and seeks to let the client’s ‘problem’ determine the choice of action-research protocol. Clients only look for commoditised methodologies when both the problem suitability and method-appropriateness are understood and this has hampered uptake of VM by clients. Ironically, the practitioners have created their own “Catch 22” as they defend the ‘standards’ and thus prevent any change. Furthermore, as practitioners guide their clients to ‘fit within’ the standard approach important variables can be overlooked. Even more important to this work is when a revolutionary new technology comes along and practitioners stuck in the old way of doing this, become unable to adapt.
The defining ground of the fundamental thinking within the term “Valorique “ is that we can agree it is about enabling innovating, about changing something in order to bring or create an enduring value, or by limiting the degradation of value [PER 01b]. This ‘value’ for organisations is correlated with terms of ‘added value’ (i.e. satisfaction) and the functional needs of users and other managerial aspects of control, revenue and benefit maximisation, optimisation or reduction of costs, and other expenditures on social values such as skill development. To achieve this internal collaboration, implementation is invisibly linked to competences and the ability to mobilise the synergy between creative forces within the organisation [GRA 01]. Valorique is about using value as a means to bring stakeholders into the organisation’s thinking-processes and to achieve an advantageous ‘capability’ that other organisations will find difficult to replicate; especially those rivals located in far off lands. It should however be admitted that the concept of Value remains one of most difficult to encapsulate and that definitions from multi-disciplinary efforts fail to define value outside a particular context [PER 01b]. We argue this because ‘value’ is about preferences and so will always require a context in which ‘choice’ is a central concern.
The literature abounds on the question of value and that multiple meanings have been given to the word ‘Value’ reflects an ‘obviousness’ of the various perspectives and legitimate choices of personal or collective "values". From a practical, MoV rather than MbV, point of view of the observer searching for utility, such as inventor, scientist, creators of new products or services, we can say that Value is the differential of advantages with respect to the sacrifices (e.g. costs) or disadvantages that a given product can present, compared to another offering [MIC 01c]. Value is a conceptual process born out of intelligence that allows us to prefer such as 'luxury to discomfort' and so also requires an ability to imagine future states and envisage possible outcomes. In lesser animals than humans a lack of intelligence inhibits their ability to prefer and thus survive; for example the hunted fish that cannot distinguish the value of bait and food. We cannot ‘only’ look to outcomes and ignore the problems of how to get to the outcomes; this is why the study of functionality is so central to our field. Value could be treated as the differential (or comparative) of advantages brought by money invested in a given product. But this is far from ‘adequate’. A satisfactory theoretical definition of Value must show how it is a reflection of ‘action’ and ‘reality’ and how things can be used to advantage. An advert in a newspaper tries to convey such a message that guides our preferences to buy goods, products or services; here the customer must learn from the hunted fish and make wise choices or pay more money than any value yielded. Such judgments can be modelled on a multi-criteria basis [YAN 04] but are limited to problems of ‘selection’ and do not help us to innovate; our role as customers in an advertisement campaign is usually to passively give some of our personal wealth in exchange for ‘ownership’ and so the concept of ‘property’ is vital to any consideration of economics; if a thing cannot be owned then it cannot be exchanged for money.
The evaluation and the measurement of Value thus remains [FON 97], [KLI 04] and can be approached, but not defined, with Bayesian logic (e.g. decision trees) as such misses out the richness of ‘function’[WOO 02]. The dynamics of value creation and stage gate processes is an attempt to structure the relationship between the context, usefulness, technological technique, invention and thus innovation. For us, value is about ‘preferred-usefulness’ within a dynamically changing environment and is why function is at the core of our whole process of innovation. As ‘useful’ and ‘preference’ is always contextual and such a notion of context is always a snapshot of a changing reality, so to must the notion of value change for they are all concepts that are inextricably linked. A chair is useful to sit upon and it is useful to prop a door open on a warm day. Our creativity is directed towards usefulness and preferences as well as understanding whether things will function as we want them to. Such a mode of enquiry determines innovation and risk-reward investment logic is generally accepted in an intuitive way, without too many questions for trivial problems, but is made formal in major projects [WOO 02]. We are more comfortable with economic value when we define the context as ‘ investment’. However, just because we define the context does not mean others will see things in the same way. Here we return to the distinction between MbV and MoV and the approach of the fundamental thinking within the term “Valorique” versus Management Consultancy.
For those steeped in VA, VE or VM and its core rigidities, it seems obvious that many tools and techniques can be used to go in the direction of an objective guided by the logic of ‘Management of Value’ (MoV) and claims of value creation. However, the goal of consultants is often focused on commissions, client approval and repeat business within a logic of ‘quick wins’ and ‘short termism’ rather than research and long term value (This distinction is a source of sustainable competitive advantage for companies whose rivals cannot look further than the next quarter’s results). As such they bring an attitude to collaboration that would conflict with an educative attempt at knowledge and skill transfer. It is not in the interest of the consultant to develop a capability that loses future commissions. Academics with PhDs on other hand are researchers and transmitters of generic knowledge and endeavour to give a broader referential framework to the underpinning principles upon which are founded value approaches. It is culture and competencies that make the fundamental thinking within the term “Valorique “ feasible and is transferable to non-academics and so must not be seen as a few scholars trying to muscle in with their own brand management “Unique Selling Point”. French and foreign researchers propose “Valorique” for this corpus of disciplines based around research, knowledge and know-how [MIC 01], [SEN 01], [YAN 01].
5 - Potentialities of Valorique in relation to the innovation
The force of the research perspective and Valorique accords with several principles which all taken separately are interesting, but are more powerful when they are integrated and articulated as a body. The following principles will be discussed in this section:
5.1. Problem scanning and framing: ‘enquiry and questioning’
5.2. A "systemic" step with mobilisation-confrontation from multiple points of view
5.3. A reference frame that defines ‘functional need’ based on Function Analysis
5.4. Cost Intelligence and focusing on the economy of the means
5.5. The mobilisation of information, knowledge and competences
5.6. Project Management and the rigour of Value Analysis
5.7. The explicit or implicit recourse to the practices and techniques that enable creativity
5.1. Problem scanning and framing: ‘enquiry and questioning’
VA was born from the need to meet difficult challenges, like that of substantial cost reductions, without degrading service or quality levels of the products placed in the market [MIL 61], [MIL 89]. The value methods have interest to innovation as they make it possible to confront critical problems, and grapple with contradictory requirements through an efficient use of a multi-disciplinary team. VA is therefore a stepwise method of "problem solving" which is based on a clear identification and determination of the problems and its context, how problems can be solved in theory, and how a team can then move into implementation and the testing of theories in action. These steps are at the heart of active pedagogies such as “problem based learning” used in the vocational training of engineers [YAN 04], [KLI 04], [FON 04], [WOO 04] or of doctors learning their skills in applying theoretical knowledge as they try to diagnose real ailments in real people. The key difference is the rational basis upon which the way we think is structured, rather than rush in with the first potential solution someone suggests. There are stages of observation, analysis, diagnosis and treatment which seem to have been lost from modern approach to MoV, as opposed to MbV and Valorique.
5.2. A "systemic" step with mobilisation-confrontation from multiple points of view
At the heart of VA is an almost Aristotelian synthetic view of a joined up reality that functions. Practice stresses the need to adopt an integrated perspective drawn from multiple interpretations and observations. The current operating modes in organisations make it possible to discover the dysfunctional effects of Taylorism, the ‘demarked’ segmentation of trades and disciplines and a workforce alienated from the creative management processes needed to ‘invent’, ‘innovate’ and ‘invest wisely’. The consequence of such “us and them” management approaches encourages conflict between departments, as different interests fracture an organisation into a collection of multiple and conflicting objectives. As mass production loses its advantage, the need for ‘unthinking’ automatons as employees becomes even more ridiculous than it ever was. Today we need people with all kinds of ‘know how’ to fuel the organisation’s innovation capability. We argue the old styles of management, from Fayol and Taylor through Gilbreth, Bernard and Sloan and onto Ohmae and Kanter, to name but a few have a significant responsibility for loss of competitiveness and loss of quality that could have been achieved if a ‘divide and rule’ assumption that separates the manager from the employee had been challenged head on. It has seeped into most schools of management as the concept of ‘manager’ is somehow socially elevated. It stems from this parcelling out of fragmented commitments to ‘trust’, ‘integrity’ and ‘reliability’. In some conflicts the badly managed interests’ subsumed values of mutual respect and shared destiny as an organisation had its public vision and public mission statements as well as a myriad of hidden or unarticulated views which causes a loss of potential. It is for such reasons as this that VA to the fundamental thinking within the term “Valorique “ have credibility as they seek to cement the fissures within an organisation’s thinking systems that are fractured by its own policies, procedures and internal power-games. While some managers looked to Machiavelli they imposed their leadership through power and authority and once hailed as Caesar ensured their Brutus would not repeat history. However, lack of commitment often follows and such enforced views and agenda fail to win the hearts and minds so necessary for a cohesive implementation and achievement of potential.
MbV and Valorique give priority to this search for ‘best decision’ in a coherence and forced intelligent expression of particular points of view to be considered in the fullest sense of value. The passage of VA to MoV and to MbV (and the fundamental thinking within the term “Valorique”) accentuates a “systemic” dimension by considering multiple interests and complex social and technological relationships (“Value Management is generally concerned with maximising the benefits of a project by satisfying the requirements of the various stakeholders involved” [KLI 04] Even so, it’s not ‘MbV' but ‘MoV' and the language of short termism is heard when we are told of “deliverables”, “cost reduction” and “schedule improvement”).
With globalisation the problem of cultural imperatives becomes more prominent. Where once we would not know how people in far off lands were exploited now our television sets reveal such to us on a daily basis and we are forced to confront our moral values and our economic values where ‘deliverables’, ‘cost reduction’ and ‘schedule improvement’ mean children are exploited in far off lands. Now we see clearly a major distinction between ‘Management of Value’ and ‘Management by Value’. Globalisation raises the issue of insisting one view dominates the innovation agenda and promoting an enquiry into often conflicting views as is the core function of ‘democracy’. If the goal is to maximise profit then the global economy needs to be seen as a single entity and the trend of capital moving to low cost economies as systemic. It is a system regulating itself as it tries to find equilibrium. The Schumpeterian view of Creative Destruction means we are forced to try and buck the systemic trend. This trend of a global economic system trying to regulate itself by moving wealth creating factories from Europe and North America to emerging markets in the East ignores the social value of ‘work’ in the towns and cities left to cope with the aftermath of “off shoring”.
5.3. A reference frame that defines ‘functional need’ based on Function Analysis
The originality most cited, and appreciated, in Value methods is related to a constantly asked key question "What does it do?" in order to tease out a function. In other words, the check on needs is correlated to elements and parts to ensure they ‘work’ towards a stated purpose. This functional frame of reference [AFN 96] makes it possible to engage penetrative questioning of how things are currently done, and thus to innovate [AFA 97]. This functional "questioning" can appear obvious but it proves to be a powerful stimulus as it enables people with different technical and cultural languages to build a shared understanding and innovate as a team. The functional approach gives a real coherence, stability and rigour to the reasoning and insights developed as a situation is mapped as functions by a group. Furthermore, as functions remain constant, solutions frequently change with scientific progress and technical advancement and so this functional logic enables forward looking innovation to not only meet today’s customer preferences but to also bring new offerings by combining the latest scientific and engineering knowledge.
This "capability" is undoubtedly a good way to release creative potentialities and stimulate major innovation because it introduces a creative challenge which the whole team can take up. This challenge is, “how can we satisfy needs without imposing any notion of a pre-conceived solution that would undermine the search for alternative solutions?”
5.4. Cost Intelligence and focusing on the economy of the means
A crucial question posed at the commencement of VA was how to substantially reduce the costs of industrial products? With this question, which recurs for managers responsible for economic performance, the answers can be numerous. If we see management as a game then “fudging” is a possibility and short term tactics such as dumping, annual sales stock, or out-sourcing, or off-shoring or down-sizing or other steps that hide the ‘true’ inefficiencies of method. VA and VM can bring an original answer that is both effective and efficient to this question, and again generates innovation and stimulates practical creativity. But only MbV can do so in a way that builds social relationships between the local firm and local customers that offer a new way of designing ‘supply and demand’.
VA rests on what one can call a true control of costs (and all factors of expenditure, such as energy consumption, time, space, weight, etc). This knowledge of costs is used to articulate cost factors necessary to generate value for customers, users or interested parties and those cost factors which, on the contrary do not go to the satisfaction of the needs therefore degrade and destroy value. That is, if the customer’s ability to prefer is degraded because the producer believes poorer offerings will increase profit then the difference between ‘Management of Value’ and ‘Management by Value’ shows ‘value’ in terms of the true relationship (i.e. respect) between the firm and customers. It also relates to the durability of the ‘value’ as one leads to short term profitability at the expense of long term trust. VA resulted in the basis of functional accountancy which makes it possible to connect the cost of solutions to the functions of products. These are correlated in a hierarchical basis, according to the ‘needs to be satisfied’ and thus to then take corrective actions in the form of new solutions reducing the ‘useless costs’ and augmenting 'desirable benefits' [WOO 02].
This intelligence, or costs control, finds a natural location in Design phases as an Objective Cost Model (e.g. Design to Cost) and now is extended in Design through more informed objectives ("Conception à Objectifs Désignés” or CCO) that reflect more pluralist design briefs (e.g. the ratio of benefits to increased costs). In this ‘design to cost’ (DTC) approach the objective of cost becomes the ambition to be achieved, which will force the innovator to seek more ‘new’ solutions. It is known, with respect to artistic creation and design excellence, that the imposition of a strong cost “obsession” directs innovation away from solutions that focus on satisfying customer needs and attracting revenue and towards meeting minimal acceptance criteria.
5.5. The mobilisation of information, knowledge and competences
One generally regards VA as a demanding method, often difficult to implement by those not trained in its processes. It helps by framing problems which require a collective ‘sense making’ to make innovating breakthroughs possible. Very early, the first proponents of VA stressed the importance of collecting information available on the topics to be addressed. Thus the mobilisation of intelligence, knowledge and competence through the actors in the company or organisation was quickly translated into a form of methodological instructions. They recommended the setting-up of a multidisciplinary working group and taking into account a scheme of work (i.e. the Job Plan) and in every VA study, a key stage known as the ‘information phase’. Today everyone agrees and recognises the importance of these original schemata (although poorly articulated) and the capitalisation of information and knowledge associated with VA and which is still present in VM today. MbV and Valorique is grounded in a philosophy of action based on the interpretation and commitment of people and the alignment of competences in the resolution of their own problems [GRA 01], [MIC 01a]. The functions of a “Job Plan” become more important than the scripting of it.
One can, without any doubt, affirm today that VA anticipated and aligned itself with modern steps of design and innovation, and is also well suited to the practice of Knowledge Management [MIC 01b], [MIC 03b]. The methodological considerations of the last fifty years, the VA working group (i.e. VA Team) and the mobilisation of information, remain central to VM and Valorique but can also be widened, and extended, to a more participatory "current" vision that seeks to reduce of the ‘division of knowledge’ (i.e. a product of fractured organisational designs) and increase technological competencies in the emergence of new information and knowledge management capabilities. It is thus towards a certain form of ‘hybridisation’ of the steps that VA and VM can combine themselves with the practices of previous years in new forms of collaboration, in virtual mode (electronic forums, Intranet sites, ‘real-time’ virtual workshops, communities of practice, work or training) that are at the heart of this Schumpeterian ‘Creative Destruction’ of VM we argue makes the need for MbV and Valorique ‘real’. And it is our view that by mobilising, in an effective way, information, knowledge and competences, one can enable innovation as an “obviousness” and “acceleration of progress” enabled by the Internet and the generalisation of the digital exchanges of data. We are able to form a more informed basis upon which to interpret and understand reality.
5.6. Project Management and the rigour of Value Analysis
It is one of the founding principles of VA, which taps the efficient and effective use of knowledge stored in the heads of key personnel engaged in design that must be central to VM (either MoV or MbV). Thus the current standards insist on early introduction of VA in new project or product developments, by clearly defining various phases through a scheme of work which is rigorous (i.e. Job Plan) [YAN 04]. In addition to this scheme of work, one can assert a clear determination of the various actors concerned (partner, decision maker, working group VA, stimulating VA) and a whole mechanism of the validation of choices and decision-making. Without explicitly acknowledging it, the standards for VA introduced good practices for Project Management way back in the 1960s (That other methodologies may make the same claim should be seen as contextual and that actors of the day were responding to the issues of that moment). Today VM and Project Management are closely related to the point that we see corresponding trade associations, as AFAV and AFITEP in France, converging to form an integrated methodology (e.g. Project, Risk and Value Management) that is fully aligned to ensure maximum economic efficiency. However if one refers to our distinction of MbV and the fundamental thinking within the term “Valorique”, one could say here that this ‘methodological rigor’ for project control is not necessarily favourable for invention or innovation (its goal is rather to limit “target misses” than stretch such goals or even search for revolutionary innovation).
5.7. The explicit or implicit recourse to the practices and techniques that enable creativity
VA explicitly mentions a phase known as the “Creative phase” or “Speculation phase” and the VA standards mention this in respect of ‘one’ technique, namely “Brainstorming”. The ‘analyse’ within VA was often criticised because it emphasised the “analytical” too much. However Carlos Fallon captures the essences of this debate when he joined up both the need for analysts to break things down into parts to understand them but that their recombination was vital for them to function as a ‘thing’ [FAL 70]. It goes without saying that the analysis phase underpins the need for comprehension of problems arising, and constrains, to be faced. But for ‘analysis’, it is also necessary to be able to imagine and name another possibility, to invent, and to find solutions. There is a necessary tension between orderly thinking and chaotic or lateral thinking that probably has a larger effect on how humans think than we assume. It is interesting to underline the fact that VA specialists understood this need. They knew that to couple an analytical step consisting of rigor with other creative approaches (brainstorming, synthetics, etc) required different modes of thinking. Paradoxically, the stronger the analytical phase, and especially with a well articulated grasp of functionality by way of tools such as FAST, or Functional Expression Of Need, the more powerful the creativity stage as is it focused on innovation ‘pinch points’ that if improved yielded significant benefits. This principle is also at the heart of MbV and Valorique.
In the previous section we discussed what we believe are fundamental principles established in traditional VA and later in VM. We have also pointed out how attitudes based around a distinction between ‘Management of Value’ (MoV) and ‘Management by Value’ (MbV) are at the heart of our call for a new approach. We’ve named this Valorique so that the presence of a distinction is firmly and irrefutably placed before this community. The symbol of Valorique is thus tool to force a deeper enquiry into why and how value practice is as it is and also how it should develop in the future. We will now explore this distinction in more detail in the next section.
6 - Digital technology, networking and an ability to innovate differently
If we step back and see the Internet causing a shift in the way business is conducted, we could map, or observe, the specific contributions for Valorique, that information technologies and communication can make. To wonder about the complementarities or synergies that can develop between “Valorique” and the “Digital Revolution” is to see VA, and VM as solutions to some deeper functioning, and that new technologies enable us to contemplate and find new solutions. For us the shift is away from commoditised methodologies and the establishment of core rigidities. Now VM and the fundamental thinking within the term “Valorique “ are about a research context and one that seeks a link between hypotheses and increased value. In a certain way, each one of these two terms voluntarily reduces to simple expressions, philosophies, concepts, practical, technical, socio-economic methods and organisations which influence our ways of thinking, acting, working, and designing new and innovative products. It thus appears logical to seek to know if these two problems of supporting effectiveness, by way of adapting a proven VA methodology, and innovation can mutually grow. We wonder if it is possible to distil their ‘essences’ and thereby form a new combination that acknowledges the Schumpeterian ‘Creative Destruction’ caused by the Internet and digital revoloution. We believe it is and will be so.
6.1. The culture "Valorique"
The value approaches have changed our ways of thinking and in particular with regard to the design of products and processes, and have been used successfully. We look back on past achievements with great respect and a sense of pride for having been in this unfolding history. Even if the canonical steps of Value Analysis (those which the various standards recommend) were not always applied everywhere with the same levels of competence, intensity, exhaustiveness, tenacity and regularity, it is significant to underline several essential facts.
During the last thirty to forty years, the functional approaches have spread into many spheres of practice and have become a methodological reference frame that unfortunately also became a core rigidity that are today difficult to circumvent. Thus in the context of routine problems they are found in procedures and to be reliable and applicable to topics such as quality management and risk management. It also became the norm to view ‘value’ in terms of some obligatory result (objectives to be reached, "outputs") and either, as it was traditionally done, in terms of means ("inputs") as seen in Michael Porter’s “Value chain” logic which is simply a macro-economic approach to the determination of GDP (Gross Domestic Product) translated into a micro-economic context (But where are the shareholders and institutional investors in his famous “Five Forces”?) As regards consultations in the public sector, VM is often recommended and offers candidates a basis of Functional Schedule of Conditions – CdCF - (Cahier des Charges Fonctionnel or Function Based Performance Specifications) to help define performance expectations. Even in fields such as “software development” one comes to observe functional enquiries. The current orientations and cultural expectations of ‘certification of competences’ or ‘accreditation of programs’ implies a need to prove value has been demonstrated, but not necessarily ‘achieved’ as ‘politics’ allows the subjective to reign over the objective.
During the previous three to four decades, one could note the regular questioning of design modes in product development and market launch. The design methods must satisfy the needs of customers with increasingly complex requirements and so inevitably also become complex themselves. But they must also enable value, not only to customers but also to the various interested parties concerned with profitability. And it is quite natural that one comes from then to today to regard MbV, rather than MoV, as one of the key steps needed to face new expectations of competitiveness and “sustainable development” and at a time when the objective of value creation has become a true motive of economic ambitions. Note that here we are talking of ‘Management of Value’ which we have already argued promotes short term gain over long term commercial sustainability.
To use intelligence (or more intelligence) in the design of products, while being constrained to the techniques VA (multidisciplinary working group, rigid scheme of work, mobilisation of information from within the organisation and its projects) was already established in the 1960s to 1980s and to go towards what is possible today, namely the concerted design effort based on a solid knowledge management and mobilisation of competences, requires the rigidity of compliance to past mental-models to be weakened.
This change is necessary to lead a company through the industrial era to the post-industrialist era and is characterised by a necessary economic evolution towards the needs of service industries. The service industries are themselves based on intangible values , such as service quality and customer loyalty, and the need for the mobilisation of knowledge and competences from a geographically dispersed multidisciplinary team that reflects the cultural complications of the Global Economy.
6.2. The Digital Revolution.
The Value approaches were born approximately 50 years ago, and then they gradually developed throughout the second half of the 20th century. The “Digital Revolution” is definitely a more recent phenomenon and is characterised by very a fast evolution, and impact, on the way new working methods have developed. This is a significant technological revolution that changes many aspects of the way societies work.
The internet constitutes the most visible and spectacular part of this Digital Revolution, but it is necessary to also take into account some of the other digital technologies and their applications: CD-Rom, DVD, mobile telephones, virtual reality, Blogs and Wikis, networks with or without wire.
It is known today that this Digital Revolution is as significant as that related to the arrival of printing works. It is a core technological advancement that has changed society. One can see that it deeply modifies the modes of thought, organisation, work and that they have had an unquestionable impact on the professions and the trades [MIC 00a], [MIC 00b], [MIC 01c]. It is also known that it introduces new prospects as regards ‘action’ and ‘location’. It has transformed in a spectacular way the relational fabric between agents. Where once meetings required people to be in the same room this is not always the case today. Digital technology is presented in the form of a one (it) technology of globalisation with all the positive and negative effects of this ‘one’ that flows from a new mode of communication and shaping of ideas. The Digital Revolution is forcing us to change the way we develop our beliefs and that changes our views and priorities and inner values which subsequently steer our actions and behaviours.
Internet and digital associated technologies stimulate operations in networks incontestably and make it possible to create new assemblies of competences according to the most varied geography and temporalities, often conflicting with the older and more traditional modes of organisation. Whilst this chapter talks of a particular field, the subject is far larger than the topic we are concentrating on. The revolution has not finished astonishing us and involves us at high speed in an unbounded exploration of new continents and sometimes brings a feeling of faintness or fear (the images of the sorcerer's apprentice easily come to mind). The words “There has been a Tsunami” are made much more real as technology widens our awareness of distant places and even shapes our response.
6.3. Two innovating processes of different nature
Taking again the distinction made at the beginning of this text between two types of innovation, one could characterise and oppose the two processes of ‘transformational-innovation of Valorique’ and the ‘Digital Revolution’ that seems unmanaged but driven by attitudes of many with a ‘Management of Value’ culture.
The Value approaches were born from the need to rationalise, to better satisfy needs, to reduce or control costs. In their time they were an efficient and effective solution but that time has changed and is changing. They stress adherence to methods, the rules of action and organisation as conceived in yesteryear. They aim at a goal, a finality, while endeavouring not to lock up actors in ‘given’ solutions. They are on the side of innovation that is prescriptively structured, which inevitably makes its generalisation and subsequent adaptation more difficult. The way forward is to see the rigidity as a solution to underlying functions and in so doing enable us to loosen the grip of past preferences and liberate new modes of value-practice.
The Digital Revolution challenges adherence to a methodology borne in the industrial age. It is more innovation "push", innovation induced by scientific, technical developments that are intrinsic, privileging a logic set in the development of upstream supply and an assumed anticipation of ‘need’. It results in the marketing of new solutions increasingly stranger or spectacular than the ones many dreamers, engineers or commercial agents had imagined (e.g. toilets that conduct medical tests as they are used). In a great number of cases, these products of the digital sphere end up in the market as the figures relating to household consumption and their effect on society not always appreciated in full. While taking as example, the success of the sending messages via SMS or MMS, one includes/understands this logic of innovation made possible by a new technology and its flourishing uses, themselves ending up as a series of needs as one invention begets another. One could describe this Digital Revolution of “uncoordinated” innovation, based on values of spontaneity and lack of a controlled collective reactivity (with the image of practices P2P, creations of Web sites but also of the avalanches of spams and pornography).
6.4. The Digital arrival of Valorique
It becomes obvious today that innovation by way of the Digital Revolution would benefit from being grounded in the robustness and the fertility of value approaches. The applications of digital technologies brings with it a fear of exorbitant costs of time spent in endless email communications, of time spent dealing with e-messages of all kinds, and with non accountable time spent browsing Web pages (Internet or Intranet) as well as the cost of “derived products” (e.g. the exponential growth of print outs and the cost of paper). The obvious advantages of the digital age stand opposite to the number of dysfunctions and new problems that need to be regulated (e.g. informational pollution, digital interference). The need for electric power and the bursting of financial bubbles relating to the “New Economy” also worry investors. One could say that it became necessary to pass gradually to a new era of rationalisation in the digital environment but it is the Digital Revolution itself that dictates the pace of change. That the real tension is between agenda flowing from ‘Management of Value’ and ‘Management by Value’ and this is how we can turn the tables on a technology that is running with no one at the steering wheel.
As an example, one can evoke here what would be urgent to undertake on the level of many Intranets of companies so that they become real collaboration tools, a true step of total re-design of these Intranets could be unfolded, designed, decided, engaged and rationally implemented so that a new more powerful way to enable innovation follows. Such a capability requires a new form of MoV and here we argue for MbV and Valorique.
Also let us consider the products that did not reach their final stage of maturity and which are very often presented in the form of accumulations of gadgets (e.g. the constant reinvention of microchips that are even smaller and more powerful than before). It is necessary to conceive a day when an environmentally respectful system of the basic needs, such as masts are achieved. People want the benefits of progress but only if such benefits are delivered in undetectable ways and cause no loss of personal value.
A priori, it should not be too difficult to take into account the requirements of the fundamental thinking within the term “Valorique “ by economic actors implied in digital technologies and their applications. Several reasons for that include:
• The market is global, total and competition is extremely sharp, and thus only solutions proving to be most value and best suited to needs will end up in a sustainable implementation.
• products or applications concerned with the provision of contents (Web pages, platforms Intranet, DVD) by the very fact that they relate to mass markets with end-users ensuring an on going search for more simplified and effective solutions
• The actors in the Digital Revolution are themselves the first promoters of collaborative steps. These people with know-how and in various knowledge exchanges of information through operations in networks, also argue for open solutions and open source code.
In a concrete way, it is advisable to encourage professionals of all kinds, involved closely or at a distance in the applications of digital technologies to adapt VM and Valorique to resort to the methods of the Function Analysis. The design must commence with the articulation of values from stakeholders that are translated into objectives and performance specifications. It is highly desirable, as young professionals direct themselves towards the digital trades (i.e. software engineers), that they receive educational exposure to the value approaches and are encouraged to combine digital capabilities and the fundamental thinking within Valorique.
6.5. Value Management and digital networks
Born well before the digital era, VA did not and could not have known how to integrate all the contributions of this last revolution. The recent passage of VA to VM (Value Management) can be regarded as evidence of a transformation in progress which should find its fullest result in a taking its own methodology into account and with respect to the digital environment. We argue for new attitudes we’ve named MbV and Valorique so as to stimulate debate within the value communities.
It would be particularly advisable to reinterpret the fundamentals of value practice and in the light of possibilities offered by the digital one and the networks, to also exceed the compliance culture to rigid methodological rules laid down in this field over the last seventy to eighty years and to promote more inventive methods of implementation of collective intelligence, for a management of innovation and value creation. Digital technologies allow information and substantial savings of time in the processes of design and decision and at the same time they allow a widening and greater level of user participation in design, unprecedented in the fields of innovation. This is possible because the relationship between function and solution is so central to this body of practice.
The traditional multidisciplinary working group often considered as a key to the success of VA studies, can be substituted or added to by other devices or organisations via virtual workshops for design, collaborative networks of expertise, and so can solicited a greater number of competences without it being necessary to physically meet in the traditional forum of workshops.
We can now reconsider VA and move towards the practices of Valorique calling upon digital technologies systematically, as well as for functional articulation and simulation against objective expressions of needs, as was and could still be comparable to the information stage of VA (data bases of cost, knowledge bases, technological trees of alternatives). Even more capabilities are possible for the fundamental thinking within the term “Valorique” as the inventive phases (e.g. automatic generation of solutions, engineering software and CAD with widely dispersed teams) can be augmented by the Digital Revolution.
The traceability and the capitalisation of VA studies can also benefit from tracking and progress chasing because of digital techniques. The constitution of platforms (Groupware, Intranet, Blog, Wiki,…) dedicated to or accompanied by developments in VA or VM appears “easily and usefully” possible today. Just as operations within virtual networks could be very inventive, one could conceive, in MbV and Valorique, of the decision-making process starting from the confrontations of multiple points of view with a greater interactivity between the various interested parties made possible by the new digital environment. The risks of new product development could be reduced by integrating market research in the field with the concept stages of a new initiative. We can have customers as active members of the design team.
VM and Valorique is not a fashion or a fad of the moment. The fundamental thinking within the term “Valorique “ is not a new discipline or technique with the media virtues and will not become the next ‘dot.com’ disaster. It is about applying different attitudes and greater emphasis on research methods. The Value approaches acquired their reputation of effectiveness and power of creativity and innovation from the last fifty years through many heavy or light applications in companies or organisations. The majority of episodes focused on products, processes or the services. All we are doing is calling for the next stage in this field’s evolution to take account of the Schumpeterian impact digital technology has brought. We are presented with opportunities only if we are willing to relax our previous modes of practice. If we do not then the “Creative Destruction” of Schumpeter will render our field obsolete and irrelevant.
MbV and Valorique are confronted today with a requirement of defining steps, methods or techniques which constitute the basis of them. And in this respect, the explosion of digital technologies and the development of practices of exchange, of information-division within networks, become themselves interesting models of virtual organisations which can facilitate this actualisation, and even change our attitudes from ‘Management of Value’ to ‘Management by Value’. But it is especially the intelligent and voluntarily, creative coupling of Valorique and the dynamics of information, knowledge and networks which should support and stimulate innovation and especially useful innovation that leads to a sustainable mode of consumption of natural resources.
Just as knowledge is only ever in the heads of people, the ability to inform is the key to better innovation. The traditional adherence to a rigid series of steps carried out in a prescribed weekly schedule is no longer the best way for VA or VM to deliver value. The time has arrived for a more integrated approach that unites stakeholders in facilitated information exchanges where the act of design, development, realisation and value are unified. The time has arrived for our field to adapt or sink under Schumpeter’s “Creative Destruction”.
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