The new valuation
22-Feb-04
THE NEW VALUATION (dedication : Isabella, age 7 Valentine's Day)
The attached future history of economics and society at every locality isn't precise. That's the point. I will be inviting people to rewrite it as a living document that communicates to different professions and contexts whilst threading through the same benchmarkable origin. Which of these people will come here to discuss it , I have no idea.
| 11 Feb: at KB trying to resolve conflict between New KM view and Denham Grey Tacit/Community views; at ChatQ were storytelling, other human system practices of purposeful identification and human learning such as Open Space all victimsed by accountants' intangibles hole in their balance sheet. Did accounting's subsequent motivation seek to separate human disciplines whose wisdom might have more quickly connected how irrevelevant the accounting monopoly of performance measurement had become to the future of valuing...? |
| March 1 : http://www.well.com/conf/inkwell.vue/ The Well debates whether an organisation is to be systemised around what a few people want to take out or what the many want to openly produce |
However, I will tabulate above in a rolling register the issues I thought they could have knowledge shared with us if I had written the attached better, and which maybe you may select from in case you see some conversational spaces you want to pilot with THE NEW VALUATION?
Chris Macrae ,wcbn007@easynet.co.uk
PREVIOUSLY
Seeing the 8 most valuable and strategic exchanges of an intangibles rich firm
Measurement experts now generally agree that over 75% of most firms’ value is dynamised by intangible relationships (Brookings/Lev, EU, Harvard Balanced Scorecard Collaborative, Allee & Tapscott & E100 & KMCI)
The most transparent way to map relationships is through exchange-based perspectives of a firm. An exchange concentrates on two interactive foci and how transparently knowledge flows around these participants as judged by how their actions are systemised over time.
There are 4 primary exchanges of valuation.
How much do owners value key customer segments and vice versa?
How much do owners value key employees and vice versa?
How much do owners value business partners and vice versa?
How much do owners value societies and vice versa?
Each of the vice versa’s explains a critical difference between intangible’s relationship metrics and ones that are only figuring tangible transactions. For example, in open competitive markets, the extent to which customers value owners ultimately explains whether a value system is spinning growth or destruction. Equally if a company is in a service or knowledge market, it is vital that some employees value owners. If a company wishes to succeed in globally networked industries, it needs to be valued for transparency by selected business partners. Ultimately as Andersen discovered, democracies licence companies to operate so ultimately a company doesn’t work if societies see no value in the ownership.
There are 4 primary exchanges of strategy
Do people learn from strategy and strategy learn from people?
Is service and teamwork consistently and emotionally energised by strategy and vice versa?
Is a network of business partners resilience and innovative adaptability made transparent by strategy and vice versa?
Does a society sustainably benefit from a firm’s strategy and vice versa?
Once you have mapped how all of these 8 exchanges interconnect, you will start to want to benchmark system pattern rules of intangibles strategy and valuation. Pretty quickly firms are seeing that they need to conflict and connection resolution audit carried out at the same cycles as traditional transactional accounting. The threat to avoid is being zeroised by complete ignorance of any of the above 8 exchanges both at knowledge and behavioural levels. The advantage of being more competent that any other firm in your industry at exchanges is not just market leadership but the sustainable value dividends that compound from leading a network globally and locally in every transparent way that people want.
(Transparency declaration: My thinking on exchange-based theories of firms, to the extent that it is useful has been most heavily influenced by Verna Allee whose micro-economics theory of exchange-based firms is far in advanced of this macro-based mapping which is asserted as the open source property right of the transparency communities that congregate at http://www.valuetrue.com and associated open webs and spaces.)
Chris Macrae, wcbn007@easynet.co.uk
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If you want to publish a brochure like this please tell us at wcbn007@easynet.co.uk which editing changes you wish to make so we can know of all releases in every local context. To sell 10 billion consultancy you should have checked certification quality requirements with Oliver Schwabe01-Mar-04 -
The New Valuation (34 Kb)A future history of how the world's largest organsiations lost and found all systemic sense of human valuation (aka goodwill , intangible capitals); and the knowledge of conflict resolution transparency needed to govern all networked age business and social models designed to sustain growth for all trustworthy people, inclusive of those in most desperate need or at the centre of the greatest innovation challenges.11-Feb-04 -
Simplifies a common language for questioning the value of work involving putting on and off 6 caps which we all wear as humans: Communicate, Action, Learn, Link, Earn Money, Earn Trust. What can be modelled between people, can also be modelled between teams, businesss units, CoPs, business organisations, networks and societies should we wish to make the nature of human productivity a systemically democratic inquiry. CALL can evolve as a way of mapping the value exchange based theory of firms and intangible capitals. Call Value mapping conversations and benchmarking are assertes as the open source property rights of Transparency CoPs of www.valuetrue.com, 2004 Year of Transparency.13-Feb-04
- Author:
- Chris Macrae
- Publisher:
- KnowledgeBoard
- Date:
- 22-Feb-04
- Categories:
- Emotional Intelligence, Knowledge Angels
- Sections:
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Time to study the goodwill multipliers of networked models of business
Networked models of organisation are in equal measure - fascinating, and scary
If you will accept today's emerging wisdom 1) that at its scale a typical organisation's model of goodwill has the capacity of 10-win and 10-lose, then value multiplication means that if 2 organisations with totally different roles but a common good ever developed a true network mosel of the square of their systems, its value relationship multipliers can reach 100-win or 100-lose
For example we would argue that the way governments and corporations interact/network the intellectual capital of a nation is becoming a 100-win or 100-lose game - a matter of even greater public interest and urgency than mapping the human genome, if in an odd way even harder to get an initial comprehension of
Consequently, we really ought to be discussing here what examples already exist. I put it to you that the dotcom bubble was an early example. There was hardly a dotcom that had a sustainable existence without a network model of partners, even though the failure to realise that at the time was one of the reasons the bubble exploded. The other main reason as documented at this inquest log of dotcoms was the mad fast burn development plans and monies spent on organisations that needed very slow (low cost) development until they knew their networking capabilities - both their own and that of partners they were relying on. So in effect the bubble was created by a dream race to a 100-win value growth that was so badly executed that people got nearer a 100-lose from the dotcom era. This does not mean that network models of organisation cannot be designed to achieve 100-win value multiplication but that we must learn to account in very opposite ways from that which ruled dotcoms.
I wonder if I am the only one at this thread who could think of an another analogy much closer to EU home.
Chris Macrae
(Paralllel globalisation thread: Be the Change)
letter to the Well's conversation on new valuation
http://www.well.com/conf/inkwell.vue/
My co-authors and I have been researching the mathematical system dynamics of goodwill (aka valuing intangibles) for 5 years. Personally, I entirely agree with Art Kleiner's diagnosis of the 3 greatest lies corporations tell about caring for customer, employee and owner value. To restore governance of corporations to serve everyone, we have ten value multiplier coordinates most simply mapped as paired relationships of productivity and demand.
On the demand exchange, ask the leader of the organisation, which of these 5 stakeholders' greatest non-monetary needs are you prepared to be wholly accountable to ensuring its priority of delivery is what the gravity of the company's win-win communal purpose revolves around: employees, customers, long-term owners, business networked organisations, societies at different global localities?
On the productivity side, ask this simplified 3-way question: as well as hierarchy is your organsaition designed to transparently multiply the productivity of at least one 'preneurial segment (be these teams, personal networks, practice communities) and at least one boundary to and from another networked organisation. If the leader stutters on any of those 8 connections with value multiplication, I would suggest distancing yourself from that organisation in whatever stakeholder ways you and your networks of friends can. Because its in the process of spinning value destruction of goodwill, in all value compounding likelihood it will catch a terminal ilness within the next 3 years.
Art is clearly already modelling the demand side. The reason why we connect the productivity side too can be illustrated by this query: how many global coporations do you know of that suffer from the productivity cancer of valuing the strategy and pay of the top 30 people more that all the knowledge, productivity and value service of the other 29970?
Chris Macrae www.valuetrue.com wcbn007@easynet.co.uk
(if you publish I do prefer my email mentioned if choice is available but my co-authors prefer not to have theirs published; thanks)
New Book - Knowledge Economics: Principles, Practices and Policies
You can see the Prospectus for a forthcoming book to be published by the Tartu University Press - http://www.entovation.com/coming-soon.htm.
The Chapters are authored by members of the E100 to provide readings in order to educate the new generation of researchers, professors, teachers, industrial and government leadership professionals.
The principles of knowledge economics ought to be endorsed as a revolutionary change - an opportunity to provide a solid foundation, rationale and vision to substitute something more sustainable than the old regime of traditional economics. Intelligent and innovative explorations of computer capabilities help optimise individual and collective work of employees and the entrepreneur.
updates on open conversations on future/history of human valuation
Issues connected today with THE NEW VALUATION
at KB trying to resolve conflict between New KM view and Denham Grey Tacit/Community views-can we learn from this analogy: how brand people become too expert in tacit communications (eg storytelling , mind associations with perceptions) and did KM people become too tangibly and quality information systemic? could we catalogue one or two favourite methods of each of the four quadrants:
KM Tacit Communing
KM Truth/Info/Quality Systemising
Brand Tacit Promising/Identifying
Brand Trust-flow systemising
(do you have different names for these qyadrants, or indeed further sub-divisions of how the whole curriculum of KM branches?)
at ChatQ cafe, rehearsing Beyond Branding:
were the human system practices of purposeful identifcation and human learning both victimsed by accountants' intangibles hole in their balance sheet and subsequent motivation to separate human disciplines whose wisdom might have more quickly connected how irrevelevant the accounting monopoly of performance measurement had become to the future of valuing; have other disciplines been divided and conquered; where will all human disciplines chat and reunite as the meta-discipline that organises the vast majority of all future value and innovation, as well as dep caring human responsibilities for people's trust, lifeTIME and transparency of investments (both economic and social)
what they wont teach you at Harvard- the sequel
As a rather sad update on the 1980s? book 'what they wont teach you at Harvard Business School', it seems that the exchange-based firm as the core paradigm of the networking age wont be on Harvard's curricula for years to come
As a mathematician I can state that the trouble is activity, process and competence based view of the firm cannot mathematically be translated into the dynmamics exchange-based maps. So instead Harvard -and all the strategy/academic schools that hub through it - may be destined to make a lot of noise around mapping books that try to put back the clock, preserving the traditional accounting and performance management rulership that made Harvard centre of business opinion in the 20th Century.
see my Amazonian review at http://www.amazon.com/exec/obidos/tg/detail/-/1591391342/ref=cm_cr_dp_2_1/002-2921814-9972016?v=glance&s=books&vi=customer-reviews. Then try the acid test: look through strategy maps and K&N's strategic readiness in one hand and look at the latest research on intan gible valuation at http://www.euintangibles.net. You pays your people's time and emotions as well as your money, and in this case bets the future of your firm on which school sees how to govern the future of networking dynamics at true contextual purpose levels that transparent leadership needs
and then do come back here and debate whether you want to see the future with value exchange based systems or balanced scorecard derivatives...
valuing 3 great human intangibles
When you start mapping with exchange-based valuation theories of firms and societies rather than process-based ones, you get the opportunity to probe every exchange for how its richness of intangible components are visualised as compounding
I find three broad lenses extraordinarily valuable because they are constructive tensions to ones that the financial capital lens reveals
people's time- and access to action learning that makes the most of their talents- this time-based map seems to be the fundamental policy colouring of human capital, agency and practice community in a networked world, how each of us finds our 10 greatest individual mentors as well as organisational spaces to rent our productivities to or to help design stability of purposeful systems with
trust-ful emotions , behaviours, whether the knowledge sharing is true to furthering a vision that progresses sustainable value growth for all, or just some political roundabout that erodes context- root cause of the latter is no metrics to govern deep gravity as opposed to many standard metrics that dilute it and no quality system to resolve conflicts as the world outside changes or knowledge networks internally morph (eq a quarter of the value upside of a firm over the next 3 years is often down to 5 people the board doesnt know unless they use SNA mapping)
transparency at borders between organisational systems; without this we never start to have collaboration between nations; so unless transparency between borders is understood, we at http://www.valuetrue.com (and the quarter of our compass concerned with the most urgent humanitarian responsibilities) have deep concerns as to whether the EU's 25 countries will compound as more than their parts - show us the transparency maps- similar remarks-openness of value exchange at the borders - applies to sub-system networks of excellences and practice communities
AS you can see these 3 very simple value dynamics- time, trust-ful benchmarks flowing through all emotions and behaviours to whether knowledge-sharing is constructed around open truths, and transparency between systems take you into some very hot contextual waters before you get to the other side of conflicts; but that is the system challenge that networking knowledge leadership system tools have been gearing up to for over 20 years; there are now pretty splendid tools with over 100 different origins, should we wish to value people's time, trust and the overall transparency between different typologies of the world's largest organisations - see also http://www.intangibles.net
any method that connects KM and people's learning or doing
So do you have a favourite method you'd like to chat about to see how to describe it connecting ways rather than separating ways?
For example, 2 years ago I got very interested in talks with the head of a risk professional association. What interested me was his members were always being asked to make the 'business case' for everyone one of their most vital activities in a separate way whereas many seemed systemic to me - a no brainer if you didnt invest in that, the whole company coukd implode like a pack of cards. There are lots of disciplines whose value needs to be multiplied in their interdisciplinary visualisation not just their siloisation. The 'strategy' of justify your separate business case is one of the signs that management doesnt know how the whole value of intangible relationships compounds, and needs help in benchmarking that - just like 20 years ago companies needed to benchmark how to make physical quailty systems more whole.
Blogsworth
Because I was getting collaborative inquiries from about 10 disciplines and 20 communities, thought I better blog (something I'd promised ?)