The volume, value, money dilema

In the past, I got paid more money but felt as though I was creating a lot less value than I do now. Conversely, there have been times in the last year where I think I created a lot of value but didn’t get paid for it at all.  Of course “value” is a subjective term but this raises the question; how can we equate “value and money” within new economic models?

From volume to value

I’m still looking for a sustainable alternative to the economy of scale which has been the engine of capitalism for the last 50 years. I’m working with a lot of small businesses. Many of them have the potential to scale and need to do so to create more impact (as they are social businesses) and generally more revenue so that they can pay themselves. In some cases, this necessity to scale is at odds with their desire to remain a local, responsible, circular economy business.

When listening to Michel Bauwers , he referred to the shift from “volume to value”.  How can we earn a decent living creating value when everything seems to be structured around earning money in exchange for “volume”. Even crowdfunding platforms have a business model which is volume based rather than value based. I think one of the biggest challenges here is that we are accustomed to measuring volume and we have very little common understanding of what “value” is, not a mind start measuring it.

In my case, I regard value creation as being the following:

  • reducing the ecological bubble – helping businesses which can create and measure positive environmental impact
  • economic bubble – helping transition resources from the capitalist, volume driven economy to the creation of local jobs which also create positive social & environmental impact
  • social bubble – helping people understand what makes them happy and aligning their professional lives with this. Reduce burn-out, stress, hierarchies structured on power and many other symptoms I see in people who dislike their jobs

Michel Dekemmeter and his team, specifically Paul Mauhin, have done a lot of work in helping companies understand the value they create beyond money. Worth watching (in French)

Who pays for value?

There are positive signs that the shift is accelerating. There is a growth in social investment funds such as http://www.fundsforgood.eu. Triodos bank has also grown at a rate which outstrips that of traditional banks and they are trying to bridge a gap between capitalism and value. There are lots of successful crowdfunding campaigns which also illustrate the fact that people will contribute money to value creation such as:

Too many people I discuss with would like to have a value creation model rather than a volume model but don’t seem to understand the value they are creating. They still focus on “what they do” rather than the impact of what they do. In some cases, they feel forced to do this as “people just don’t get it” when they talk about reducing the bubbles I mentioned. Lots of people say, wow, that’s cool, good luck with that. Not enough say, wow, I’ll pay you to do that. It is why being a social entrepreneur can be so difficult.

There is the temptation to look towards governments to sponsor this change, as they have funded “value” through NGO’s for decades. Unfortunately, there is less and less public money available to fund this. So it is up to us, the consumer, to start financing value creation. Rather than look at “what we get for our money” we need to look at “what value will this money create when I spend it”?

That is a big big change in behavior.

Pay more for less

I’m afraid, this is what it boils down to. Rather than wanting to pay less and get more which most marketing campaigns focus on selling now, we need to think about paying more, getting less volume but creating more value.Collaborative economy Belgium

The second thing which we need to consider is that we need to measure not just the benefits for ourselves personally, but how others around us benefit, including our kids, their kids etc… this is the shift from “Ego to Eco” which Otto Scharmer discusses in his book http://www.ottoscharmer.com/publications/books .

As a person who is actively changing my own “business model”, I can say that the benefits of doing so in terms of happiness, work life balance, stress reduction etc… are great.

If we don’t consider the “common good” and we don’t think about what value means to us, the volume economy will remain, together with all of the negative side effects on the environment, society and ourselves.

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