Page 49 - Global Focus, Issue 2, 2018

Creating value – value co-creation and value destruction | Peter Stokes, Gautam Mahajan, Gerardus JM Lucas and Paul Hughes

Embedded in value-creation processes,
be they SDL or others, are surely important
notions of empathy, compassion,
authenticity, enjoyment, credibility,
honesty, empowerment and accountability
to mention but a few

the driverless car: the value it offers existed On the one hand, a good example would be
but was not noticed or taken seriously for a situations where natural resources such as water
long time. and air are used with detrimental consequences
Thus, intermediaries and parties in parallel for society yet no means is available to have
complex distribution channels are also likely individual economic agents take into consideration
to play a role. Thus, overall, relationships and the destruction they cause. On the other hand,
relational dynamics within firms and networks unintended consequences of economic activity
plus inter-dynamics between firms, customers can generate value over and above what is
and other stakeholders emerge as paramount factored into the prices charged for realising
in notions of value co-creation. that economic activity. A good example is that
Implicit in these dynamics, and perhaps less innovative industrial and architectural design
explored, are the individually held beliefs and creates aesthetic value enjoyed by third parties.
attitudes which must accompany any creation Greater understanding of value and its creation,
or perception relating to value creation. allows us to address negative externalities and
Embedded in value-creation processes, be harness positive ones. In this age of big data
they SDL or others, are surely important analytics offering detailed insight into all aspects
notions of empathy, compassion, authenticity, of corporate activity, the potential for companies
enjoyment, credibility, honesty, empowerment to put value creation at the core of their business
and accountability to mention but a few. has been unleashed.
At a more abstract level, these developments
in our thinking on value, and the creation
thereof, may help us deal with the utility
measurement problem economics has About the Authors
Professor Peter Stokes – Leicester Castle Business School.
contended with for a long time. Because Gautam Mahajan – President, Customer Value Foundation.
observed prices (willingness to pay) are not an Dr Gerardus JM Lucas - Leicester Castle Business School.
exhaustive measure of utility externalities occur. Professor Paul Hughes - Leicester Castle Business School.
47