Value recognition

Value emergence and value recognition
Dr. Adam Tacy PhD, MBA avatar
What we’re thinking

Value emerges through progress…but is the value that progressively emerges, well, valuable?

Or, to put another way, how does a seeker feel to: get 80km of a 100km journey; learn some Mandarin Chinese; half hang up a picture?

It turns out the answer is: it depends.

Whilst value incrementally emerges as progress is made – from none at progress origin to maximum at progress sought – the progress seeker needs recognise it for it be become something of substance. Like accountants recognise revenue.

A seeker’s recognition schedule often differs from when value emerges. It might be milestone based, after each progress making step, only after reaching progress sought, or one of many other approaches.

Editing below here

We take an unusual, but ultimately powerful, approach to value in the progress economy. We’ve already talked about value emerges through progress (no value at start of journey, and maximum if we reach the desired end) rather than the traditional view of it being embedded by manufacturers.

Now we can reveal that this emerged value is “useless”. It is not until a seeker recognises emerged value that it becomes, well, valuable. We’re borrowing the accounting concept of revenue recognition. And they may recognise value in a wide range of ways – periodically, after each meaningful progress step, only at the end, etc.

Now we can see why the answer to the deceptively simple question “how valuable is reaching 80km of a 100km journey?” is “it depends…”.

Value recognition is the process through which value emerging through progress converts to value (co-) created. It has has parallels to the accounting process of revenue recognition.

For instance, what is the value created when reaching 80km of a 100km journey?

One seeker might see 80% of value has been created. They are happy having made such progress to date, its kilometres in the banks, so to say, and they are comfortable making the final 20km tomorrow.

But to another seeker, who needed to reach 100km today, there is zero value created in reaching only 80km.

Recognition is unique and phenomenological to each progress seeker.

Value Recognition
Typical approaches

We borrow the accounting concept of “revenue recognition” to give a foundation. Noting that value incrementally created can be recognised by the seeker at various points. For example:

  • continuously
  • at the end of each progress making activity
  • at the end of groups of activities
  • when reaching milestones (set in seeker’s head, or more formally agreed with the helper)
  • periodically
  • only when reaching acceptable conclusion of progress

The moment of recognition usually represents the trigger point for service exchange.

After each progress-making step
After reaching progress sought/offered
Key considerations

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Discussion

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