What is value?

Dr. Adam Tacy PhD, MBA avatar
What we’re thinking

We’re breaking free of the historical view of value.

Once you free your mind about a concept of harmony and of music being correct you can do whatever you want

Giorgio Moroder

Channeling Giorgio Moroder: Once we free our minds about the traditional concept of manufacturers embedding value and exchanging it for cash (value-in-exchange), we observe value-through-progress. Where seekers realise maximum value upon reaching their progress sought (and see no value at their progress origin). It naturally follows that value really emerges, incrementally, as progress is made.

This has profound implications: we see value as a trailing measure of progress; it s co-created during progress attempts; progress seekers predominantly judge value (potential progress, progress reached); and innovation should focus on improving progress (from which increased value emerges).

Value emergence and value recognition

However, for emerged value to be meaningful to a progress seeker, they need to recognise it. Value recognition is a process akin to accountants recognising revenue. Often this recognition runs on a different schedule to emergence.

Finally, if progress is hampered or not as expected, we might experience value destruction.

What is Value?

Let’s talk about value. It drives our fundamental understanding of how the world works. Our view of value reveals who creates it, as well as how, and when. And it sits right at the heart of our definition of innovation.

The traditional view

According to Merriam-Webster, value can be seen as both a noun and a verb:

  • noun:
    • the monetary worth of something
    • a fair return or equivalent in goods, services, or money for something exchanged
    • relative worth, utility, or importance
    • something (such as a principle or quality) intrinsically valuable or desirable
    • something (such as a principle or quality) intrinsically valuable or desirable
  • verb:
    • to consider or rate highly
    • to estimate or assign the monetary worth of
    • to rate or scale in usefulness, importance, or general worth

This is the value-in-exchange view of the world where value is a property of things – goods or services. We see value as being embedded by manufacturers/service providers and signalled through price. The more valuable something is, the more we’ll pay to get it.

Whilst customers may vote with their feet if they think price asked is too much, under a value-in-exchange view, it is manufacturers that predominantly judge value. McKinsey tell us:

A product’s value to customers is, simply, the greatest amount of money they would pay for it.

Golub, H., and Henry, J. (1981) “Market strategy and the price-value model” via “Delivering value to customers”, McKinsey (2000)

In such a view, innovation is a means to embed more value in things.

However, defining value is not so simplistic as it appears on the surface. There are various notions of it:

…use value, exchange value, aesthetic value, identity value, instrumental value, economic value, social values, shareholder value, symbolic value, functional value, utilitarian value, hedonic value, perceived value, community values, emotional value, expected value, and brand value are examples of different notions of value, which are frequently used without having an explicit conceptual understanding in marketing and consumer research.

Karababe, E. and Kjeldgaard, D. (2013) “Value in marketing: toward sociocultural perspectives”

Worryingly, despite being the leading and wildly successful view of value for centuries, value-in-exchange has consequences for growth. It encourages us to over focus on the point of exchange. We miss opportunities before, after, or that cross that exchange point. Additionally, focusing on an exchange blinds us to other business models that are not based on a single point of exchange (subscription, product as a service, etc).

An evolved view

A new perspective on value has emerged in recent years. It comes from a shift in thinking – from a goods-dominant logic, where goods take precedence and services are considered secondary, to service-dominant logic, where everything is viewed as a service.

In service-dominant logic, we shift to recognising that value emerges through the process of reaching outputs, rather than being embedded in the outputs themselves. As Grönroos aptly puts it:

It is of course only logical to assume that the value really emerges for customers when goods and services do something for them. Before this happens, only potential value exists

Grönroos (2004) “Adopting a service logic for marketing

Thus we find the concept of value-in-use – value being created through the use of things. We use phrases like ‘value co-creation‘ to underscore the now joint nature view of value creation (as compared to being embedded by one actor and thrown over a sales wall to another).

This shift in mindset has a profound impact on our perspective. Notably, we now see service – “applying skills and knowledge for the benefit of another” – as the basis of exchange, rather than value. And that goods are mechanisms for transporting service in time and space – removing an unhelpful goods vs service debate in the value-in-exchange view.

Service-dominant logic also shows us the we need to view who judges value differently:

  • manufacturers/providers can only propose value
  • only the beneficiary can determine value

In a value-in-use view, innovation seeks to make things more useful and increase value that is co-created.

However, this evolution still doesn’t explicitly answer the question – what does value actually mean?

Evolving more: the progress economy

Value-in-use represents a significant evolution in comprehending how our world truly works. But it still focuses on value – which we know is difficult to define. Perhaps this was necessary to explain it as an evolution rather than revolution to value-in-exchange within marketing (as Vargo & Lush explain when introducing service-dominant logic).

Back In value-in-exchange view, value is equated to price (or demand), providing, rightly or wrongly, a measurable and meaningful perspective. One thing is considered more valuable if it costs more than another.

In the absence of an exchange, value-in-use implicitly positions value as the effectiveness of a proposition in helping individuals achieve something. However, measuring this view of value poses an unanswered challenge – how? In turn, raising questions about how we can quantify and enhance propositions (innovate).

The progress economy provides a compelling answer by building on service-dominant logic and introducing the concept of progress. We’ve arrive at value-through-progres – value emerges as progress towards progress sought is made.

Progress – comprising functional, non-functional and contextual elements – is much easier to define, understand, and reason about than value. It is also measurable, albeit sometimes on artificial scales.

What is value? It’s a trailing metric of progress reached and a prediction of potential progress that may be made. Click To Tweet

In this context, we now see value as an indicator, and judgements, of progress – of which progress potential, reached, sought, and offered are useful states/measurements. There is:

Notably, the value that emerges through progress needs to be recognised by the progress seeker to become meaningful to them. This recognition, akin to the revenue recognition process in firms, may occur on a different schedule than emergence. It explains why the same proposition holds different value for various seekers and even for the same seeker under different contexts or conditions.

Innovation is no longer an act of adding value. It becomes an act of finding ways to help a progress seeker make better/more progress towards their individual progress sought from their individual progress origin. From which we identify six hurdles to progress, which innovation should also address.

The focus on progress allows us to explain how price detaches from value and becomes related to effort required in equitable service exchanges mediated by service credits…but that story is for another time.

Ready to explore this fascinating world of value? Let’s start with the traditional view and see why it’s hindering innovation, growth, and the circular economy.


When most of us think of value, we usually think of monetary worth. This is the value-in-exchange view.

value-in-exchange: A view of value creation that sees value as a property of goods/service. Manufacturers embed value through taking an input and creating an output. Value is realised at the point of sale by exchanging for cash. From which point the customer proceeds to use-up or destroy that embedded value.

We give goods and services a property we call value. Everything we look at – whether it is goods or services – has some predetermined, usually by the entity offering it, value; and we’re willing to exchange cash to obtain it.

McKinsey goes as far to say:

A product’s value to customers is, simply, the greatest amount of money they would pay for it.

Golub, H., and Henry, J. (1981) “Market strategy and the price-value model” via “Delivering value to customers”, McKinsey (2000)

Value-in-exchange forms part of what Vargo & Lush call the goods-dominant logic. Reflecting our every day experiences – buying food, paying for transport, subscribing for music and films, and so on.

How it works

Here’s how we visualise value-in-exchange.

Successive manufacturers along the supply chain embed additional value by transforming inputs into outputs. For example, a car is considered more valuable than its individual components, such as the engine, wheels, and body parts. The engine, in turn, is more valuable than the metal block from which it is engineered, and so on. Even the metal block is deemed more valuable than the raw earth material from which it is initially mined.

The end product, now enriched with embedded value, is typically exchanged with an end customer, usually for cash (something we also see as having value).

Now that the end customer owns the embedded value, they start using it up, or more violently destroying it; or both. For instance, we all recognise the moment a car is driven away from the dealer its value plummets. Subsequently, the remaining value is gradually used up as the customer drives the car (through wear and tear).

Whilst services are somewhat different, we force them into the same view. In that producers embed value in a service that they exchange with consumers for cash. The consumer consumes that value.

The benefits

Value-in-exchange thinking is the foundation of neoclassical economics with roots captured in Adam Smith’s 1776 “Wealth of Nations”.

It has been wildly successful – look at the growth we’ve had since Adam Smith’s time. We can use Gross Domestic Product for England as a proxy for economic growth. It has increased from £14.6 billion to £1.67 trillion by 2016 (adjusted for 2013 prices! (source)).

But it is a way of think8ng that often, and unintentionally, constraints our growth thinking (and therefore innovation).

The constraints

The point of exchange, whilst a useful focal point, ultimately channels manufacturers away from growth opportunities. We can become distracted by maximising size/number of exchanges of existing product scope…and keeping to business models that revolving around selling product.

Prahald and Ramasawan sum up the implications and manifestations of value-in-exchange thinking in their 2004 book “The future of competition – Co-creating unique value with customers”. It’s recreated here.

When we believe value is created by the firm, we believe the outputs of the firm – goods and services – are the basis of value. The implications being that the point of exchange is the focus of value creation. Leading the firm to create and deliver a variety of offerings.

This manifests in firms focussing on value chains and internal processes – not external needs or what happens before or after the point of exchange. With innovation focussing on technology, products and processes.

All this hopefully sounds quite familiar, and probably good. Except we risk:

  • missing opportunities before, after, and across the point of exchange
  • becoming shortsighted on solution space and business models
  • finding value predominantly judged by manufacturer

Let’s look at our these constraints in a bit more detail.

Missing opportunities before the point of exchange

Focussing our attention on a point of sale encourages us to favour consistent products that demand minimal customer involvement. The ability to mass-produce identical items lowers costs and provides the same repeatable value. This makes goods attractive to us.

Goods have long been regarded as advantageous due to various properties. Manufacturing and usage can be separated, distinguishing the embedding of value from its usage. Tangibility allows the creation of inventories, further supporting and reinforcing the value-in-exchange perspective.

Services, on the other hand, have intangibility, heterogeneity, inseparability and perishability (Zeithmal, Parasuraman and Berr’s “Problems and Strategies in Service Marketing”). Later becoming the 5Is, services are:

  • intangible and you cannot create an inventory.
  • inconsistent
  • where delivery and consumption are inseparable and require customer involvement

These are the opposite of goods. This encourages us into with what Vargo & Lush term goods-dominant logic, where goods take precedence, and services are considered poor relatives. We end up in a goods vs services debate.

But does this hold up in our modern world? Not totally. Today’s goods are increasingly intangible. Digital goods like streaming music, videos, and eBooks eliminate the need for inventories, as creating and distributing copies becomes instantaneous. Even for tangible goods, modern strategy is to minimise inventories through approaches such as just-in-time inventory management. Whilst the future will witness a diminished importance of inventories through the widespread adoption of 3D printing, transitioning more goods into a digital format until needed.

As for inconsistency, inseparability, and customer involvement, Vargo & Lush argue in “The Four Service Marketing Myths“ these are positive attributes:

  • inconsistency should be seen as customisation
  • inseparability / involvement are required for co-creation of value

These attributes are all things that should be addressed before any point of exchange. In fact, they rather suggest we should erase any point of (value) exchange.

becoming shortsighted on solution space

Another constraint when we focus on the exchange is that we risk falling into Levitt’s “Marketing Myopia” trap. Where we see customer’s problems defined by our own existing solutions. We’re unable to see the wider picture as that does not fit with our view of exchange.

The danger with falling into the marketing myopia trap is other entities, which we may not initially see as competitors, offer customers better value and we become irrelevant.

Numerous examples illustrate this phenomenon in the business world. Levitt’s primary example was the U.S. railroad industry, which was so fixated on operating railroads for freight transportation that it missed the growth potential of air freight.

becoming shortsighted on business models

Growth can also come from altering our business model. Though a focus on exchange risks making us myopic to different business models.

Transitioning from selling vinyl records to CDs, for instance, is relatively straightforward – it’s still fits into a value-in-exchange mindset; its just using a different type of goods.

However, making the leap to a business model centered around selling subscriptions to content, such as online streaming, represents a more radical departure. This shift has proven challenging for the recording industry, highlighting the difficulties that arise when attempting to adopt new models outside the traditional goods-for-cash exchange.

Similarly, embracing business models like Products as a Service or participating in the sharing economy can be formidable challenges for businesses deeply rooted in the value-in-exchange mentality that has been successful for over 300 years.

However, you may recognise the notion of a “shift to services”. This reflects an ongoing perceived shift from purely selling goods to offering those goods wrapped in services. So this is not impossible.

Missing opportunities after the point of exchange

It’s not just before, or at the point of exchange, where value-in-exchange thinking risks constraining growth. What happens after the exchange is also not usually of interest to us. That’s because we’re busy trying to make the next exchange.

As far as value-in-exchange informs us, the customer is off using up/destroying the value we embedded. Which is a good thing, since that means they’ll soon need to make another exchange.

In reality, however, the customer is likely trying to recover some of that value. We’re missing out on growth opportunity of helping them.

Take our car example. We’ve said that once you drive away from the dealer, part of the value is destroyed. Then you drive the car around using up the remaining value until the car becomes junk metal.

But you’ll also try and preserve and extend value by regularly servicing the car and repairing any damage. You might add after-market parts to increase value. And you’ll probably look at selling the car to recover what value is left.

We should update our view of value as shown below.

These repair, recycle, refurbish, resell growth opportunities are not often met by the manufacturer. Which may be a valid strategic decision – if it is a concious decision and not just missed opportunities.

There is a “worse still” part here – are we missing the circular economy.

not harnessing the circular economy

The value-in-exchange model, with its ’embed-exchange-use/destroy’ approach, seamlessly aligns with the linear economy’s ‘take-make-waste’ model. In fact, it is advantageous to the producer that the customer uses value up as quickly as possible so they need to make the next exchange.

This stands in stark contrast to the principles of the circular economy. A sobering observation from the 2024 Circularity Gap Report highlights a 21% drop in the share of secondary materials consumed globally from 2018 to 2023.

The share of secondary materials consumed by the global economy has decreased from 9.1% in 2018 to 7.2% in 2023—a 21% drop over the course of five years.

Circle Economy Foundation (2023) “The Circularity Gap Report 2024

And I would point to value-in-exchange as a reason. If we’re less interested in what a customer is doing the other side of the exchange, we’re not encouraged to design our products to support that. Why spend effort making something recyclable, or repairable, if that gets in the way of an exchange?

The Ellen MacArthur foundation recently came to a similar conclusion:

one of the biggest challenges…to transition from linear to circular is that it requires…revisiting the very notion of value creation

Ellen MacArthur Foundation (2023) “From ambition to action: an adaptive strategy for circular design

Of course, sometimes external parties might require us to be more circular than is necessary from a value-in-exchange view. For example, several countries require deposits on plastic bottles, which are returned when the bottle is put into the recycling process.

Getting comfortable with incremental innovation

The influence of value-in-exchange thinking also extends to our innovation ambitions. Concerns over disrupting the flow of exchanges, we often limit our innovations to those we would term incremental – enhancing existing products or refining internal processes. Radical innovation, involving substantial transformation, appear too daunting and risky.

We end up adding yet another razor blade to the shaver cartridge rather than innovate a new ways of shaving.

It’s not that incremental innovation lacks the potential for growth; rather, there’s a limit to the number of increments before achieving additional growth becomes increasingly challenging.

Radical innovation, however, has the capacity to reshape or establish entirely new markets.

As for disruptive innovation, well, that is a specific approach that may not align with your thinking (Uber, for example, does not fit the true definition of disruptive innovation).

judging value is done by the manufacturer/provider

Finally, value-in-exchange thinking sees the manufacturer/producer as predominantly judging value. This is why you see so many pitches on Shark Tank/Dragons Den with wild valuations. Or inventors that have sunk so much money into ideas that are going nowhere. Its not just individuals that get it wrong. Supermarkets have decided that self-service checkouts have great value to shoppers…and that’s not working out too well.

While value-in-exchange has undeniably fueled significant growth in the past, the exclusive focus on the point of exchange comes with limitations and missed growth opportunities, as highlighted earlier. Embracing a value-in-use perspective presents an evolved way of thinking that allows us to tap into previously overlooked avenues for growth.

editing from here down


Rather than see value in outputs/outcomes – goods and services – what if we saw value in the process of using them. As Grönroos lays out for us:

It is of course only logical to assume that the value really emerges for customers when goods and services do something for them. Before this happens, only potential value exists

Grönroos (2004) “Adopting a service logic for marketing

This brings us to our first evolution in thinking about value: rather than value being embedded and exchanged, value comes through using goods and service – value-in-use.

value-in-useA view of value creation that sees value being incrementally co-created through using service (where goods are a mechanism for transporting service in time and space).

Value-in-use is the basis of service-forward logics – such as Grönroos’ Service Logic or Vargo & Lush’s Service-Dominant Logic. Such logics remove the point of exchange, preferring to see an ongoing interaction.

We’ll concentrate on Vargo & Lush’ service-dominant logic.

How it works

In the value-in-use view of value we see value as being co-created as products are used.

We start with Grönroos’ observation that no value is created when a product is unused. It is only as products are used that value emerges. Additionally, we see this value as being co-created. That is to say that both the provider and beneficiary work together to create value.

But actors cannot deliver value, thay can only offer value (a proposition):

Actors cannot deliver value but can participate in the creation and offering of value propositions


And only the beneficiary can judge if value has been created

Value is uniquely and phenomenologically determined by the beneficiary


It’s a way of thinking that puts service first and then attempts to explain goods. Which starkly contrasts with value-in-exchange way of awkwardly seeing services as poor relatives of goods (intangible, inconsistent, etc). We find service is:

application of competence ( skills and knowledge) for another’s benefit

Vargo & Lush (2008)

And that goods freeze service, allowing it to be transported in time and space, to be used as needed:

Goods are distribution mechanisms for service provision


That might feel odd at first. Think of it this way. You could go and listen to your favourite band playing live. That’s a service. Alternatively, you could listen to the band from their vinyl record or CD. Now the service was frozen and transported to where, and when, you hit the play button on your playback device, and unfrozen.

Finally, the notion of exchange doesn’t vanish but transforms from an exchange of value to an exchange of service. I do something for you, and in return, you do something for me.

Service is the fundamental basis of exchange


This way we still see the drive why someone would help someone else. Although, as service-dominant logic informs us, this service exchange may be hidden by the often indirect nature of exchange (for example transitive exchange).

Oh, and we switch from services (plural) to service (singular) to reflect the process, not output, way of thinking.


Another term you’ll find used in service-dominant logic literature is value-in-context. This underscores the importance of considering the context in which a service is engaged when discussing value-in-use.

A car, for example, will generate less value-in-use if your destination is surrounded by deep water. We’ll come back to context when discussing value-through-progress.

The benefits

Value-in-use allows us to address the constraints we noted for value-in-exchange. Looking at value this way we increase our chances of:

  • seeing opportunities before, after, and across the point of exchange
  • fixing our shortsighted on solution space and business models
  • finding value predominantly judged by the beneficiary

Let’s take a deeper look.

Seeing opportunities before and after a now non-existent point of exchange

One considerable challenge with value-in-exchange is it channels us to focus on that point if exchange. What happens before, after or across the exchange risks being missed. Evolving to an in-use view should minimise that risk. As Ballantyne & Varney put it, “the time logic of marketing exchange becomes open-ended”.

the time logic of marketing exchange becomes open-ended, from pre-sale service interaction to post-sale value-in-use, with the prospect of continuing further, as relationships evolve

Ballantyne and Varey (2006) “Creating Value-in-use Through Marketing Interaction: The Exchange Logic of Relating, Communicating and Knowing”, Marketing Theory Vol. 6, No. 3(3)

Before the, now non-existent, value exchange we should look to customise and involve the customer. Two points Vargo & Lush argue argue for in “The Four Service Marketing Myths“:

the normative marketing goal should be:

  • customisation rather than standardisation
  • to maximise customer involvement in the creation of value

Now let’s take a moment to reflect. We don’t mean that every service must have lots of customisation and customer involvement. It should be the goal, but needs to be proportional and appropriate.

For example, a humble screw (that captures and transports knowledge on how to join two items together) is unlikely to be customisable. But there are already many different types of screws for joining different types of items together. The beneficiary needs to just pick the right one.

We should still be aiming to maximise customer involvement after what would have been the exchange. We look to continue co-creating value. How can we help the beneficiary repair, recycle, resell?

harnessing the circular economy

Value-in-use is the view The Ellen MacArthur foundation need when they say:

one of the biggest challenges…to transition from linear to circular is that it requires…revisiting the very notion of value creation

Ellen MacArthur Foundation (2023) “From ambition to action: an adaptive strategy for circular design

When we create propositions we now think only of how value will be created with use, rather than an exchange. And value creation can include what we previously thought of as after the exchange recovery – repairing, re-using, reselling etc. If, and it is not a given, the user is seeking that, then we’re encouraged to design propositions which enable that.

This might suggest a move from propositions that freeze service into tangibles (ie goods) to ones that are direct service or service frozen into intangibles (say digital goods).

But we do need think carefully. Sometimes shifting to The left side of

Seeing a wider solution and business model space

We talked about the perceived “shift to services” when looking at value-in-exchange. Where goods are swapped by goods wrapped in services or even fully replaced by services. This is a big thing in a logic that sees a goods vs services debate. In a value-in-use view, such a change is not a big thing.

With value-in-use we can more readily think about whether our proposal is a service given directly or a service that is frozen and transported. A band playing live or that performance frozen in digital goods and streamed are the same and interchangeable.

Similarly, since we’ve removed the exchange of embedded value for cash as a concept, we open ourselves to different business models – subscription, add subsidised etc.

Value is judged by beneficiary

Finally, value-in-use sees value as only being judged by the beneficiary.

Value is always uniquely and phenomenologically determined by the beneficiary


This is in stark contrast to value-in-exchange where the manufacturer judges the value they have embedded and sets a price they feel is appropriate.

Now we see beneficiaries as judging value we start to think in terms of beneficiaries choosing which proposition to use, whether to continue using it, and if they will choose it next time.

The constraints

Value-in-use is a nice evolution in thinking about value. However, there are still some constraints, namely:

  • value is still hard to define
  • removing the point of exchange leaves the concepts of money and price unclear
  • there is too narrow a focus on who determines value

And here’s what we mean by these.

What does value mean

With value-in-exchange value meant, rightly or wrongly, price. The more we pay, the more valuable something is. Now we replace value exchange with value co-creation; but don’t define what value is. It’s just something judged by the beneficiary.

When has maximum value been co-created? How can we create propositions thatoffer to create more value? What does “more value” even mean?

What does price mean?

Similarly, when we replace exchange of value with exchange of service, we loose the notion of price. Yet in our world price is something very obvious. Kowalkowski proposes:

Price becomes part of the value proposition

Kowalkowski “What does a service-dominant logic really mean for a manufacturing firms?”

whilst Ingenbleek determines:

price is the reward for the application of specialized knowledge and skills

Ingenbleek (2014) “The theoretical foundations of value-informed pricing in the service-dominant logic of marketing”, Management Decision 52(1)

But “how is price set?”, “what is profit?”, and “if it is a reward, when is it realised?” are all valid unanswered questions.

Too narrow a focus on beneficiary judging value

A foundational premis of service-dominant logic

You’ll not be surprised that there is a further evolution to be done. One that nails down what value is in an actionable way and addresses price and value determination concerns. I call it value-through-progress.


We need to evolve our thinking around value again to answer the question what does value mean.

value-through-progress: a view of value creation that sees value as being increasingly created as progress is made. Though it may not be realised until progress completes

What’s the alternative then? Well, I would argue that value is not embedded it outputs/results. Rather, it emerges from making progress.

progress: moving over time to a more desirable state

How it works

Let’s say you want to achieve something – hanging up a picture, moving location, learning a language, etc. These are some aspects of progress that you want to make; which we call progress sought.

Before you start making progress no value has been created. You haven’t achieved what you wanted. When you reach your more desirable state, you’ve achieved what you wanted, and so maximum possible value has been created. If we agree with those two points, then value must have incrementally emerged as you made progress. We call this value-through-progress.

This emerged value doesn’t need to emerge linearly with time. But it does need to be recognised by the seeker for it to have any meaning – a concept similar to revenue recognition in accounting. Value recognition allows us to answer the question how valuable is it to a seeker to reach 80km of a 100km journey. The answer isit depends on their value recognition.

value-in-useA view of value creation that sees value being increasingly co-created during a progress attempt as a progress seeker engages a progress proposition. Though value may not be recognised (accounting term) until progress completes.

From this concept of progress, we discover the true definition of value.

Maximum value is achieved when the progress sought is reached. If no progress has been made, then no value has been created. Value, therefore, emerges from the act of making progress — a concept we can describe as “value-through-progress”. In this way, it is a lagging indicator of progress.

Although we need to draw a distinction between value that emerges as progress is made and value that means something for the progress seeker. That is the process of value recognition.

Progress becomes a joint endeavour when we engage a proposition. Value still emerges through progress, and still needs to be recognised by a seeker; nothing has changed. Though in the literature we tend to say it is co-created through value-in-use to emphasise this joint nature. We also may observe value co-destruction.

  • Value emerges from making progress: value-through-progress
  • Value creation and value recognition are separate judgements
  • Reaching progress sought creates maximum value for a seeker.
  • Progress helper’s judge the progress potential of their propositions (the state they believe they can help a seeker reach; we call that: progress offered)
  • Progress seeker’s judge their progress potential (the state they they believe they can reach). If too low on their own, they judge progress potential when using a specific proposition.
  • Progress made with a proposition is a joint endeavour: value-in-use and value co-creation
  • Progress seekers repeatedly judge progress reached (where they have got to by a certain point in time) and remaining progress potential (where they believe they can reach) during progress attempts
  • Progress helpers may also judge progress reached and potential before and during an attempt with a particular seeker (less so, or not at all, the closer to enabling proposition end of proposition continuum)
  • Hindering progress can lead to value co-destruction

Buckle up, understanding value is complex, but ultimately, rewarding!.

In the progress economy we see value as being incrementally created as the seeker makes progress. The individual progress-making activities are where value emerges from resources through resource integration. This is value-through-progress. And marks a different perspective on value than the traditional value-in-exchange view (which sees manufacturers embedding value and exchanging for cash at a point of sale).

Each move towards a seeker’s progress sought results in more value emerging . This is how we get from zero value at progress origin to maximum value created by progress sought.

When engaging a proposition, progress is a joint endeavour between helper and seeker. This means value is now co-created towards progress offered. For various reasons, progress offered by a progress proposition may be less than progress sought. But a seeker accepts that if they decide to engage the proposition.

We now observe value creation as value-in-use. Which is a special form of value-through-progress reflecting the joint nature of progressing and resultant value co-creation.

value-in-usea view of value creation that sees value being increasingly co-created during a progress attempt as a progress seeker engages a progress proposition. Though it may not be realised until progress completes.

What do we mean by “Though it may not be realised until progress completes” in both definitions? It’s about when value is recognised by the seeker.

An improvement: service forward logics

To address these, we need to think differently about value. That means thinking in terms of value-in-use and value co-creation from

A continued improvement: value emerges from progress

What about value in the progress economy? Well, we’ll discover that value emerges from judgements of progress (moving over time to a more desirable state). The following judgements are made, repeatedly, at various points in the progress attempt (see the engagement decision process):

  • How much progress has been made up to this moment in time?
  • How much more progress can be made from this moment in time?
  • Are the six progress hurdles sufficiently low enough to continue?

And what we call value emerges from those judgements. Have i made enough progress compared to my expectations? If it worth me continuing? Is the other party hindering progress? And so on. Both parties make these judgements. Though it is predominantly the seekers judgements that determine if progress attempt continues.

The implications

Value, as a measure/comparator, is no longer concrete thing. It is now a feeling. Something that is phenomenologically and uniquely determined by each seeker. And this should promotes helpers to be more relational in interactions to understand and adjust their offerings to help seekers make progress.

It also means we have to rethink the place of price and money. For example, as Kowalkowski informs us, “price becomes part of the value proposition”. We’ll leave the topic of money for another article (exploring its role as a service credit mechanism enabling indirect exchange).

Finally, thinking in tends of value emerging from judgements of progress leads us neatly to a surprisingly simple and actionable definition of innovation. Based on increasing progress made and/or reducing the six progress hurdles.

Lets explore value in more detail, starting with how we typically see value today.

Now we start to see a world where inseparability is reduced and involvement should be encourage. Which leads to a world where customisation is the norm (althougha not an absolute necessity).

This naturally leads to a view where discussing value before and after the point of sales becomes natural. And that means we remove the singular point of exchange.

Value starts being something that is created in use or in context (value-in-use). And we’re co-creating value.

But we don’t really define what value means in these service-dominant logics. To some extent we keep the word since it makes it easier to contact back with value-in-exchange and where value directly related to price. But in our value-in- use view, it is no longer enumerable based on price since we don’t have value-in-exchange. But how do we choose to use one service over another? What does it mean to say I give up with this service because it’s not creating enough value?

Which brings us to the progress economy thinking.

Value in the progress economy

What about value in the progress economy? Well, we’re all about progress:

progress: moving over time to a more desirable state

Seekers are seeking it, helpers are offering it, and when a seeker engages a helper’s progress proposition there’s a joint attempt to make it. Therefore there’s three factors related to any progress proposition:

  • How much progress could be made (progress potential)?
  • How much progress has been made (progress achieved)?
  • How low are the 6 hurdles to progress?

And the engagement decision process tells us a progress seeker and helper repeatedly judge, uniquely and phenomenologically, these. Once before engaging a proposition. And then repeatedly; most likely at the end of each activity in the series of progress making activities.

It is from those judgements that what we might call value emerges. Although we might be tempted to debate if value is the right word, let’s stick to convention.

Now we say there is value-in-use because progress is made by carrying out the series of progress-making activities. Each activity increases amount of progress (value created). And as we make progress together, we say there is value co-creation. However, either party may impede progress being made, resulting in value co-destruction.

Value co-destruction

value co-destruction…interactions between actors result in a decline in at least one of the actors’ well-being.

Plé and Cácares (2010) “Not always co-creation: introducing interactional co-destruction of value in service-dominant logic”

Lintula, Tuunanen, and Salo shows us the framework below on causes of value co-destruction (“Conceptualizing the Value Co-Destruction Process for Service Systems: Literature Review and Synthesis”).

Lintula, Tuunanen & Salo’s framework on value co-destruction.
Value co-destruction can be seen, in the progress economy, when one or other party is hampering progress being made

We reflect this in the engagement decision process.. Where we allow for the helper terminating service if they feel progress is being hampered by the seeker. For example through misuse of helper resources by the seeker.

The implications…

Not observing value in exchange has a couple of implications. First on what price means. And secondly what is money.

…on price, money, communication.

Since feelings are hard to measure, we see an increased need for interaction and communication between helper and seeker if we truly want to maximise value co-creation and minimise/reverse value co-destruction.

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Let’s progress together through discussion…