Three primary forms of Economic Value
Financial Value (the money you make) and Intellectual Value (the process in which you make it) are absolutely critical to the advancement of our economy. They have been critical over the past two generations, however we as human beings evolve and desire more in life, personally, and professionally. The impact of those first two forms of value in a bubble can help the economy or they can hurt it over the long term if the impact on people is not at the core of business decisions. Relational Value is the newest form of value that essentially aligns your people, customers, clients, employees, and team members together as one - which creates the greatest level of impact.
Financial Value = 1.0
The value created from output of our companies. It is transactional in nature. The more that can be produced, the more money that can be made. It is the monetary aspect made from the product or service sold. Financial Value is measured by output, characterized as transactional and creates a win/lose mindset. Purely financial value-oriented businesses are being commoditized in today’s economy and will be hard-pressed to remain in existence given the breadth of differentiation in today’s marketplace. Monetary gain is the primary driver behind Financial Value.
Intellectual Value = 2.0
The efficiency, effectiveness, and productivity aspect of the output. It is process-based. Enhanced improvements to output create more Financial Value and therefore, in theory, the more intellectual value utilized, the more financial value can be created. Intellectual Value is based on the data points being a primary driver for decisions. Essentially the smartest person in the room wins. The use of metrics, financial ratios, and data points are examples of indicators that companies use to make their strategic decisions - even if it is at the expense of their people.
Relational Value = 3.0
Is about meaningful output. It is solution based, problem solving, and personalized to the end user, employee, client, or customer. Relational Value is rooted in the collaboration and connectivity between employees, customers, clients, and the product or service provided. It is the personal development and care for all team members. It is the experience and effort put into delivering an exceptional service or product to the end consumer. Relational Value inside and outside of the company is based on how connected one is to the brand, and the promise of the brand.
What are the benefits of offering all three forms of Economic Value?
2.0 Level of Impact (offering two forms of value):
If a company provides Financial Value & Intellectual Value, but doesn’t provide Relational Value, they may seem “self-Interested” because they are not investing in their people or customers.
If a Company Provides Intellectual Value & Relational Value but doesn’t provide Financial Value, their business may become “unsustainable” due to lack of cash flow. Their customers may leave for a competitor if they don’t provide financial value.
If a company provides Relational Value & Financial Value but doesn’t provide Intellectual Value, the company may be “inefficient” in their operations and therefore cause frustration internally and with their customers.
3.0 Level of Impact (offering all three forms of value)!
When a company provides Financial Value, Intellectual Value, and Relational Value they become an “IMPACTFUL Company” because they are caring for and creating more economic value for all stakeholders.