This is the third post in a thread on finding a starting point for strategic thinking. So far we have seen how this is an iterative process (not one and done), and that we start with a question how will we add value.
We have inherited a dangerous idea. That idea is that added value is the same as moral imperative. One example of this is the protestant work ethic. Hard work is rewarded.
Morality is, of course, of primary importance in structuring our social relationships. If we are amoral or immoral, we lose trust. One has strong incentive to at least appear to have some moral basis for one’s activities. Lack of moral foundation also affects the self. When we violate a code of conduct, we cannot help but lose self worth. We might find ways to compensate or re-gain it back, but that does not negate the initial effect.
At the same time, morality does not necessarily add value over time. For example, I would argue that there was nothing morally superior about using oil instead of coal as a source of energy. Nor would I argue that driving cars is morally superior to riding horses. Nor would I argue that using computers is morally superior to using pen and pencil. While none of these switches improved our moral character, they all have added value to society.
So let’s think for a second, why is morality not the best indicator of how to add value in human relations?
The answer is simple. Morality is about ex post analysis. We cannot say an act is immoral without a prior moral standard-. If after the standard is set, and one violates it. the conclusion is clear. But I should not punish myself for violating a standard that did not exist at the time I acted.Nor should society. And Indeed, this is a classic legal principle.
Value added, however, is not about ex post thinking at all. To the contrary, it is about how we can be made better in the future regardless of past standards. It is an “ex ante” process. So we think a Ferrari is highly valuable, but it is less so if we are in the desert with it and without fuel or water. A painting may be priced at an absurdly high figure, but it loses value if it cannot be re-sold. A degree in law or medicine is valuable to the extent that we use it.
Here is the weird thing. We are routinely taught that we can solve the ex ante problem of adding value in life using ex post standards. Ooops! It doesn’t work that way. Judging our activities based on ex post standards may help us become better people, but not necessarily add value.
So how do we start thinking about ex ante value creation? good quesiotn. That is next.