Work Value ranges from the unique creative non fungible Tokensets to mechanical fungible Currentsets.
Work Value is nonlinear and irreversible reducing local entropy within its ecosystem while increasing global entropy.
Syntropic Work Value is also nonlinear and irreversible reducing local entropy within its ecosystem but instead increases open-system “transglobal space entropy”.
Released Currents are exchanged for stored value. Work produces artifacts or actions that are keyed for human purposes.
Work Value Creation
Work currents begin with value creation delivered in an efficient enough way to generate synergies and margins.
We review Work Value as a fundamental concept to understand.
We review how it is created
Evolution of value creation into the future
How do we measure and manage value
How is Work Value is Created
Value is created through work, as intentional action-result. This work could be mechanical such as building a structure or creative like creating a plan.
We want to reduce or eliminate work that is not value-creating. We achieve this by tokenizing results
Matter, energy, and/or information has work value if these are met:
Value-creating economic transformations are nonlinear or are “time creative”. They create transformations and transactions that locally (within system) reduce entropy locally, while increasing entropy globally.
In Syntropic Work Value the global absorbs the entropy and move it to a more generalized scale. Value generating transformations and transactions produce things or actions and results fit for human purposes.
Work Value is an irreversible process with revealed usefulness to other humans.
We have an unlimited spectrum of activity that can be value-producing and can generate Currents for circulation as stored value.
A Scale of Value
With this enormous set of possible ways to create work value, how do we decide which to pursue? Is each way of creating value as useful to us as another?
All systems must create value. Some types of value and methods of value creation are more useful than others.
NOTES ON VALUE AND SUCCESS
The Evolution of Value Creation
Historic Value Creation
This infographic from Funders and Founders summarizes the long history of a wide variety of human attempts at value creation. It is a quick way to get a sense of the evolution of the economy up until today. To see the full story, go to the site here.
Of course, there were lots of parallel types of value creation throughout history, these are just examples dominant in each era. Given where we’ve come from… where are we going next?
What Value Creation looks like in the Future
As we look at the changes in the way our economy has created value in the past 100 years, we’ve shifted from a focus on huge mechanical production during the industrial revolution to more creative and customized production through the information age. Software and related services dominate more and more of value creation.
The value of products and services today is based more and more on creativity — the innovative ways that they take advantage of new materials, technologies, and processes. Value creation in the past was a function of economies of industrial scale: mass production and the high efficiency of repeatable tasks. Value creation in the future will be based on economies of creativity: mass customization and the high value of bringing a new product or service improvement to market; the ability to find a solution to a vexing customer problem; or, the way a new product or service is sold and delivered.
Through Wholo’Teams we learn how to understand how to manage creativity as well as we do managing effort today.
Productivity means we’ve wrung cost out of our operations. Creativity means we created more value: we sold X units of something that didn’t exist before; we increased the sales of Y not because we made it cheaper, but because we made it better or we increased our value to customers by servicing needs we hadn’t serviced before.
Our economy is becoming more fluid, more individualistic, we need to open up our views on value and allow for the creative work to take it’s place with other more mechanical forms of value creation.
How Value Creation is measured
So with value created in various ways — how can it be uniformly measured? Is it possible to create comparisons between value created in a variety of ways through different processes?
Value Creation as Revenue
The most direct way to measure value creation is through Revenue. This measure ensures that the process of value undertaken wasn’t worthless, if someone is willing to pay for it.
Revenue is the measure of value creation — not profit. A company can create value without creating a profit, and many do. But they don’t do it for long.
Even very big businesses can be bad businesses. For example, the US airline companies serve millions of customers and create hundreds of billions of dollars or value each year.
Compare them to Google, which creates less value, but captures far more. Google brought in $50 Billion in 2012 (versus $195 Billion Revenue for the airlines).
Revenue is not the perfect measure of value creation — only the simplest.
Revenue is a floor for value creation.
The total value created cannot be LESS than the revenue it generated. Here’s why…
If something is purchased, the customer perceives a consumer surplus >0, or they wouldn’t make the exchange. So the total value created is the price paid, AND the perceived value of the consumer surplus. In graphic form:
Here are the formal definitions:
Perceived Use Value is subjective, it is defined by customers, based on their perceptions of the usefulness of the product on offer. Total monetary value is the amount the customer is prepared to pay for the product. This relates back to the Wolomid.
Perceived Use Value is determined individually by each of us, and is subject to change at any time. Another measure of value is the exchange value:
Exchange Value is realized when the product is sold. It is the amount paid by the buyer to the producer for the perceived use value.
Revenue is a sufficient proxy for quickly evaluating value creation, but it isn’t a complete measure.