Everyone in business talks about "creating value" in various contexts, but what the hell does that mean? Well, there are two kinds, and you're either creating it directly or not, and with others or not. It can be complicated, but ultimately we can focus on ourselves and understand it all just fine.
The Two Kinds
I've told my kids this concept in a few different ways. Essentially, our role in this life is to be a worthwhile member of society. To do that, we have to give something to society so it gets some return on its investment in us. This could be thought of as the family, the tribe, civilization, it doesn't matter. No man is an island, nobody gets to escape the need to solidify their membership in the tapestry of life. You can do this two ways. You want to do it both ways, but you must do it at least one way.
First, is intrinsic value. This is the set of things we do that make people want us around, or to be around us. "He's such a good listener" or "she makes me want to be better" or "those two really inspire me." It's not just being a good friend, but it is typically something you would expect from social relationships and not necessarily a business. When we pay for it, it's often entertainment, or advice, or things like that. It's not something you need to survive, and it's not something everyone will want. Everyone wants air conditioning when it's hot. Not everyone wants to hear you sing.
The other kind of value is useful value. I don't mean to say intrinsic value isn't useful, but the distinction is that intrinsic value is tied to the relationship, and without that relationship it isn't useful. Humans are bad at doing things without relationships, and that's why this whole "what is value" thing confuses people. I have a relationship with several cashiers at my local grocery store. I know their names, much about their lives, I ask about their kids, etc. That's intrinsic value. The products I buy there are useful value, and when I go somewhere that I don't know anyone, I can still get that.
Services like cleaning or weeding, where there's a specific measurable result are also useful value. Artisan work is useful value. Art is intrinsic value. Everyone wants a well made shirt or an expertly carved wooden clock. Not everyone wants a Mona Lisa. The clock example is interesting, because you can argue with it, but the point there is that people want to tell the time, and being able to mix the artistic into that job makes you think not everyone wants an expertly carved wooden clock, but miss that the useful part is doing all the work. They want the clock, but they would also like it to be meaningful if it can be to them.
Directness of Value, Group Value
It's easy to see how a house cleaner provides value. You get it directly from the provider. You might pay a company, you might have several cleaners at once doing specialized roles to speed things up. The point is the value is created and given directly. It's also easy to see the value of a group when the value is direct. There isn't too much to think about here. An entertainer is also direct. The comedian is directly providing the value. Without the comedian, everyone else involved in things like lighting of the venue or whatever, just goes poof. The extra workers are providing value to the comedian.
Indirect value is more provocative to the mind. The extra workers add indirect value to the audience of the comedian. This is why measuring value gets tricky if you want to be some sort of economist about it. I recommend not doing that. Nobody cares except the bean counters, and they should never be in charge. That's my controversial philosophy for this one, don't try to control the equation. Just know there's indirect value, and let group A providing the direct value decide if they want group B's direct value to group A added to the direct value group A provides to the audience. Don't worry about reaching through the parties to make a case of the indirect value any given role provides. There's a tie in to (API contracts)["/tnl-blog/api-contracts-are-everything.html"] that I could make, but I'll leave that to the reader.
Suffice to say, the value directly given is what we need to provide, and knowing how it fits into the larger ecosystem is a good motivator for us for things like meaning, but you don't want it to be the focus.
Vague Value
The funky bits are the hardest. Data analysts are a good example. What value do they provide? I can't tell you except in a specific situation. Do they? Maybe. If the house cleaner is bad at their job, you can point to specific failures. If a data analyst is bad at their job, is it them, or the data, or the questions being asked of them? Same with all kinds of software engineers. If they're bad, is it bad requirements? Product design? Marketing?
Value can be vague in intrinsic value as well, even the kinds we pay for. Is your therapist bad, or do you just suck at taking their advice? Do you feel negatively because you have no control over your attitude, or because someone is actively trying to make you feel negatively? If you feel good, is that your therapist, or you? Did they help at all? Maybe!
The vagueness of value is often the best kind of value. Humans hate ambiguity, but also want it more than anything else. We die without the bits for our minds to chew on, the conflicts that make us grow. For some that becomes an addiction to drama, which I have less than charitable views on, but it's still very human and common. For others, it might be more of an exploration of the truth, like a scientist. There's many ways to slice it, but it is the basis of most of our lives. Even the useful, direct, measurable value of a house cleaner has some variance. You keep missing the dust on that shelf. It doesn't look dusty except at this specific angle that I'm in a couple times a day but nobody else even sees. That's some vagueness creeping in.
What Do We Do?
The goal is to provide value some way to some audience. Some of that has to get paid for. Most of it, hopefully. It might not be with money, and it may just be with gratitude, but unpaid for value is very bad. The trick for us all is to find what kinds of value we can provide in both useful and intrinsic ways, preferably combined like that wonderful wooden clock. Start with who your audience is. They're the ones paying. Make sure it's a good audience. An audience that will cut off a contract unexpectedly is a bad audience. An audience that doesn't pay is a bad audience. Let the "favors" people rot. Their annoyance at you for not doing them a favor is the tantrum of a child and can be similarly ignored. Ignore everything about them if you can, in fact.
Always be expanding your audience, or audiences in many cases. Note that I'm not saying customers. Customers is a specific kind of transaction, and that's not the point. Your place in society isn't about customers, it's about value. You need an audience to create value for. Nothing more, nothing less. If you can survive and find happiness providing the value to your audience, you're completing your life's tasks. If you can do that as part of a group, you're doing even better. Comedians are solo entertainers, but they are colleagues with each other and share the craft and hold each other accountable when they take from the craft more than they give, like stealing jokes might be seen as.
Now you don't have an excuse in not knowing what value is. Create value for your audience.