Alongside the concept of positive innovation is the concept of value conflict, where there are two often competing elements to drive positive innovation, a market facing element, and an organization (process) facing operating element.
- VALUE CONFLICT – Competition between two elements of positive innovation centered on the balance between market facing and organization facing.
A challenge in the social sciences is the concept of relativism, which is a concept that there is no final, objective truth, only truth relative to an individual’s perspective with an eye on cognitive and cultural influencers. The TSoT perspective is that this concept is addressed within value conflict, and has the base assumption that:
“Smart well intending people with the same goals and same information will generally reach the same conclusions.”
Therefore, when confronted with a contradiction based upon a value conflict the assumption is that either people do not have the same goals, or they do not have the same information. This realization can be critical and key to resolving value conflict.
Market facing value focuses on the external value of material; organization value focus is on the new or improved ways of creating material. One possible perspective of many is that market value occurs in the demand chain and operating value occur in the supply chain. To align market and operations value, a concept within TSoT is the concept of the value chain, which conceptually combines the demand chain and the supply chain into a single continuum.
You could equally say that market value relates to revenues and operating value relates to costs, although as we will explore there are additional factors and concepts to both. If you accept this premise, the classic value conflict example is the question: “Should we charge more or make it for less?”
Depending on your organization your perspective could be different than these and/or you could draw other similarities; the point here is to be aware of both components to value, meaning the material value of a team’s output compared to the cost to produce that output.
In all these cases, improving value is focused on positive innovation and organizing for measurable improvements, which is why a core focus is on developing a systemic means of identifying positive innovation in addition to rudimentary solutions, along with some material determination that innovation will lead to actual value.