To date, a lot of the focus in practice (and theory) has been on identifying the key capitals that drive this value creation. But the question about how value and the capitals change over time, and how the capitals interact with each other has been too advanced for most practitioners.
I’ve been lucky to witness the development of a platform that endeavors to help business people map and model value creation in a dynamic way. It’s called VDMBee.
A few months ago, they approached me about including the open license Value Creation Worksheet tool that I developed into their platform. It’s there now along with a number of other tools such as Alex Osterwalder’s Business Model Canvas. I can’t wait to dig in and test it out and hope to find a good test case (contact me if you’re interested).
A little bit of background: The connection between my intangible capital work and VDMBee goes back to shared ideas and work with Verna Allee. I can actually remember the airplane trip when I opened Verna’s 2002 book The Future of Knowledge. In it, Verna laid out powerful ideas about flows of value in networks. Her work and that of many others led to the formation of the Value Delivery Modelling Language™ (VDML™) managed by Object Management Group® (OMG®), an international, open membership, not-for-profit technology standards consortium. As explained in the standard:
VDML is designed to address several critical business challenges: 1) It creates a robust way to model both tangible and intangible value flows; 2) It provides the capacity to model complex collaborations and business networks; 3) It provides a flexible way to model business activities to more readily support continuous transformation in environments of high variability; and 4) It supports more effective shared capabilities optimization and deployment. Table 1.1 highlights these challenges and VDML solutions
The VDMBee platform is the first software implementation using VDML. It’s a forward-looking tool to model how value gets created. But once in use, I can see how it will inform measurement of success against a plan.
Here’s how the integrated reporting community could use the platform:
- Identify the core capitals of the company (using the Value Creation Worksheet)
- Model how the capitals combine to create value over time
- Measure the value flows
- Create different cases to test how changes in one part of the system might affect others
- Compare projected versus actual performance
I’ve used earlier versions of the Value Network approach. It is an extremely robust way of modelling value. I think that we will all learn a lot from using tools like this.