Archive for the ‘Business & Management’ category

Creating Value the Number 1 Purpose of a Company (181 of the Largest US Companies)

August 23, 2019

For the last few years Gautam Mahajan has been leading a campaign that the role of a company and an executive is to create value for customers, employees, partners, society and investors on a long-term basis.

It is gratifying that on 19th August, 2019, 181 CEO members of Business Roundtable, including Amazon’s Jeff Bezos; American Airlines’ Doug Parker; Apple’s Tim Cook, Bank of America’s Brian Moynihan; Coca-Cola’s James Quincey; Eaton’s Craig Arnold; Marriott’s Arne Sorenson; Lockheed Martin’s Marillyn Hewson; Morgan Stanley’s James Gorman; Procter & Gamble’s David Taylor; UPS’s David Abney; and Walmart’s Doug McMillon re-wrote the purpose of a company after

On top was Delivering Value for Customers and to all stakeholders.

Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or ­exceeding customer expectations.

Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity, and respect.

Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.

Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.

Generating long-term value for shareholders. [They] provide the capital that allows companies to invest, grow, and innovate. We are ­committed to trans­parency and effective engagement with shareholders.

Each of our stake­holders is essential. W­e commit to deliver value to all of them, for the future success of our companies, our communities, and our country.

We have built up a large membership of people from around the world, who believe this to be true. This includes Philip Kotler, Russ Klein, CEO of American Marketing Association, Jag Sheth of Emory, Christian Gronroos of Hanken, Finland, VKumar, Editor of Journal of Marketing, Tanya Dubash, Godrej, R. Mukundan, Tatas, Harry Oosterhuis of Ing Bank etc.

The new purpose of a company that the Business Roundtable members have signed. States delivery of value as the number one purpose of a corporation.

The definition of Value (by our value community) is:

Value Creation Definition: Value Creation  is executing pro-active, conscious, inspired or imaginative and even normal actions that increase the overall good and well-being, and the worth of ideas, goods, services, people or institutions including society, and all stakeholders (like employees, customers, partners, shareholders and society), and value waiting to happen.

That is why our parents teach us to be good kids and to do well. But this is soon overtaken by the goal of making a living, of being successful.

This gives us an opportunity to give CEOs a road map on how they can get their companies to move forward and transforming their companies for Customer Value. This is exactly what Philip Crosby was able to sell, when the quality movement started.

How can we get some CEOs together or individually and discuss Customer Value, Value Creation, Customer Strategy, Measuring Customer Value (no one else does, except Mahajan and his associates), Customer Centric Circles, Employee Value, Societal Value and the futuristic Value Waiting to Happen and getting the entire company to pitch in (Total Customer Value Management, also title of one of Mahajan’s books).

Gautam Mahajan is the world leaders on Customer Value and Value Creation. He is Founder Editor of the Journal of Creating Value,, now finishing 5 years, and the Mentor of the Creating Value Alliance,, and Chair or co-chair the Global Conferences on Creating Value, the next being in Paris in June 2020, and The International Conference on Creating Value for the Future of AI and Society at Kobe Japan in October, 2019, and a conference in Boston at Northeastern on How businesses create or destroy value for society.

A Creating Value Centre for Business and Society will be inaugurated in Denmark in January 2020. University of Kobe is starting a Value School to be inaugurated in April 2020.

No one else is doing so much for the Value Creation movement as Mahajan and his colleagues. A list of his books is in the signature line.

Do join the Creating Value Alliance,


Narender Kumar,
Customer Value Foundation

Mr. Mahajan is
Founder Editor, Journal of Creating Value
New Delhi 110065 +91 98100 60368
Twitter @ValueCreationJ Blogs:

Author of Value CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant Logic
Come to the ​Second​ Global Conference on Creating Value, May ​2019 ​ in New York
Join the Creating Value Alliance at


The International Conference on Creating Value for the Future of AI and Society

July 4, 2019

The International Conference on Creating Value for the Future of AI and Society whose flyer is down below. More information can be got from CREATINGVALUE.CO

Flyer 1 pageICCV for AI


Conference was held in New York in May 2019 and was a huge success. Many senior academics and business CEOs said this was the best conference they ever attended. Fordham University newsletter said:

“The Marketing Area organized and hosted the Second Global Conference on Creating Value at Lincoln Center on May 14-15. The conference co-chaired by Sertan Kabadayi and Gautam Mahajan, the President of Customer Value Foundation, had 158 participants from 18 countries. There were 16 Plenary Speakers including 3 Distinguished Professors like Christian Gronroos, Raj Sisodia, Philip Kotler, 8 CEOs, one of which was Russ Klein, the CEO of the American Marketing Association(AMA), and 48 Academic Paper Presentations. The keynote speaker of the conference was Philip Kotler” (pictured here)

Philp Cotler Keynote speaker


Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India
Founder Editor, Journal of Creating Value
New Delhi 110065 +91 98100 60368
Twitter @ValueCreationJ Blogs:
Author of Value CreationTotal Customer Value ManagementCustomer Value InvestmentHow Creating Customer Value Makes you a Great ExecutiveThe Value ImperativeValue Dominant Logic
Come to the ​Second​ Global Conference on Creating Value, May ​2019 ​ in New York
Join the Creating Value Alliance at

Call for Paper : Value Creation and Destruction by Technology on Society

May 2, 2019

International Conference on Value Creation and Destruction by Technology and AI for/on Society in Kobe, Japan; October 15-17, 2019

What is the future of technology? Will it create or destroy value for society?

Technology and AI are being embraced like the Holy Grail. Every manager is gravitating towards it. You ask why, and people will say:

It will make us more proficient; give us more leisure time,
It will replace inefficient, highly paid workers,
It will increase profits,
We will be able to serve our customers and employees better,
It will help us become healthier.
It will allow us to do much more with less.
The list is much bigger and growing.

Customer Value Foundation is co-hosting The International Conference on Creating Value for the Future of AI and Society in Kobe, Japan on October 15-17, 2019 along with the University of Kobe and japan Advanced Institute of Science and Technology. Speakers from the US and Japan, NEC, Fujitsu, IBM, Data & Society Research Institute will speak. We will discuss the issues of value creation and destruction by technology and the future. What should society be doing to gain the best advantage from technology and avoid potential dangers? Some items include

Mass customisation: Everything will become customised, whether you are a student or a customer. As a student for a particular course you will be taught differently than your fellow students. Will there be a knowledge pill or knowledge beaming? Will customers be given the experience they seek? Will they become used to the experience and will not be able to think of other experiences? Will people be cloned to fit a mould (mass customisation)?

Financial repercussions, financial areas such as banks and currency, and trading: What happens to buying power when robots cause job loss? And to change how we trade?

If we are to remain in control, we must redefine who and what we are as human beings. Are we defined by what we do and how much we earn? (As is largely the case today). Or will technology in fact push us to begin exploring the deeper underlying questions of what it means to be human? What it means to lead a “good” life? What it means to actively contribute to creating value for society and the planet as a whole?

Financial Services: What happens to banks, money dispensing, cash, bit coins, the medium of exchange, and the issue of trust?

On the other hand, digital addresses give an identity to homeless people. Credit ratings can now be done for the bottom of the pyramid people through their mobile interaction analysis, to see if they fit the mode to give a loan to.

Manufacturing, jobs and people, labour, leisure time

Jobs and Manufacturing: Great advances in productivity and cost reduction is seen.

We see a short term reduction in costs when robots replace humans. Less complaining, less downtime and coffee breaks. However, we soon find people who are without jobs and unable to buy, reducing sales.

As robotisation happens, more and more leisure time will be available, spawning new industries for using leisure time and entertainment. Labour customisation will happen. Choices will be limited by people who define what you should be.

As jobs are lost, our economic thinking might change. Human beings will have to redefine ‘worth’ and humanness when they cannot earn. Will such changes force us to re-think what it means to be a human?

The brain’s ability to analyse problems reduces due to under usage, when analytical tools available start doing the brain’s work. This even happens with convenience tools. When we cannot find someone’s email address, we often stop instead of sending a snail mail or a courier to the land address, or even make a phone call. The brain will need more exercise as technology takes over the brain’s functions.

Society, its regulation and control, its readiness to absorb technology and reaction to technology are all issues to be tackled. Aging and managing humans will be impacted by technology.

Customers, their wellbeing, their buying and selling, retail etc. will change and the control will pass on to machines. Will there be a world of exchange with new technology?

Value recuperation by better collaboration of technology and society is another important factor. This is one of the most important positive aspects of technology. It enables, even empowers human beings to be more with less.

Transport and Travel: Teleporting, drones, individual travel pods, less waiting, faster movement. What do we do with our extra time? What happens to our concept of enjoying transport and travel, if we can see and experience everything with VR?

Healthcare: The future will bring in more testing of humans as medical science advances. Testing for microbe distribution in the intestines, to cancer screening, to genetic defects and so on will become possible. Eventually, nanobots will put energy into the body, and food will become passé, making us intestine and stomach free. Oxygen will go into our cells through nanobots, making the heart redundant. We will be a skeleton supported by muscles.

Privacy: We are all facing this issue, and are now afraid to use Alexa, or give information, and are shocked when our private information is gathered by Google et al, like our trip pictures, itineraries, etc. and worse still shared with others. Technology incursion into our homes and daily chores is an issue.

Stores know all about us, and can try to manipulate us.

Our privacy can be saved by ‘Safe Pod’ (by Berners Lee, founder of the internet) or the HAT project discussed by Irene Ng at the 1st Global Conference on Creating Value.

Quality of Human Interaction: Texting and chats are replacing face to face meetings. The number of your Facebook friends is no sign of true friends you have. Industrialization, urbanization and mass media have undermined the communal basis of society. More and more personalization is seen and this is as an evil because it makes consumption nuclear, recognizes and values the individuality in each of us. Technology (Big Data, algorithm) leverages individuality at the detriment of collectivity, says Pierre Nicholas Schwab. How do we change this before technology redefines our humanness? Technology also leads to loss of control for each of us. Will this mean individuality will be accompanied by mass cloning ideas?

The net is making us disconnected and single and lonely, just as it makes us more connected!

Unintended and unforeseen consequences: such as killer and evil robots. Or the monkey with the human brain put in by Chinese scientists? Or cloning?

Humans do not have to take responsibility for their actions: Systems that can use machine learning to predict and help solve problems can also be used to purposely control and act in ways that will make people redundant. The danger happens when machine intelligence exceeds our ability to understand it, or it becomes superior intelligence, we should take care to not blindly follow its recommendation and absolve ourselves of all responsibility, says Chris Kirby,

We cannot forget cyber-attacks, weapons of mass destruction (such as star war weapons) with new technology. We also have to be wary of technology poacher’s intent on making money for themselves or destroying value for others.

There are many more subjects. The reader can imagine the wider canvas and how we and society can move forward in tandem with technology.

Technology has so many positive ramifications for the future of humankind, from health to travel, to time management to convenience. There is much constructive power of technology, too.

Technology can be very helpful and positive for us and at the same time, a weapon of destruction. For a more balanced view of technology, watch two TED talks: Kevin Kelly ‘How AI can bring on a second Industrial Revolution’ and Kai-Fu Lee ‘How AI can save our humanity’.

We need to regulate technology. Who should do so? Governments, People or Corporate and technology leaders. This has to happen in a slow analog situation to avoid the knee jerk quick (what Kahnemann calls the instinctual portion of the brain) reaction, to prevent those only exposed to the digital world (the youngest people) to think only technology, to prevent Governments and corporates to look only at their interests. This is a tall order but must be done. What is the meaning of ethics in an evolving technological world, or should we live by our current ethics?

Technology regulations formed democratically are the first step. It requires listening and introspection. Perhaps we should have advanced courses on controlling AI and AI safety! Perhaps we should not become lazy with all these conveniences, and use our brains to be vigilant and be able to go to authorities overseeing the dominance of humans over technology for corrective action.

We should remember technology does not ruin our lives, we do.

Technology is NOT the source of all evils, but has to be managed to be the source of our positive future. Martijn Rademakers of University of Amsterdam said: ‘Tech’ nowadays is sometimes like a speed boat without a rudder: it moves fast forward but not necessarily into the direction we want. When it hits the reef it will be too late. We need a helmsman – i.e., thinking leadership. Let us balance the good with the potential bad, and use the good and manage the bad. This is why we are conducting The International Conference on Creating Value for the Future of AI and Society in Kobe, Japan on October 15-17, 2019.

Come join us in understanding, analysing the future and providing solutions. Speak and participate.

Key dates are:
Early Bird Registration: August 15, 2019
Regular Registration: October 1, 2019
Paper Submission: July 15, 2019

Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India
Founder Editor, Journal of Creating Value
New Delhi 110065 +91 98100 60368
Twitter @ValueCreationJ Blogs:
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic
Come to the ​Second​ Global Conference on Creating Value, May ​2019 ​ in New York
Join the Creating Value Alliance at

Value Deprivation

May 2, 2019

I have written about Value destruction and how it can be turned into a Value creating opportunity. Value destruction assumes that value was or is available to you. Elsewhere, I have written about customer frustration when customers are value starved. But a more basic issue we as humans and marketers must look at is value deprivation.

What happens when value is not available to you because of circumstances or because you have no control?

Why is this important to companies and marketers? Very often, some people are deprived of common goods available to a higher economic class of consumers. Those who are being value deprived, used mud instead of soap; charcoal instead of toothpaste; having only one change of clothes instead of a wardrobe; no recourse to quality or even minimum education; not getting two square meals a day; having to work in someone’s house and being deprived of an alternative future.

Many of these can be converted into opportunities; small bars of soap, sachet shampoo or tooth paste etc. Or products with fewer features and a lower price point. I will leave the reader to think through these.

Deprival value is based on the premise that the value of an asset is equivalent to the loss that the owner of an asset would sustain if deprived of that asset. So imagine the deprival value of a lost education.

Much of this happens because people who can do something have closed their consciousness or trained it to ignore such things. Ayn Rand in 1966 wrote in The Voice of Reason: Essays in Objectivist Thought:

Men’s consciousness is the least known and most abused vital organ….the loss of control of one’s consciousness is the most terrifying of human experiences…and yet men abuse, starve and subvert their consciousness…She says this leads to the question, Who is to blame? All those that are afraid to speak, or who know better are willing to compromise, temporise and thus to sanction such happenings?

Examples of Value Deprivation

Value Deprivation occurs when you are clearly eligible to be selected for a national team, but because of vested interests or quotas you are not selected. Yet another example is a worthy candidate who cannot get admission to a good school because of reservations. Or worse still, rich people who ‘bought’ admissions for their kids to the detriment of deserving but less connected candidates.

An orphan, deprived of parental love is the case of value deprivation

A worker being paid less than minimum wages in cash by greedy industrialists who use their black money for this purpose and simultaneously deprive the worker of social benefits apart from paying lower wages. During demonetisation in India, these industrialists sacked the workers depriving them of jobs, the economy of growth; and then blamed their actions on the government. Had they being paying by check, this would probably not have happened.

A poor guy who is unable to get recourse to justice or bureaucrats is value deprived. Do the clerks and bureaucrats notice this?

Value deprivation occurs when you live in a village in India, and have no opportunities. You reconcile yourself to this and do not want to do something or become someone. Then we in big cities wonder why these people are that way and not ambitious.

I met a villager who wanted to get out of this, and decided to send his son to Canada. They went to touts in a bigger city, who arranged admission in unknown colleges and with large payments. This is one consequence of value deprivation: making people do things out of desperation.

The worst example is the financial community who in their greed have perpetuated great value deprivation in the guise of value creation. By making people who were marginal buy homes with cheap mortgages without worrying about the buyers viability or the mortgage viability, they first deprived such people of long term value and peace of mind, and finally caused value destruction for them and society in a big way (value was destroyed for 6 million people who lost their homes and 8 million people who lost their jobs as an aftermath of the 2008 financial crisis. No financial company officer had any value deprivation from this crisis or went to jail.)

So what can we do?

The first and least is to become conscious and aware of value deprivation. Recognise it. Point this out in your circle of friends or your company.

Your innate ability may then suggest possible solutions for those you can impact, or those your circle of friends and your company can.

A focus on Value deprivation will increase value to people and society and improve the good and wellbeing of people all around.

Marketing people can look at their products that are deprived to people because of affordability, and they can come up with smaller sizes, lower featured products for such people and bring them into their fold.

This will all lead to reduction of value deprivation and increase value.


Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India
Founder Editor, Journal of Creating Value
New Delhi 110065 +91 98100 60368
Twitter @ValueCreationJ Blogs:

Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Customer Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic
Come to the ​Second​ Global Conference on Creating Value, May ​2019 ​ in New York
Join the Creating Value Alliance at

Look at Value Destruction to Create More Value

April 4, 2019


‘Every act of creation is at first an act of destruction.’ Pablo Picasso

Many companies analyse value destruction after the fact. Very few try to assess value destruction potential of a new strategy, a new product, a new technology or even a new hire, when they are looking at these. In the literature, the bulk of the papers are on analysing value destruction after the fact.

1.Problem from a diff angle

The exception is Dunn et al who discusses strategic risk to be studied up front. Furquhar suggests selective demarketing to get rid of non-attractive customers. Stokes and Mahajan discuss value creation and destruction in general terms. Were organizations and the managers within them do so, they would be able to avoid or reduce the value destruction potential and in fact create much more value. Many companies learn their lessons or become smarter from analysing value destruction that has already happened. This is the normal way companies have viewed value destruction.

In this article we are suggesting a hardly used technique: using, exploring, understanding and evaluating value destruction possibilities to create more value. What we suggest is that during and after a strategy session, or a review of a new project or a new product or service introduction, one should hold a session asking: In what way will this strategy, project or product or service destroy value for me, my company, my customer, my employees, my partners, my society etc. or what is the potential for value destruction to be there, even if the destruction is a non-optimal solution.

The aim is to carry out an in-depth analysis of possible value destruction. Understanding the causes of value destruction or possible value destruction, one would then analyse how one could avoid such value destruction and actually create more value. Looking at solutions that are generally accepted and asking how they might destroy value can help us figure out better and more value creating solutions. As an example, Sanghvi et al, 2107 suggests that just reducing value destructing waste is not enough.

An Example: Strategy

Shareholder value destruction over 10 years showed that strategic risks were a major cause of shareholder value destruction. This is because the strategic team does not look at risk and relegates this task to a risk evaluation team that does not have the ‘clout’ to change thinking. We would like to expand this value destruction thinking to beyond risk and shareholder loss, but also to other potential problems. The example of smart lighting highlights this and is discussed later.

Fabode shows how strategic digitisation (his focus is on virtual energy companies) destroyed value for GE, as virtual companies reduced demand for GE’s generating equipment.

Atasoy found that strategically designed digital goods get lower price than physical goods, and warns about digitisation.

Willigoose discusses Value Illness which prevents citizens from following the right things. Value starvation can also cause similar problems.

Liedtke states that value can be destroyed in mergers and acquisitions, even though moves are strategically thought through.

Along with pure strategic thinking, we have also to look at operational risk, compliance risk, political, operational and regulatory risk. We are suggesting that this should not be done in a cursory fashion and just stating these risks have been looked at is not good enough, but to see what the company’s leaders can do to mitigate these risks, reduce value destruction potential and increase value creation potential. Chris Dann of Price Waterhouse uses strategic risk to reduce strategic value destruction and create better value

The point is such value destruction should be foreseen and tackled in a serious manner.
One such thinking should be the impact of competitive disruptive moves. Companies should therefore embed value destruction and risk, operational and regulatory and political risk in their thinking. How could these happen? What can we do to prevent these from happening? In what way should our strategy change to reduce value destruction?

As an example, in earlier decades, we had business development people who were rewarded for bringing in new businesses. Many of them never worked on the new business they brought in, but were rewarded and moved on. I asked CEOs whether they rewarded business development executives for keeping them out of bad businesses. Most had not thought of this value destruction potential.

An Example: Smart Cities

1. Smart lighting: It is vastly understood and appreciated that smart lighting is the accepted approach for smart cities. While we agree, we also wish to examine what this means in terms of physical infrastructure:
The typical way of using smart lighting is to put poles on roads, and have lights that turn on when needed. This is all value creating.
What is potentially value destructing is:

a. Physical infrastructure is used less than 10% of the time. The cost of poles and the space required can be high. This is value destruction. So if we assume there is potential value destruction what can we do? We could think of replacing pole base lights by drones. Conceptually 50 poles could be replaced by a smaller number of drones.

The next thought is to look at using flying phones that can hover above the person walking, supplemented by fewer drones. Flying phones would belong to citizens, and therefore a smaller drain on the exchequer.

2. Physical transportation: Smart cities imply improvement of wellbeing of (or creating value for) citizens. Just giving sensor based information is not enough. Value is destroyed because people have to live sometimes far from their place of work or schools or airports (and other transport hubs). One common example is moving from point A to point B in normal times and in times when tourists arrive in large numbers. The normal ride could be 20 minutes, but in the tourist season it could take as long as 2 hours. Perhaps a system of driverless cars and networked transportation or a ropeway is the added value over just better information. For example, the use of tubular transport as suggested by Elon Musk is important.

3. People skilling: The next potential for value destruction in smart cities is that we do not have “smart” workers. Most current workers are untrained for this. This is a form of value destruction for the smart cities program and so these people should be skilled. For example drone handling skills, driverless car management skills etc. are needed. Next sensor handling, sensor troubleshooting may be needed. Therefore skilling academies are needed. Responsive urban governance should result in smarter value creation.

4. Self-healing and self-powering systems: Sensors and other devices can detect cracks or defects in concrete structures or in offices/homes.. An analysis of this will reveal that this requires intervention by humans to repair these defects. Perhaps, if we could use of bio-concrete to selfheal cracks in concrete we could create even more value. Lastly, biomaterials have a great future. These include self-healing polymer building materials, graphene and the like and buildings that can change with temperature, or self-adjusting buildings.

Further analysis may show that energy loss or where energy is not easily available, self-powering systems use could add more value, and reduce value destruction due to power loss. For example solar power generation through solar layers on windows could add value.

There are other examples we can focus on:

Value destruction due to insolvency. The Indian Government brought in the Insolvency and Bankruptcy code 2016 to make insolvency easier. An example of possible value destruction is given below:

The potential for value destruction could occur if all the claimants were allowed to decide on the future of the company. Assured claimants would want their money fast and not worry about the value destruction to the company’s net value. To avoid value destruction of this sort, strategically only those claimants who have a significant stake and risk in the well-being of the company should then be allowed to decide the fate of the company. Thus people who design the law from a value creation (or least value destruction point of view) would have designed the law differently (Datta, 2016).

Value destruction due to short-term focus: It is well-known that short-term results and its reporting is a cause for value destruction in firms. A look at the value destruction potential would point out that companies must adopt a long- term view of their business, but the focus on stock prices and investor short term gains obviates that. CFOs are encouraged to gain or manipulate numbers through accounting practices allowed under GAAP. Retail investors are more long-term investors and they are short changed by this thinking (value is destroyed for them). A proper study of value destruction would reveal that this practice has to be changed. An example is what Paul Polman of Unilever did…he told his shareholders he would only concentrate of long-term results and not short-term gains, and the result was spectacular for Unilever. Value is destroyed in yet another way by short termism; lower returns mean lower investment which hits the entire society.

Value creation and destruction of society from technology and artificial intelligence (AI): While this is the topic of a conference with University of Kobe and Japan Institute of Science and Technology in Kobe, Japan, October 14-16, 2019, it is germane to point out that technology development outpaces its absorption by society. Society is unable to adjust to technology quickly enough, causing short term value destruction. In the long run, the danger of technology overtaking and controlling society are very real. Such value destroying potential must be mitigated and reduced by strategic thinking by the owners and designers of technology, and the designers of the recipient society, and all of us, in general.

Lastly, one value destruction potential of AI systems is when they do not respond to human commands. It might be possible to install a self-destruct system to circumvent such value destruction possibilities.

Value Creation/destruction of plastic bottles: Continental Group introduced the one piece plastic bottle as a source of large packaging (1l, 2l) for beverages. When they started work on the smaller sizes (half litre or less), the can making part of the business complained of value destruction for cans because plastics could possibly take over some of the market from cans.

The corporate strategy team examined this and found some minor cannibalisation was possible, and a risk to growth rate of cans. On the other hand, they found that the company could not stop the proliferation of bottles, because this would happen due to competition. Maximum corporate value creation would come from aggressive plastic bottle introduction by the company and also looking at upsizing cans to larger sizes and sealable metal bottles.

Unfortunately, no one looked at the value destruction of the environment due to plastic waste. The risk analysis revealed that the risk would be minimal (meaning legislative and environmental) in the short-term would not act aggressively enough early on, till the problem became unavoidable. This is a classic case of value destruction.

The computer in the cockpit: The Economist and the Times of India based on the Boeing crash in Ethiopia in March 2019 talk about aeroplanes flying in autopilot and with automated systems.

Humans struggle to cope when automation fails. What this means is that strategically and operationally we are working on automating transport systems, and are training people in automation.

A study of this show there is value destruction potential. This can be reduced by thinking through:

What do pilots do when automation fails or plays up?

How do we train more manual controls in addition to the new training on computer control? Today pilots spend more time learning automated systems and less time on hands-on flying. Newer pilots who are more comfortable with automated systems cannot handle manual systems as effectively as older pilots.

What is the optimum manual-automated control? Which one should override the other and when?

The perils of the human-machine interface can then be reduced. Note that perhaps a cost-benefit analysis showed the current system is acceptable. Studying the value destruction aspect would cause better training and operating techniques to emerge.

Discussion and Conclusion

From a reading of the foregoing, and the examples shown, it becomes abundantly clear that the design and a pursuit of a new strategy, process, product, service looks predominantly at the positive value creation for the company or the people in control. Most do not pay heed to the value destruction potential, or even ignore this, or in their minds minimise its impact. Much of this impacts primarily third parties such as citizens, customers, employees (loss of jobs), and society.

However, from a corporate viewpoint, potential value destruction studies and analysis during the design process could have revealed better design, better processes, more effective service and more pervasive products. This includes risk analysis, compliance studies, operational analysis, environmental and societal thinking. This is a loss to the corporate entity. Companies can benefit themselves and their stakeholders including society from such analysis before the fact, rather than suffering after the fact or causing value loss to people and society and for the company itself.

In conclusion, this opens up the possibility of better value creating strategies. This means a different way of thinking, and a more reasoned solution. This has to be taught and embraced by practitioners. This becomes a fertile area of research for companies and academics to analyse value destruction potential to create more value. We must get away from reactive and ‘after the fact’ analysis to pro-active value creation and reducing value destruction, and learning from value destruction potential.

1. The author acknowledge that Shep Hyken gave permission to use this cartoon from his article: LOOK PAST THE OBVIOUS FOR A BETTER SOLUTION


Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India
Founder Editor, Journal of Creating Value
New Delhi 110065 +91 98100 60368
Twitter @ValueCreationJ Blogs:
Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Value Makes you a Great Executive

The International Society of Service Innovation Professionals interviews Gautam Mahajan

February 28, 2019

Gautam Mahajan is interviewed by The International Society of Service Innovation Professionals

Eighth in the ISSIP series of interviews with Tech Leaders: a conversation with Gautam Mahajan, author and thought leader in the area of Value Creation.

This month, Michele Tomic, ISSIP Editor speaks with Gautam Mahajan.

MT – As a starting point, please tell us something about how you got involved with ISSIP and your experience.

GM – Five years ago, in 2013, Jim Spohrer encouraged me to work on customer value and service and introduced me to ISSIP. He then asked me to speak at ISSIP during one of my San Francisco events. Those activities resulted in developing professional and personal relationships with ISSIP Leaders and friends including Stephen Kwan, Doug Morse, Jim Spohrer and Yassi Moghaddam. I think ISSIP is a great organisation.

MT – It seems that you’ve lived, studied, and worked in different places around the globe. Please tell us about your background and how it influenced your life’s work in Value Creation.

The 2nd Global Conference on Creating

Value, May 15-16, 2019, New York USA.

Paper Submission due March 15, 2019.


In conjunction with the Gabelli School of

Business at Fordham University, Creating

Value Alliance, Customer Value Foundation

and the Journal of Creating Value. For more

details, please see the Conference website,

For submissions, see –

Contact: Gautam Mahajan <>


GM – I worked for a Fortune 50 company in the US for 18 years and learned to create value for the Company by doing unusual things, opening markets they never expected and by inventions and innovations. It was ‘on the job training – I was not taught to be a value creator but rather learned it by practice.

Moreover, my experience made me aware that creating value was the role of all individuals, universally including in developing countries where it’s more for individuals subsistence. Everywhere people talk about value and creating value, but no one is taught what to do. Most people do not even think about creating value for themselves, and therefore for others. I felt people at the bottom of the pyramid also needed to be taught to create value.

MT – Congratulations on the publication of your new book, The Value Imperative. You have written other books so what prompted you to write this one?

GM – Value and creating value are an imperative for individuals, for companies and for other people. I wanted people to understand this and also learn how to create value. The book will help build a value creation mind-set and change thought processes.

The book shows why value creation is necessary and how to create value. Also it talks about a change in education to go beyond teaching people to be functional managers, good administrators and efficient executives to becoming value creators cutting across functional silos.

 MT – Through your companies, Interlink and the Customer Value Foundation, you have worked with different types of companies to help them with customer strategies. What is it like working across industries and what helps ensure success?

GM – Those companies that can create value for employees, customers, partners, supply and delivery chains and society are ensured longevity and long term success, versus those with a narrow view on only profit creation.

Companies have to start with a customer strategy before they build a business strategy so that their future is directed by the customer value they create. Companies with a focus on the ecosystem and its people are bound to become more successful.

MT – What types of backgrounds have you found give managers tools for success? Any suggestions for courses of study or training?

GM – Managers have to think like customers and not stop being customers in their dealings. Also they have to learn to let their front line people become value creators by forming customer circles where the front line people take responsibility for customers, and develop a service mentality.

MT – To ensure the next generations are ready to take on the challenge of Value Creation, if you could design a higher education program, what courses or focus would you incorporate?

GM – I have already mentioned using customer strategy to build business strategy. I will tell executives not to take off their customer hats when they enter the workplace and become and start to think like current company people, but to keep their customer hat on and be customer led. That is how they can give true service.

I would teach value creation at all levels and make people understand that their role is to create value, and how to become value creators to cause success for themselves and for their people and for their companies and society.

The MBA degree would be replaced by a Master of Value Creation.

I have also started global conferences on creating value. The 2nd Global Conference on Value Creation will be held in New York in May 2019 (

MT – Please tell us something about your day-to-day work – what is your average day like?

GM – I seek value creators and try to get them to grow the Creating Value Alliance ( to create more value. I spend time on the Journal of Creating Value, and in talking to people around the world to create more value, and to come to or speak at our Global Conferences. I also contribute articles to various media and speak around the world.



Narender Kumar,

Customer Value Foundation

Journal of Creating Value

New Delhi 110065 +91 9971288580

Twitter @ValueCreationJ Blogs:

Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Value Makes you a Great Executive, The Value Imperative, Value Dominant Logic

Are Firms Becoming More Human?

January 14, 2019

I am writing this article to help companies and executives to create value and prevent reduction of #CustomerValue in the future. All of you need to think about this as you plan for the future.

First one must accept that firms are really human, though they often pretend not to be. This is based on a simple thought. They are run and manned by people. This feeling within firms that they are inanimate is a major reason for the culture being non-human centric.

With digitisation and automation, there is an upheaval now. Humans are being partly replaced by robots. AI is being used to answer day to day questions via chatbots. Many mundane jobs are now being replaced by machines, and so there will be fewer humans within the companies. Thus companies will have a greater reason to pretend to be less human. This of course, reduces Customer and #EmployeeValue.

Customers, especially the younger ones are comfortable with net based interactions, including emails. Getting emails on your mobile a few years ago was a novelty. Today it is a necessity. The younger Customers are getting used to non-human companies and non-human interaction. They are comfortable with robots, and working on the net/mobile.

Some of the downside of automation and AI is loss of jobs and having to fire people. What will these jobless people do? They need to be re-trained to make them re-employable.

Those people left behind in companies that are reliant on automation and robots will need more service skills in an automated world. History has shown deep automation in industries like banking led to a crisis twenty years ago, because of job losses. Today, banks for example are making deep labor cuts in departments including customer facing people and also are letting go back end people. Those who are left have to be re-trained in new working ways and skills that are different from the past. Is this meant to add more Value? For whom? The company or the Customer? Guess who will lose?

Customers are expecting and getting used to more voice/data/net type of interaction and less face to face or direct interaction. This requires more humanness in the backend machines. Services have to be more personalised, and help the customer manage his portfolio, his home, his transportation. The demand for services will increase and that for goods will decrease as demographics change to a larger aging population.

Care giving services like caring for old people will need people, and in countries where population is decreasing this could be a problem. In companies, reduction of caring staff could lead to reduced #CustomerValue, though costs will reduce. Much better customer support will be needed with the people left after automation.

Will this reduce humanness, or reduce #CustomerValue? Well, there will have to be ‘creative destruction’ of jobs because new skills will be needed with automation of routine processes and backend work, Very well designed customer support will be required. So all of us looking of the future must pay heed to this.

A positive could be, for example, customised products including mortgage products, all being given to the customer in 10minutes with machine decision making help. This will happen because AI will get a deeper understanding of customers, and make decision making easier.

Humans will survive because there will still be a need for curiosity, creativity and communications. And for using my 6As combining awareness (and cusriosity), ability, agility, anticipation, ambidextrousness and attitude. And all this with listening empathy.

These skills do not exist and will have to be taught.. And new jobs such as “mixed reality experience designer”, “algorithm mechanic” and “universal service advisor.

And so the inhuman companies (read bosses) have decided what their people have to do and what their customers should expect. Nowhere do they talk about themselves and their humanness.

The human touch requires deep emotional understanding. Re-training will have to include soft skills along with software and digital thinking. New AI and digitisation aid humans to improve their soft skills by reminding them to be more thoughtful and empathetic in their customer interactions. Simultaneously, the training will be on improving technology skills of the people. The company’s people will have to apply their humanness with sector knowledge, technical knowhow and human skills.

A BrightEdge survey states that 60% of the marketers that were surveyed say they will be using AI or automation. 31% say this will improve customer understanding, 27 % cite productivity gains and only 8% claim higher ROI. The major prize is personalization.

Other questions are:

Will the remaining work force be more human, more caring?

Will added data collection allow better #CustomerValue to be created?

Will the bosses become more human so as to create #CustomerValue? Will companies become more human and accessible and less inanimate?

I can (and I am sure you can) give examples of companies not being helpful and showing their not so human face. Let me give you examples of the human face of companies.

I was in San Francisco and had to go to San Francisco General for emergency treatment. I had medical insurance, and the hospital billed the insurance company, who did not pay, as the policy would reimburse payments made by me. I tried to pay the hospital, but they would only bill me and give me no information on payment or give me bills the insurance company could use to re-imburse me. I found it very difficult to communicate with the hospital. Try doing this from India.

Finally, I called Tata AIG and the call center put me in touch with someone who was willing to listen to me and go beyond the rules. They said they would waive the re-imbursement rule and pay the hospital directly. They were human in understanding my predicament and created value for me.

A second example is a large group of doctors, where I went for follow up treatment. The doctor and the staff treated me, my predicament of being unwell in a foreign country and just helped me out in all kinds of different ways. They never worried about billing. They were always accessible and caring. I could call and get answers and see them without an appointment. They also gave me a care kit free of charge to help me on my journey back to India from San Francisco. Great #CustomerValue.

A great example is Air India during the floods in Mumbai a few years ago. The airport was closed for two days. Passengers with other airlines were stranded as their staff had left. Air India had its entire staff at the airport, and took care of passengers (even from other airlines), fed them and took care of them. What caring!

Would this have happened if there was no human staff or reduced human staff (replaced by robots)?


 I don’t want to leave you with questions. I want to leave you with actions:

  1. Accept you are human and your company is human
  2. Notice when the company pretends to be not human with employees, partners and customers. How can you change this?
  3. Does the company ask you to wear a not so human company cap and ask you to deal with others wearing that kind of a cap?
  4. Ask how you can make the company more human?
  5. Finally ask how you can make your systems more human. Ask how you can design your AI and non-human assets to be more human.

See the difference it will make. Your customers and your people will notice this. You will leave the not so human companies and people behind.


Gautam Mahajan,
President, Customer Value Foundation and Inter-Link India

Founder Editor, Journal of Creating Value

New Delhi 110065 +91 98100 60368

Twitter @ValueCreationJ Blogs:

Author of Value Creation, Total Customer Value Management, Customer Value Investment, How Creating Value Makes you a Great Executive