Price Versus Value

Fantastic Value

I’m a member of The Tate, a wonderful British art institute. To visit one of the many special exhibitions The Tate stages typically costs around £15. I happily pay £90 for my annual membership and in return I can visit any of the four Tate galleries in the UK with a friend, as often as I like. There’s also a member’s room at Tate Modern which is a great place to sit and enjoy a view of London, have meetings and get a bit of work done. Fantastic value!

Our recent family holiday included a trip to The Tate St Ives, and The Barbara Hepworth sculpture garden. Prior to our visit we felt more keen to see the gallery than the garden, but having visited both, the garden proved to be the real knockout for all of us (our collective artwork ‘Swimming In The Sea’ which we made at Tate St Ives notwithstanding).

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Earlier in the year I passed by Tate Britain and on the spur of the moment, popped in to see a fantastic exhibition of Kurt Schwitters’ work. I’d not heard of Schwitters but the exhibition was one of the best I’ve seen in a long time and it made a strong impression on me.

I revisited Tate Britain this week to see ‘Lowry and the Painting of Modern Life’, an exhibition of landscapes by JS Lowry. I was disappointed. I knew some of Lowry’s work before my visit but with a handful of notable exceptions, I found the works in this exhibition repetitive and pretty depressing.

Price versus Value

If I had paid £15 to see the Lowry exhibition, I would feel like I’d wasted my money. I didn’t enjoy the exhibition enough to ‘justify’ the expense. However, the value I gain from a greater initial commitment to The Tate means I happily take the good and bad as a part of the journey. Perhaps even more importantly, I would almost certainly not have paid £15 to visit the excellent Schwitters exhibition, as he was completely unknown to me.

Neil Morrison references cost and value in his 10 point change agenda for HR. Specifically he says:

We need to stop focusing on cost and start focusing on value. These two things are not the same. Even if cost reduction is on the agenda, look at the value you can get from the budget, the resources. Cheaper and faster do not equate to better. 

You’ll not be surprised to learn I think Neil is spot on about this, and yet it is harder than it first looks to shift from cost and price towards value. The ‘problem’, particularly  for businesses that have chosen to list themselves publicly on the Stock Exchange, is that their results are pored over ceaselessly by analysts and others who have a need to interpret value in purely pound/dollar/euro terms.

Another challenge is that often, the value of an interaction is not felt in the moment of exchange. Indeed it may not be felt in any meaningful way at all, but that doesn’t mean we shouldn’t try stuff out.

So what is the answer? I don’t think there is one single solution, but Tim Harford writes about the power of experimentation in his book Adapt, and I think we can all learn from this approach if we want to make work more about collaboration and cocreating value, and less about cost.

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6 thoughts on “Price Versus Value

  1. Ian Perry

    Doug, your Tate is my National Trust. I happily pay the approx £80 a year, even though we often dont actually visit a house or garden. Its something more than the cost!!

    If I may add something to the value point. I have an ops background and was doing lean before we knew it was lean! The principal behind lean thinking is value expressed by the customer, what adds value to them? Of course there are sometimes those things that have to be done which may not appear to add value (regulatory or compliance), but these of course can be challenged how they are delivered.

    The key is thinking “through the eyes of your customer”, whether internal or external. What will add value to them, and perhaps just as important what do I need or expect from them to deliver that value.

    Hope that adds some value?

    Reply
    1. Doug Shaw Post author

      Thank you Ian – this is really helpful. I have an unwritten manifesto, part of which says that if it isn’t right for the client, then it isn’t right. I prefer the way you’ve articulated the point here, so yes – value added indeed!

      Have a super day – Doug

      Reply
  2. Simon Jones

    This is where “orthodox” economics gets it so wrong. While it does appear superficially logical that a thing – a diamond say – has no intrinsic value but its value is merely the price someone is prepared to pay for it, it takes no account of human behaviour or needs.

    Reply
    1. Doug Shaw Post author

      Cool – orthodox economics – thanks for that Simon, taking us nicely up a gear. Like the way you’ve added further value to the discussion, cheers.

      Reply
  3. Andrew Jacobs

    Interesting post Doug.

    As you know we’re working to a nil/neutral cost model with our L&D function. One of the issues we’ve found is the simple perception – if you have no costs, you have no value. People EXPECT to have to pay for some services and to have it made available for nil infers a lower value to the piece.

    From a HR perspective, there’s a need to understand how the organisation measures value; indeed, does it even ‘value’ value? Classic economists will consider exchange value (as Simon suggests a price for a good/service), labour value (the effort to produce it), and use value (how useful is it to the receiver). I wonder how often we consider labour value first?

    There’s a further discussion about the value of the HR intervention outside of these classic terms; Can the HR intervention be described in economic, social, AND environmental terms? Do we consider these 3 outcomes within our evaluation? More importantly, can the intervention be measured culturally?

    Thanks again for an interesting blog post.

    Reply
    1. Doug Shaw Post author

      Hi Andrew – thanks for your contribution to the discussion, and I’m sure that our previous conversation and twitter exchanges have, like many other things, helped to percolate this blog post to the surface.

      I confess to remaining unsure what a nil/neutral cost model is. I may be wrong, I often am, and I’m guessing that the people employed by your organisation as the L&D function are remunerated in some way? If that is the case, then does that remuneration get folded into the model somehow? I have no wish to pry – but like you say, there is an expectation that some stuff has to be paid for.

      Indeed until we can more broadly accept ways of creating value that may always be the case – perhaps we need to persuade financial institutions to accept other currencies than cash? I have a garden with plenty of fruit and veg ripening just now – if only I could trade any surplus from the garden with my mortgage company in a meaningful way, that action then frees me up to be more creative with more of my time and experience. In a way it links to your interesting suggestion about connecting economic, social and environmental outcomes.

      I’ll be exploring value in a bit more detail at Learning Live and I know you will too – it is an interesting pathway.

      Cheers – Doug

      Reply

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