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Value Creation describes systematic approaches to design products, processes and business models that deliver measurable benefit for customers and organizations. It links strategy, prioritization and metrics to tie investments to business outcomes. The focus is on value streams, customer benefit and continuous optimization.
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Value creation is the process by which an organization produces useful value for customers, employees, owners or society.
The approach comes from business economics and strategic management, which study value creation as the outcome of economic activity. In 2011, Porter and Kramer’s Creating Shared Value broadened the view to simultaneous benefits for business and society.
Value emerges when resources produce a relevant benefit that stakeholders perceive and recognize. A value chain links activities, costs, capabilities and outcomes. Value for one group can create trade-offs with value for others.
Activities are judged by the relevant benefit they create for stakeholders.
Resources, capabilities and processes are translated into perceived benefit.
Value is assessed through outcomes, costs and affected stakeholder groups.
Value creation directs strategy and innovation towards measurable benefit rather than activity or output alone.
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