People are connected through, email, cell phones, IM, social networks and blogs. A new democracy is forming quickly. The rules of the game are changing. The power of the collective will start to influence us beyond the boundaries of Media/ICT.(web 2.0). People seek sustainability, contribution to their life and that of the community, transparancy and intrinsic product values. Contribution Marketing helps companies to transist from being focussed on growth(isolated) to being focussed on contribution(connected).

From Profit chain to Value chain

January 9, 2007 in Connected Society, Contribution Marketing, Intrinsic values, Strategy, Sustainability, Valuechain

I noticed that many companies don’t know in which business they are in. They lack meaning. Internal focussed companies. These are the”Profit Chains”. Most likely control, holding on and closed are elements which can be found back in the strategy and in the culture/people working in these companies. They have become rational companies/people. Focussed on measurable elements.

Meaning and purpose is not measurable..

To be succesful in modern business(transparant, low entry, technology) we need to decide which role(function) we have in the “Profit Chain”.

Further we need to add new dimensions to the “Profit Chains”: Value(contribution, purpose) and Openess(together, open source)

Please have a look at the presentation on Slideshare..

As usual feedback very welcome..

Contribution Marketing

Contribution Marketing is the activity of focusing on creating intrinsic ‘product’ value with the purpose to contribute to individuals, groups and this planet. The coming years competitive advantage is created purely by right brain activities: creativity, intuition, communication and a holistic view of the world. This blog is about releasing the strength of the right side brain within businesses. It shows ways to create new value in an emotional driven world. This blog has the ambition to support companies to reach their true potential.

Companies applying Contribution Marketing see themselves as a part of society(instead of isolated closed entities) with a clear definition of their role on how to contribute to this society. These companies are not primarily focussed on growth, more profit or marketshare increase. These companies are focussed on creating TRUE(e.g. not aspirational) value to a group and extract sufficient value to be able to keep facilitating their selected group of people.

“Self Actualization is the intrinsic growth of what is already in the organism, or more accurately, of what the organism is.”
Maslow

A COMPANY AT BEST CAN BE ITSELF

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January 11, 2007 at 3:25 pm

Neok

Hi,

Interesting presentation. Seems this is build on the Business Development 2.0 concept that was discussed a while ago on the A VC blog.
See: http://avc.blogs.com/a_vc/2006/08/business_develo.html
Also on the blog from Flikcr’s Caterina:
http://www.caterina.net/archive/000996.html
(I see AVC is on your favourite blogs as well)

I agree on the concept of traditional value chain having become profit chains. Survival of existing ‘traditional’ companies will depend on the way they innovate around their ‘core profit chain’. Opening up is indeed one of the key challenges. As always there will be many newcomers to the industry that don’t have to tackle their legacy business practices and can design and build radically new business models from scratch.

For the more traditional companies I believe that risk-taking (decision making) and strong leadership are crucial elements to survival and renewed success.

January 11, 2007 at 3:42 pm

thinkmobile

@Neok

Thanks for your post!

I realize that what I am saying is not rocket science. It is a very relevant topic, discussed by many in different words and ways. I always try to boil it down to the core. Make it easy to understand. Visualize if possible.

I found out that it also shows similarities with work of C.K. Prahalad: http://en.wikipedia.org/wiki/Core_competency

About risktaking See the Manifesto of Jaffe:
http://www.jaffejuice.com/2007/01/the_manifesto_f.html

Looks like we are on the right path..

January 15, 2007 at 1:42 pm

Rutger van Waveren

Normann and Ramirez wrote a piece in the HBR in ‘93 in which they coined the term ‘Value constellation’. It’s an interesting concept.

From the summary:
“…strategy is no longer a matter of positioning a fixed set of activities along that old industrial model, the value chain. Successful companies increasingly do not just add value, they reinvent it. The key strategic task is to reconfigure roles and relationships among a constellation of actors–suppliers, partners, customers–in order to mobilize the creation of value by new combinations of players.”

[From Value Chain to Value Constellation: Designing Interactive Strategy]

January 15, 2007 at 3:22 pm

thinkmobile

@Rutger

Thanks for your info. Reminds me of the Blue Ocean Strategy from W. Chan Kim and Renée Mauborgne

From Profit chain to Value chain

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From Profit chain to Value chain

Contribution Marketing

Lifestream (Jaiku)

My other blog

Webpages worth saving

My photos

Recent Readers

Blogroll

Category Cloud

Archives

Meta

4 comments