The Four Levels of Value

There was a time, primarily in the industrial era, when having the ability to provide a service was enough value to ensure a company could grow and sustain. The primary reason was because the barrier of entry to create a business was almost insurmountable for the average person. In addition, there was an extremely high amount of capital needed to ensure success. If one did not have the relationships, it was practically impossible to become an entrepreneur, much less be successful. Since the boom of the internet in the early 2000s this is no longer the case.

A New Value System

Today the barrier of entry is incredibly low in comparison to 50 years ago. You can start and run a business with as little as a laptop and wifi. The internet has also torn down the need for proximity. Now we can do business all over the world and enter new markets with the click of a button. So what does this mean for the value of service?

Long story short, simply providing a service is no longer enough. Now, high-performing organizations must strategically build a hierarchy of value to achieve sustainable success, and avoid getting trapped in a race to the bottom with competitors. This article introduces a powerful framework – the Four Levels of Value – which empowers leaders to identify the various ways their organization adds value and unlock its full potential, fostering a culture of innovation and personal growth amongst your team.

Creation » Collaboration » Competition

In the war rooms across the world, the buzzword of the hour is Innovation. One of the main reasons we have been able to win the trust of our clientele is in our ability to grant access to paradigm shifting insights. Through helping clients get an eagle-eye view of the landscape in their particular industry, leaders almost instantly know what to do. And it rarely involves them having to be concerned with what other people are doing. Just as in live, paradigm shifts (how we view something) are usually followed by habit shifts, which create new outcomes.

The Cost of Competition

Most people, even leaders, are too lazy to embrace the process of thinking (which is why they are willing to pay us). They would rather do what has already been proven (which is how Japan built its entire infrastructure). This creates red oceans, and it’s how most people go about establishing a company.

This train of thought poses the question; if two companies offer the same service, with the same offers, to the same people, then what’s the differentiator? In most cases it will be the price, which makes the service a commodity, and a race to the bottom. This is why we say “Competition creates commodities”. It is also an indicator that a leader might be concerned with the wrong things. If a leader is focused on his/her competitors they are subconsciously saying the competitor is has set the industry standard. So anytime something stops working, they will revert back to what the competitor is doing.

The Benefits of Collaboration

We believe there are far more benefit to be found in collaboration opposed to competition. Collaboration looks different depending on the season. Sometimes it looks like a merger or acquisition; other times it is brand partnership. No matter the occasion the most important element is that it is beneficial for all parties.

The primary reason we value collaboration is because it grants instant access to capital (minds and money). Capital is the primary element that makes up every organization. In fact, it is where the term “organization” finds it meaning; because leaders are able to organize minds and money.

For many, simply collaborating is far easier than creation. The reason is because collaboration allows you to glean from the branding that has already been established within an organization.

Creativity and Innovation: The Ultimate Value

Like most things that humans value, the rarer a resource is, the higher its value. As is the case when it comes to innovation and creativity. Keeping it simple, innovation starts in the form of ideas. As you may know creating ideas is fairly easy. But taking those ideas to market, creating buy-in, and generating capital behind those ideas is incredibly difficult.

It often requires far more in capital, time, and energy than we think. But when it works, the pay out is massive. Very few people have the vision, risk tolerance, and intelligence to function at this level. However, as business leaders we can train our staff and teams to embrace these trains of thought by understanding the Four Levels of Value.

Introducing the Four Levels of Value

Let's delve into each level of the value pyramid and explore how it contributes to your organization's success.

Level 1: Implementation (The Foundation)

This is the "doing" level. It encompasses the core tasks and processes that deliver your product or service. At this level, value is added by efficiently executing on established procedures. Think: Production lines, customer service interactions, data entry.

These people will provide the brunt of the physical labor in an organization, but in most cases they are paid the least. The reason is because in most cases there is little to no need to apply creativity thinking. The typical pay rate of individuals at this level is minimum wage to approximately $80K per annum.

Level 2: Management (Building on the Foundation) 

Here, the focus shifts from simply doing tasks to managing them effectively. This is the first level of leadership, at this level it is about making sure resources are allocated efficiently, processes are optimized, and quality standards are maintained. Think: Supply chain management, project management, performance reviews.

These members will not provide much physical labor, unless there is a shortage in manpower. Instead their primary function is that of an overseer, making sure the labor is carried out. Notice there is an increase in pay with the degree of creative thinking that is associated with the role. The typical pay rate of individuals at this level is between $40K and $250K per annum.

Level 3: Communication (Elevating Value)

Effective communication takes center stage here. Marketing and sales teams translate the value proposition to target audiences, ensuring understanding and generating demand. Think: Branding and marketing campaigns, social media engagement, sales presentations and public relations. This also where public figures and your favorite entertainers are found.

These members within your organization provide no labor what-so-ever. Instead they are paid based on their ability to influence customers to exchange their money for your product or service, producing cashflow. This is a function that requires emotional intelligence and a high degree of creative thinking and problem solving, therefore it pays more. The pay range for a Communicator is between $100K and $100M per annum.

Level 4: Creation & Innovation (The Peak) 

This is the pinnacle of the value pyramid. At this level, your organization creates entirely new value propositions. Think: Introducing revolutionary products, developing innovative solutions, disrupting the industry with groundbreaking ideas.

At this level of productivity is where you find entrepreneurs, and the greatest High-Performance Leaders. Here is where your ability to solve problems, and provide better solutions is most valued. This is also where the most risk and failure resides. The people which thrive at level four have endured a massive amount of failure, and grown comfortable with it.

Unleashing Creativity and Personal Growth with the Four Levels of Value

At Marq Neasman Consulting, we utilize the Four Levels of Value framework to keep our meetings overflowing with creativity, not industry norms. Further we are not allowed to make mention to what anyone else in our industry is doing. It is far more valuable to listen to what our customer has to say than anyone else.

By focusing on the higher levels of the value ladder, we encourage our team to constantly seek new ways to add value for our clients. This approach stimulates a hunger for personal and professional development amongst our associates and staff, as they strive to climb the value pyramid alongside the organization. It also paints a clear picture of what we value most internally.

Real-World Case Study: Apple's Four Levels of Value

Apple exemplifies the power of the Four Levels of Value. Implementation: Their manufacturing processes are renowned for efficiency and quality control. They outsource most of the product design and build, because this is the lowest level of value. When it comes to Management: They excel at supply chain management and project execution.  Apple's marketing campaigns are masterful in Communicating the value proposition of their products. . Creation: Apple consistently pushes boundaries with innovative products like the iPhone and iPad, continuously elevating the value they offer to customers.

By understanding and optimizing each level of the value pyramid, your organization can climb to the peak of success and avoid getting stuck in a competitive rut. Focus on efficient implementation, effective management, clear communication, and relentless innovation to unlock your full potential and consistently deliver superior value to your customers.

Power Thought

Never look to competitors for validation because they are not the standard, instead focus on the customer. They will tell you everything you need to know to retain them as a client. Lastly, be comfortable with failure. For every product Apple has launched and been successful with, there is a graveyard of products that failed.

Remember, a strong foundation is crucial, but it's the ascent to the pinnacle of creation that sets truly high-performing organizations apart. This framework empowers your team to become value creators, not just competitors, fostering a culture of innovation and continuous learning within your organization.

Be sure to share this with an associate that could benefit from an innovative thought.