Follow me on Twitter

Monday, 21 November 2011

Dematerialisation & Density: The Value of Things in context

We hear it all the time and I've certainly said it again and again. Value comes from use, value is in context but why is it we still hear firms talking about value as the money they get for their things, and we still hear how they firms 'add value' as though the things in themselves have value?

So I really want to blog it to set things right. It's also the first of a series of blogposts around Dematerialisation and Density because it leads up to my current research projects. So let's start.

THINGS HAVE NO VALUE IN THEMSELVES. repeat after me. ok. then you go back to business and start talking about getting more value from the things, keeping the factories open, keeping the jobs coming in and you have forgotten what you said. so let me join the dots for you.

THINGS HAVE VALUE BECAUSE YOU IMAGINE IT'S USE. so basically, its not the thing you value, its what you THINK the thing is going to do in your life. that iPad has no value, you are imagining reading a book, checking emails... you are attaching the use of the thing in the context of living your life that is of value.

so.....WHEN YOU IMAGINE ITS USE, YOU IMAGINE THE CONTEXT. so not only do you think about what the thing is doing in your life, you had an imagined scope of where and how and when the thing is used for (the context). that's why you think the thing is good. you are really thinking thing-in-context is good, which you believe means the same thing (wrong)

YOU IMAGINE THE CONTEXT IS CONSTANT BECAUSE THE THING IS CONSTANT. yup, so when you buy an iPad, the iPad doesn't change its form, get moody, or become a different iPad at different times so you believe the context of use can stay the same when you buy the iPad, you are thinking about lying in bed, reading. when you're thinking of buying that apple, you are thinking about eating it in the next hour, the toaster and the warm toast etc. etc. etc. so when you're buying something, you're actually evaluating the value of the THING thinking that it is a  THING-IN-CONTEXT

here's the bad news, firms don't manufacture context. they manufacture things.
and the good  news? YOU 'manufacture' the context. and then magically, they come together and it is good.

that's co-creation for you.

but CONTEXT changes. context comes with contextual resources for you to be able to use, experience the thing. From simple contextual resources such as light to read, quietness to talk on the phone, to more complex 'emotional states' that lend resources such as mood (to enjoy a glass of wine), or composite combinational resources created by you and your environment, CONTEXT is not a simple concept. And context exist in layers as well - from a micro to a meso to a macro level (see Chandler and Vargo, 2011, Marketing Theory). Also, context is not external to you. YOU are part of the context. So is the thing. So the value creating system is YOU(ACTIVITY)-THING-ENVIRONMENT - that's context. change one, change all. change the 'goodness' created. change the value of the thing.

so what do firms mean when they talk about 'adding value'? well, ahem, they just assume you will do your part right? just like you thought the thing was constant and you decide to  manufacture all sorts of contexts to use the thing, the firm thinks YOU are constant and they decide to make better stuff (we hope). and they call that adding value because they want you to pay more NOT because they are giving you more 'goodness' (how can they do that, when they dont control the context?). what firms DON'T often get is when they change the thing, they often change the context that you need to 'manufacture' as well. example. mobile phones morphing into life-enabling-thing.

why does this matter? The world of connectivity is starting to enable different contexts, we can now 'see' context better, measure better (you see me talk a lot about context in my research into systems and how we are collecting 'verbs' etc. as measurement of contexts, I have an EPSRC research project on contextual invariances in energy consumption and business model). also, you see the rise of data analytics because the visibility of experience and consumption is giving rise to a new strategic lever for changes in behaviours and society - strategies surrounding CONTEXT. you also see things and contexts interacting at design stages.

so... for all those who really want to know what is value, how it's created and why people buy at higher or lower prices etc...........IT'S THE CONTEXT S****D.....

lol, i've always wanted to say that. next blog post (soon i hope).... more on contextual value...I will soon come to dematerialisation but these are a series of blog posts that would lead up to it.


  1. Irene,

    interesting article. I have a couple of questions, though. As a precursor: I do not doubt the service dominant logic as a general concept. But I think that there is a chicken-egg problem buried somewhere.

    Why can't company assume a number of usage contexts for the things that they produce?

    Context has so many variables associated to them that it appears fair to me to say that I as a consumer/user of a product do not control context as well. Is this valid?

    Can't a product that I buy/use change my context, too? Look at cell phones. 20 years ago I didn't think of them at all, nowadays we can't live without a smart phone.

    That would then end up as creation of value first FOR a customer, then with the customer by companies imagining usage contexts which create or hit a demand (value for user) and then get extended upon by the users putting the "thing" into and using it in additional contexts (co-creation of value with user).


  2. Thomas

    Spot on. A company always assumes a number of usage contexts for the things they produce. But they are not there when the customer enacts them, so they may not understand the inadequacy of the product but actually I would argue that firms are not even thinking that way. They just assume that the contexts they have designed for hold - because that is what the requirements specify and they dont look beyond the requirements. And you are right - context has many variables that the user are not always in control of the contexts e.g. not being able to use an ipad to read while a plane is taking off etc.

    customers are repurposing products in different contexts all the time. In one of my papers and a series of my talks I talk about contextual variety as the first manifestation of need that may not yet been met so innovation comes from being able to understand context and contextual variety to understand latent demand arising from such 'exotic' use.

    You definitely have got the point I was trying to make!