Thanks to Eric Brown, I discovered this blog post from Umair Haque that talks about the difference between thick value and thin value. With the economy the way it is and stories of failed business executives getting big bonuses, there evolved a conversation about whether profit–or at least some kind of profit–might not be such a good thing.
Haque turns the discussion to value. Thin value is when a company profits off of a customer but delivers little or no value in return. The example he cites are cell phone companies that add relatively meaningless instructions to the beginning of voice mail–which you (and the bazillion other customers) have to listen to when you check your mail. This adds up to billions in profits for the cell phone companies (adds up to a lot of minutes), and a fair amount of wasted time for everyone else. Thin value.
And just providing expected value to the customer doesn't make it thick. Beyond the voice mail instructions, AT&T certainly provides me value by putting together all that goes into the cell phone network so I can call, text, email, etc. For some of their profit, they're delivering real value.
Fine, but what if it could also reduce pollution, or build my capacity, or build my community's capacity. Help me over the long term, not just now. The more you can do that, the thicker the value. Not only is this hard to do, it's hard to demonstrate. You can SAY I'll get benefits over the long term, but truly showing that doing this business with you now is helping me create a more sustainable world/system/community/individual over time is something else.
I think this has interesting implications for associations. At their heart, associations have generally been created based on thick value. There has to be enough of a "good of the order" there for an association to get off the ground. So when you pay dues and go to meetings and otherwise spend on an association, you're part of something larger that benefits a community you care about and benefits you in your career over the long term.
But I think we are seeing the bar being raised when it comes to thick value. Just consider my last post
about learning. We're now seeing that informal learning dwarfs formal learning. This can change the "thickness" of the value we receive from a formal training program, since we can get it or something just as good via the internet or our colleagues, etc. You're still delivering value, and it's "thickness" hasn't changed, technically, it's just that everything else got thicker. It's relative thickness that counts.
This is a generalization, but I think associations have been going through a massive erosion of their value thickness of late, and I am afraid too many association leaders don't see it. In many cases, they are still poised to create really thick value, but they end up missing that opportunity because they are so focused on re-selling the value that used to be thick, but is now getting thinner (relatively).
It's hard, because the original value is still there, it's just not as thick. Because we still see the original value, we don't want to abandon it. We figure maybe we're just not marketing it hard enough. Maybe we need a stronger "brand." Maybe we need some new social media tools to promote it.
None of that will overcome the thickness factor. What do you need to do differently to create more long-term, sustainability-based value for stakeholders? That could mean doing completely new things, enhancing existing things, REDUCING some things and ELIMINATING others (see Blue Ocean Strategy
for more on that). Restructure transactions where the value has become too thin (dues?).
But ignore thickness at your own risk.