The business world is a place full of euphemism. When we talk about innovation, we could be talking about many things, but probably we mean some sort of incremental change. When we talk about disruption, we’re probably talking about a sort of change that is less incremental in nature. But perhaps the most opaque—and most crucial—of all these threadbare buzzwords is the phrase to create value. What is value? What do we mean when we say something is valuable? When we say a person is valuable to us? Are those two things the same? What about for products or companies?

In strictly economic terms, we can say that value is about exchange, about the price someone is willing to pay for a product, though that can hide the full picture. If, for instance, you’re buying a shirt from a manufacturer whose supply chain pressures are so low that it makes for unsafe working conditions in the developing world, the price hides that greater, though less tangible, cost. As our friend, author, and self-professed value guru Nilofer Merchant would say, value can be a micro or a macro measure, a question of immediate transaction or the whole package of exchange.

To get to the whole package, then, we need to do some digging. As usual, we can ground our understanding by getting to the root of the word: value comes from the old French valoir, meaning “to be worth.” What, then, is the function of the worth? Wealth, as we learned earlier, is stuff that people want, and worth is closely linked to that democratized desire. So what do people want? At the core, people want what they think will enrich their lives, though that can be all sorts of things whether or not they know it. That means that by making products and services, we make many sorts of interrelated value, though people may not realize it. The best products, then, address these voiced and unvoiced potentials.

Apple, that aesthete among manufacturers, has a deep understanding of such things. The Forbes writer Carmine Gallo captured this, noting that if you walk into an Apple Store, you’ll find that the laptops arrayed on those beautiful blond wood tables all have their screens tilted to a precise 70-degree angle, open just enough for you to see that there’s something going on in there but closed enough to obscure the desktop richness contained inside. This is by design.² Why?

It is done to “encourage customers to adjust the screen to their ideal viewing angle—in other words, to touch the computer!” Gallo writes. “It’s also why all computers and iPads in the Apple Store are loaded with apps and software and connected to the Internet. Apple wants you to see the display for yourself and to experiment with apps and web sites to experience the power and performance of the devices.”

What Apple is trying to cultivate in the cozy confines of the Apple Store are ownership experiences, Gallo contends, and this speaks to how much of value is unquantifiable, is not found within the price, and is emotional. What happens when you handle a product? You begin to get invested in it; you begin to see how it might integrate into your life (or not) and whether (or not) it will enrich your experiences. A physical interaction allows for a much faster transfer of information than reading reviews or talking to friends about which laptop to get; one could even argue that it bypasses that logical system. Rather than a one-time transaction, continued integration is the heart of long-term value creation as opposed to short-term profits: the more you, either as an individual or as an organization, can become entrenched in others’ lives as a source of benefit, the more you will be able to sustain your business. However, as we have explored in the previous pages, such a partnership is not a single occurrence but a continuous process.

The more we can attend to the varied, holistic aspects of value, of the ways our individual lives and organizations can enrich the lives of others, the more deliberately we create it. From creating intangible value, profits will emerge. That’s the other side of value: the tangible, the bottom line financials. When we’re trying to create value for the long term—when we’re trying to engineer organizations that sustainably innovate—we must take both the intangible and the tangible, the qualitative and the quantitative, into account. This chapter, we hope, will explain this process.

We think that part of the art of running a long-term organization is to recognize the relationship between the daily and the monthly, the quarterly and the yearly. Since we can only experience things in the present, we tend to think that now is the only moment and we can only see how the present relates to the past or future upon reflection. There is a Greek saying that a society grows great when old men plant trees whose shade they will never enjoy. As we discussed earlier, positive acts in the present do not always have immediate results even if they have superb returns down the line; it’s for this reason that people often don’t take care of themselves. The “returns” of family, exercise, and rest are not as immediate as burrowing into your work all night and getting a pat on the back from your manager the next day, but that doesn’t mean they’re not as valuable. As we’ve learned, people aren’t addicted to success but are addicted to the validation that comes with success, and so we need to build in our psyches and in our organizations other mechanisms for validation; otherwise that short-term-oriented, life-robbing system will remain entrenched. Such architecting was the concern of Part II of this book, and we hope it will be helpful in sculpting lives organized around meaning, growth, and empathy—and from those qualities, the ability to create value for others.

The same subtlety-appreciating intelligence that attends to the kids’ sporting matches, 20-minute jogs, and earlier bedtimes attends to the experience of the person walking into the store to possibly interact with a product and employees representing your brand. There is not an immediate return on the investment of piquing your potential customers’ curiosity and inviting them to play with the product; there’s no guarantee that the potential customer is going to make an immediate purchase. But that’s not what Apple is after. As Gallo observed, he walked into the Apple Store with his daughters, and they immediately started playing on a display iPad, already associating Apple in their minds with fun and freedom. This is long-term—maybe even lifelong—stuff at work here: value created in the form of emotional content, brand loyalty, and product familiarization, all of which predict continued purchases if the organization does its part and continues to innovate.

Holistic value is crucial across fields. One example is investing. When asked about the entrepreneurs whose companies he’s most interested in investing in, Bing Gordon, a Kleiner Perkins Caufield & Byers general partner, says that he’s not looking for 10-week relationships; he’s after 10-year relationships. Why? Because, he said to us, the company’s first idea is probably going to fail at some point.³ But with the right team, companies will be able to try another strategy. Beyond investing, value creation can be applied to organizational growth as well as relationships with members of the ecosystem and users. As we discussed in Chapter 7, the employees you have now are probably (or certainly) going to leave at some point to pursue their own projects and self-development, but that doesn’t mean that they’ve disappeared; they could, as one of your authors did, leave your gigantic corporation to start a consultancy and have their former employer become their first client. Though life may be short, it is also long, and we make imprints on people both as individuals and as organizations. As Maya Angelou observed, people will forget what you said and forget what you did, but they will remember how you made them feel.

In this way, value is a single event happening across many entities. It’s kind of like what Barbara Fredrickson, the positivity emotions researcher we discussed in Chapter 6, said about love: it’s an event happening in two bodies that is mirrored at many levels. When value is created, it resonates within everybody involved: a quality product, as we hope this book is, enriches the lives of the writers, the publishers, the readers, and members of the ecosystem we can’t directly name, such as the makers of e-readers or other people interested in holistic business or even the publications we already write for. The (hopeful) success of this humble little text you hold in your hands is something that radiates across many nodes in this strange, beautiful, and networked world of ours.

Interestingly, the values created by a product mirror the skills invested in it. It’s the extension of Conway’s Law that the internal systems of an organization are made manifest in its product. We can see that the internal lives of people are present in the products they make; for example, the cool, comfortable, empathic simplicity of Steve Jobs and Jony Ive are present in that 70-degree tilt of the MacBook in your nearest Apple Store.

Value, then, is a kind of reciprocal relationship. It is a communication in the same way that your mouth creates a sound and your friend hears a word. To take an example from the arts, a person masterful at the production of making sounds—that is, a musician—will be able to create great value when heard. In a less obvious fashion, the skills of a great manager will be present in the creation of her team and the crispness of organization, and if those skills are in alignment with the measured movement of progress among the individuals in the team, it will show up in the form of the team’s engagement, which will translate into an enthusiastically received product.

Interestingly, although each product is a single event—for physical products at least—the skills that created them are continuous. (An Olympic sprinter, for instance, does not suddenly become slow after winning a medal.) So much of continuous value creation is in ongoing cultivation of skills. This can be seen across human endeavors, whether political, artistic, athletic, or commercial. To illustrate that, let us return to one of the few humans who embodied all these traditions.

DA VINCI’S EVER-GROWING VALUE

Leonardo da Vinci was a man of mottoes. One of them was saper vedere, “to know how to see.” As we mentioned before, the artist-engineer thought many people knew how to look but few knew how to see. This reminds us of Truman Capote’s admonishment that what Jack Kerouac did was typing, not writing—for writing was much more refined than On the Road. Literary criticism aside, what is it to properly see? How did da Vinci see? As Daniel Gelb reports, da Vinci’s Codex on the Flight of Birds featured observations of the movement of birds’ wings so hyper-detailed that they couldn’t be confirmed until the invention of slow-motion film.⁴ To put it in the parlance of contemporary business-speak, that’s one hell of a core competency, and his observational prowess animated all of his work across the various domains he explored. For da Vinci, sight was the medium, the aperture, or the platform, from which his value would spring.

As is often the case, da Vinci started developing his sight early in life. His early sketch of the Tuscan countryside may have been the first landscape drawn in history—not bad for a 21-year-old—and his pioneering representationalism would help shift the blocky symbolism of the early Renaissance into the ethereal realism for which he, Raphael, and Michelangelo would be immortalized. The da Vinci biographer Serge Bramly contends that the maestro’s Portrait of Ginevra de’ Benci was the first painted portrait to include the sitter’s hands. Although the finished painting, now hanging in the National Gallery in Washington, has lost its bottom 20 centimeters and thus does not include anything of Ginevra below her bust, studies for the painting show the holistic delicacy of the artist’s observation: her right hand fingering at her bodice, her left resting at her stomach. It would require many more than a thousand words to capture the power of this preparatory picture, so let us defer to the artist himself:⁵

Give your figures an attitude that reveals the thoughts your characters have in their minds. Otherwise your work will not deserve praise. — da Vinci

Da Vinci’s representationalism, one so strong that it speaks to the psychological life of the sitter, speaks also to the crucial nature of empathy, that is, a recognition of the human experience of whatever product we are using our skills to produce. What is being represented? Bramly goes on to describe the image as a riddle, with the ambiguous sternness of the figure’s face in juxtaposition with the delicate self-consciousness of the way she holds her hands. Perhaps this is a manifestation of a prodigiously modern woman in late fifteenth-century Florence, for she both wrote poetry and had poetry written about her, including sonnets from Lorenzo de’ Medici (which, Bramly observes, was for her beauty as well as her refusal of courtship from a Venetian ambassador). What we have here is an image of softness and strength, independence and vulnerability—creative, united tensions that are as present in each of our lives today as they were 500 years ago.

This, then, evidences that the work da Vinci created is the composite of many skills—that is, the platform he developed within himself and would continue to develop in a range of directions throughout his life. First, his keen attendance to natural forms present in the photographic quality of the figure’s features; next is his sense for innovation, as the figure seems to blend into the background in previously unseen ways, an element of the sfumato he would continue to develop; finally, there are the subtle fruits of introspection. Although he was profoundly fascinated with the outside world, da Vinci also dwelled deeply within the environment of his own mental life; from these ponderings spring psychological passages in his notebooks and the deep interconnectedness he would return to again and again in his life. Just as we discussed in the first half of this book, intrapersonal knowledge breeds interpersonal knowledge, and the contradictions and struggles and triumphs that our artist delved into within himself—and the recognition of the way our interior spaces are made manifest in our external expressions—lend the figure the beauty of her precisely rendered tensions. The artist delved into his interior life, a depth reflected in the portrait we’re now taking in.

Although training in art history gives a person the vocabulary to describe it, the experience of taking in the image—especially those delicate, diametric hands—delivers the technical and emotional skills that the artist infused into the work. The value, then, is multifaceted in the way that the energy invested in it was multifaceted. Although we cannot know for certain the way this artwork created value across the nodes of the Florentine network, we can assume that it esteemed the sitter and her house as well as the artist, who was in his mid-twenties at the time of painting; though now timeless, back then he was an artist still establishing himself. Just as the sprinter seeks to improve from a top performance and a hardware firm builds upon a market-shaping release, da Vinci would continue to invest in—and draw from—his observational, representational virtuosity.

In the same way that a mature corporation will have many competencies developed along many axes—we can return to P&G for an example—so did the maestro. As you’ll recall, the strips that may be whitening your teeth this evening sprang from a collaboration between different arms of the world’s largest consumer-goods company, a combination of laundry technology (bleach!), toothbrushy institutional knowledge (what to do about the teeth), and canny ecological awareness (making a professional-grade product for dentists so as to not erode that crucial partnership).

Chapter 4 presented another organizational example: UPS and the platform-generating innovations it made. In the mid-1990s the shipping giant realized that its industry was maturing, and so it would have to look elsewhere for growth. Looking elsewhere necessitated a look inward: the company had organized itself around becoming the best in shipping and in so doing had built a number of strengths within itself—it had become a technology company, an airline, and an insurance company, not to mention building the managerial and infrastructure capabilities to handle all those multifarious facets. In the same way da Vinci had developed in himself an expertise in observation in order to create value as a painter—an expertise that would be involved in the myriad works of the Renaissance man—UPS had trained talents within itself that could be applied elsewhere. When a PC manufacturer came to UPS for help with its logistics, the organization was able to apply a previously developed expertise in a novel setting—in the same way, strangely enough, that the knowledge of the world da Vinci gained through his keen sight helped him throw masterful parties for dukes and duchesses.

For Leonardo da Vinci and for UPS, the potential lying latent in the strengths they developed was only found once they found new connections and then subsequent opportunities. By considering their core competencies holistically, both da Vinci and UPS were able to find new value; in other words, the more they realized that everything connects, the more value they could create.

Luckily for us, we can reflect on their adventures. From that reflection, we may be more deliberately holistic in the way we regard the single event of a product release as it relates to the ongoing effort of building platforms. Fascinatingly, the short-term and long-term forms of value tend to be quantifiable and unquantifiable respectively: da Vinci was paid a handsome amount of cash for the great ball that would be known as Masque of the Planets, we can be sure, but the fame he found as an engineer for his efforts would bring in more jobs and more money and more fame. Thus, although it is indeed often subtle stuff, the nature of long-term growth is that it doesn’t show up in a spreadsheet, but the brand that Leonardo slowly built was key to growing his bottom line, as with businesses today. That’s also the genius of the MacBook’s tilt: you may not be making an immediate transaction, but you are building an emotional relationship with the brand, one that could, if you’re a child playing with an iPad, become a lifelong part of your identity. That is very promising for Apple’s bottom line.

Taken at a meta-level, da Vinci had a similar corporateness to the corpus of his work. He began as a painter, a craft that trained his eye, but the observational skills he built there would ground his work as an engineer and architect and anatomist. His dedicated observation has one of its most regular applications in flight, one of the master’s lifelong preoccupations. Indeed, his faith in the power of the study of life and the interconnectedness of things emboldened him to tackle the problem of flight with confidence: “The bird,” he wrote in his notebook, “is an instrument functioning according to mathematical laws, and man has the power to reproduce an instrument like this with all its movements.” Bramly, the biographer, notes that da Vinci developed a theory of flight based on the “force” of air, which, we could say, anticipated later insights into lift. He probably started out with toy-scale models of potential flying machines, though we don’t know if he ever experimented with a human-size device.

As we can see from the diverse sources of a Renaissance master and a shipping giant, value creation is a continuous conversation between inside and outside. As individuals and as organizations, we need to devotedly cultivate resources in ourselves and help them find expressions in the world. As we noted earlier in the chapter, to deliver products to the world—whether they are paintings or shipping services—we have to assemble the capabilities within us, but those capabilities do not evaporate after the product has shipped.

However, there must always be a recipient for what it is we want to create. If I make a gorgeous painting but don’t make it available to the people, it is not valuable, you may say; indeed, if I am treating art as a business, I want to make something that fits the tastes of the buying public. Thus, when we think about building a platform and getting continuous value from the products we create, we’re actually talking about a form of conversation between the producer and the consumer: we the producers attend to the signals of the consumers and find what they like next even if they don’t know it yet, and then we can make something that will delight them—using the resources we’ve established in ourselves.

TANGIBLE LONG-TERM VALUE

We now arrive where we started. At the beginning of our journey together, we talked about the mysterious obviousness of the best long-term-performing companies at both start-up and corporate size. Interestingly, the start-ups that were most likely to one day reach an IPO weren’t the ones organized around star power or bureaucracy or autocracy but around commitment, the ones in which the members treated one another more like family than coworkers. (Why? Because, as one of your author’s best friends says, “You can’t let family fail,” and we couldn’t say it better ourselves.) That prosocial behavior between individuals, the research shows, is in fact probusiness. Then, over the proceeding chapters, we explored the different ways those bonds can be formed and why they are so powerful: we’ve recognized that organizations need to move with their maximum velocity, and that velocity is made possible by having a high degree of bandwidth between people—what one might call partnership.

Then, of course, there was BTM Institute’s own research, which showed that sustained innovation predicted greater capital efficiency, better margins, more revenue growth, and more contained volatility. But sustained innovation is composed of a range of behaviors, such as evolved organizational structure, collaborative behavior, and a concrete business blueprint. We then disentangled these outcomes into their antecedent behaviors: What kind of people working in what kind of way can do the individualistic yet collaborative and experimental yet structured path of sustained innovation? This path, we’ve found, is a personal and collective journey requiring intra- and interpersonal skills—those that, with practice, we can begin to embody.

Lastly there was the research of Alfred Rappaport, who has helped us see how short-termism has warped the behaviors of organizations and depleted their capacity for innovation. We then sought to find the intrapersonal skills that would help us free ourselves from short-termism, going as far as meditating on our own death and that of our organizations. The relationship between short-term and long-term thinking has since been a recurring theme, one that we can see equally in our personal and professional lives. Cheating on your partner may sound like fun but will create suffering and affect your personal trajectory; if you’re starting out in your career, taking a cozy job in a creativity-stifling environment might get you a quick payout but will surely stunt your growth; and if you’re a large organization, having a system of major annual rewards for executives orients your leaders toward acquiring bonuses rather than continually investing in the health of the organization and its customers. In all these cases, the quick hit certainly does feel good, but does it help us grow at various levels? This ethos of holistic growth is what we’ve attempted to describe—and attempt to live out day by day.

EMBODYING VALUE

How can we apply the principles of continuous value creation into our individual lives? First, we need a healthy dose of self-awareness: we tend to get so focused on the work we’re doing, the products we’re creating, and the services we’re providing that we don’t realize what the work is doing to us. We don’t realize the competencies that we’re building day by day—at least until it’s time to update the résumé and court a new job. When we say that a particular gig will be “good experience,” we are embedding several meanings, one of them being that the experience will give us an opportunity to hone the skill sets that got us there in the first place. This is a useful way to think about career planning: if we’re about long-term growth rather than short-term profit, we need to pick the clients, bosses, and organizations that allow us to continually build our skill sets and maintain the momentum that we and our ecosystem have built thus far.

This is probably most obvious in cases of “breaking in”; as we discussed before, even a young da Vinci has to do what every aspiring creative has to do: capture the attention of the powerful (or, today, a critical mass of people) and make the most of it. It was only after he designed the stagecraft, decoration, and illusions of the Masque of the Planets that Leonardo became esteemed as an engineer in Italy. The festivities were full of costumes and torches as stars and planets of the then-known solar system, if the court chroniclers are to be believed. Although he would not reuse the special effects of the party later in his life, he would continue to accumulate the social capital he gathered from the event, which would allow him to continue to grow his career as an engineer and artist.

What we need to attend to in our working lives, then, are similar inflection points: projects that can vault us across thresholds. If, as a manager, your team nails a project, that creates value that radiates throughout the organization and into its ecosystem. With that momentum we can take on greater projects that stretch our skill sets, strengthening both our capabilities and our name.

Key to this strategizing, then, is identifying what our greatest assets are in the first place. In a way, da Vinci was lucky: his illegitimate birth drove him to the then-low profession of painting, which would train him in the keen observation that would define his career. Similarly, we need to be conscious of the handful of core skills that we’re using across all of our various projects and be wise enough to find new applications for them. When asked about the resource that he used the most, one executive interviewed in this book said that his contacts, more than any other asset, are what drive his business and his investing. His relationships are the most core of his competencies.

This brings us back to the opening of our journey. While we are doing business and inventing technologies and disrupting industries, all of that is an overlay on something intensely fundamental: the interactions we have within ourselves and with others. We as humans are fundamentally intra- and interpersonal, and so the depth of understanding that we have of ourselves and others will be the asset that we use most throughout our working lives. The underlying architecture of our success, then, is the knowledge that everything connects.