rotmanmagazine.ca / 91Your 30 building blocks fall into four categories: func-
tional, emotional, life-changing and social impact. How did
you arrive at these categories?
We realized that we couldn’t just provide people with a long
list of 30 things to consider; we had to help them mentally
organize the elements. At first, we looked at the Periodic Ta-
ble for inspiration. Then we looked at Abraham Maslow’s
Hierarchy of Needs. This well-known ‘pyramid’ of human
needs starts out with basic physiological and safety needs.
Once these are met, it moves on to psychological needs like
belonging, love and feelings of accomplishment. And at the
top of the pyramid are self-fulfillment needs, like achieving
one’s full potential.
We noticed that these different ‘levels’ of needs could
be broken down into several categories: functional needs,
emotional needs and transformative needs. And ultimately,
at the top of the pyramid, it was clear that some sources of
value had to do with different forms of altruism or charity.
When we thought about our 30 elements in the context
of Maslow, organizing them into four categories made a lot
of sense. By the way, we’re not saying that our hierarchy is
complete. It’s really meant to be used as a heuristic concept
or guideline; there is room for improvement, and we may
discover other elements over time; but in our work with cli-
ents, we are finding the model to be quite effective, because
it provides a new way to think about value.
You have said that businesses today have to continually
look at their products and come up with new ‘combina-
tions of value’. Please explain.
There’s a lot of talk these days about Big Data and the use of
advanced analytics to uncover value — and I do believe data
plays a role in that. But at the heart of every successful prod-
uct or service is the concept of value that one is exchanging
with the consumer. People will give you their money, time
and attention in exchange for various types of value.
I would strongly encourage companies to spend at least
as much time thinking about what kind of value they can add
as they do thinking about what kind of analytics they can
use. My belief is that there is much more economic value to
be found by uncovering new forms of value. For example,
smartphones are really just bundles of elements of value:
you have your friends in your device; you have tools that
help you organize your life, like calendars; you have access
to your money; you have entertainment, whether it’s video
or audio. One of the reasons smartphones have been so suc-
cessful is that they deliver on multiple elements of value —
including functional, emotional and life-changing elements
— in a way that is unprecedented in business history. In our
work, we’ve been able to quantify that: With the iPhone and
iPad, for instance, Apple delivers on 11 of the 30 elements
of value. It’s pretty astonishing how they have achieved that.As indicated, your model traces its roots to psychologist
Abraham Maslow’s Hierarchy of Needs. Describe how
you extended Maslow’s insights.
Whenever I’m giving a talk, I ask the audience if they are
familiar with Maslow’s Hierarchy, and just about everyone
who works in marketing or strategy raises their hands. It is a
very familiar concept; people even say things like, ‘We need
to play higher up on the Hierarchy of Needs’. But then I ask
a second question: ‘Have you used Maslow’s Hierarchy in a
concrete way to help you think about your business?’ Very
few hands go up.
In other words, Maslow developed an intriguing the-
ory, but it has remained too academic, and people think it
pertains to basic human motivation — as opposed to being
directly relevant to business. Our extension of the theory
is mostly about making it more practical and applying it to
business. Our approach has really resonated with people,
because we have made a fundamental psychological theory
more appealing to business practitioners.People will give you their money, time and attention
in exchange for various types of value.