As far as creating value for stakeholders goes, there are at least three dimensions:
- Functional value: created through means to an end. This is an expected value.
- Political or financial value: created through positive feelings about the means that add to either political or financial capital. This is an added value but not always expected.
- Emotional value: created through the eventual positive feelings about the achieved end. This is an expected added value.
To create values for stakeholders, the ideal would be to focus on all three dimensions. In reality, the focus is often skewed towards one or two of them, depending on where you are in a bureaucracy, whose interest you stand for or how much influence you have in pulling it off.
In an organization, one issue with the separation of business functions is that, different business functions may focus on different dimensions, and if they don’t align well, then the values would be incoherent and skewed among the dimensions, causing conflict of interests or worse.
Alignment starts from identifying who your stakeholders are and what kind of values you create for them.
If you are part of a business function, then you are also a stakeholder to someone else. You’d want to know what kind of values are created for your function by others.
If you are not part of any business function, then you are part of some change or transformation unit. You’d really want to know what kind of values you can and are meant to create for all the business function stakeholders.
Conventionally, we tend to think that transformation creates functional values for organizational stakeholders. Pilot project! Experiments! Innovation! Optimization! Emerging tech! They buzz around like bees. But you can never tell with bees.
Whereas the transformation of an organization’s function or process creates functional value, that of its structure or culture creates financial or political value and that of its purpose creates emotional value.
Even trickier, whereas functional values are often easy to measure, political or emotional ones are often not.
There is nothing wrong with sticking to measuring functional values, until it becomes an unfortunate habit of always taking the easier way by avoiding measuring what’s harder to measure, such as political or emotional values.
What kind of values do you really create for your stakeholders? Why should you create them? Those are questions to ponder if you are working towards organizational transformation.
Note: believe it or not, this article was inspired by “A List of Goals Is Not a Strategy.”
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Noah Fang 
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