Let me answer the question first. It doesn’t matter how you define value. That definition is actually worth a bucket of crap (I missed that one). But I digress and will come back to that question later. Let me address the other part of my title first by asking you a hypothetical question. Regardless of whether you believe in climate change or not, if I were to tell you that there was a way to provide you with water that you could bathe in and drink with a 100% certainty that it was cleaner than any other water source, would you use it? Now, if I were to tell you that it was actually recycled water but was still able to prove to you scientifically that it was absolutely clean, would you still use it? Would your answer still be the same if I were to tell you that it was waste (sewage) water from where you live?
It turns out that people strongly resist the 3rd option of using local waste water, even if they are facing a drought. Water prices are going up and scientists have categorically proven that it is cleaner than almost ALL other water sources (including natural springs). In addition, it has a significant positive impact on the environment, preserves water sources, eliminates the need to dispose of waste water, etc. etc. etc!
According to Alix Spiegel, from NPR, “No matter what the scientists or environmental organizations said, the public saw it differently: They thought that directly reusing former sewage water was just plain gross.” It turns out that you can take the physical excrement out of the water but you cannot take the cognitive crap out of it! The technical term for this is psychological contagion. The fact that ALL water has someone’s feces in it (upstream sewage) and the fact that birds and fish are contributing their feces is irrelevant. It just cannot be my scheisse. And it turns out that the only way you can get rid of my psychological dookie is to process the water through a natural aquifer, even though that will take 10 years AND it actually makes the treated water less pure!
The NPR article goes onto say that those working on the project didn’t feel that the public was looking at the scientific facts and simply rejected the water, infuriating water engineers who felt that the public was being irrational. If you replace public with stakeholders (customers) in that statement, it might represent what a large number of Sourcing/Supply Chain professionals might say. The reason is that we continue to define value as we see it, whereas our customers define value totally differently. Continuing to throw more spend analysis, decision optimizers, and Total Cost of Ownership (TCO) models at them is not going to alter the fact that our definition of Value Drivers is fundamentally at odds with each other. Unless we change our definition of value to match the definition of value by our customers, we will continue to knock at the proverbial C level door as a profession. By the way, redefining the Value Drivers is only half the battle. Actually adopting and implementing them is the real challenge.
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