Blendedblog.org

Josh Spitzer — Nov 5 2005 11:46 PM

Why don’t some people “get” blended value?

Having followed Jed’s work for a while and having lived almost 32 very modestly thoughtful years, I find the concept and experience of blended value to be so true that it doesn’t even merit a second thought anymore. Yet, when I first came across the blended value proposition (in Jed’s paper “The Nature of Returns,” I think), I was positively floored to find such a simple explanation of the way that we experience the world. I found it profound not because overturned my notions of value but because it articulated them with the kind of clarity and rigor that I had never been able to muster. I guess, then, I find it a little surprising that Jed has to keep explaining blended value.

I have spent a fair bit of time thinking about blended value and talking about it with believers and nonbelievers alike. Over and over again, there are people in Jed’s audiences or on the other side of my conversations who have surprising reactions. Some just don’t get the idea of blended value. Others think it is quaint. Still others suggest that blended value is not the product of rigorous thinking.

Why do people react that way? How is it that blended value can so clearly describe the world in which I live—and at the same time can seem so alien to thoughtful, analytical, intelligent people? What exactly are those "lenses" of which Jed speaks, and how are they polarized to filter out certain components of blended value?

Answers to those questions might help us—help me, at least—articulate the blended value proposition to those who don’t get it now.

Laurance Allen — Nov 6 2005 08:54 AM

I didn't realize that applying the term 'blurring' to the lines between sectors, which was given much currency by Greg Dees' seminal piece defining social entrepeneurship, would be like putting a burr under Lakota's saddle!
But on reflection I think you're right. 'Blur' adds to the fog and cloudiness around the whole discussion of value. 'Blended' seeks to arrange a fit, an integration suggesting complementarity between sector actors to synthesize and unify the whole concept of value. Harmonizing the cross-cutting themes across the (your) map in our new magazine is an exciting prospect, and I'm delighted that there will be room for dissenters, from this blog and elsewhere, and that due attention will be paid to the subject of value destruction--disvalue--as well as value creation in all its forms.

Tim Freundlich — Nov 7 2005 10:02 AM

Yup. This is exactly why the DBL and TBL language is going to need to go by the way side sometime soon. It's not divisable, yet we langauge it as if it is and it reinforces a schism. It's neither blurred, nor is it multitrack.

Funny that folks get it on a personal level but not within the investment frame or even work frame often. When I choose to be with my wife Julie for a morning with the NYTimes, this is not the blurring of my usual mercenary efficiency standards with the introductions of social value! When I write a donation to a documentary film production, this is a deployment of financial capital. It's got a pretty crappy Financial ROI to me personally (my tax rate, or immediately -70% [or whatever it is]). It's got a perhaps fabulous FROI to the policy level impact on healthcare subsidy if it's effective. It has got a great AROI [Arty ROI]. :) It's a mish mash of all sorts of value.

Are these things blurred? No, they are life. We make choices every nanosecond. None of which make sense in a purely return maximized market rate mindset.

On Nonprofit vs Forprofit...obviously related...blurring is probably not the right word for the same reasons above, though understandable in that we want to say HEY look at the capital you need, human talent attraction, and financial type -- what makes sense - what's the reality. And look at your mission. Let that pragmatically dictate your corp structure. It's not blurred, it's not blended even. It's just what it is.

Kevin Jones — Nov 7 2005 02:11 PM

Jed, I agree that value is indivisible, and at the same time, exists in a connected spectrum like rays of light. On the other hand, I confess to having used the "b" word because I know many people from my business life who have such a sharp, unnatural bifurcation between the parts of their lives where they think only about the money they can make, reducing everything to financial terms, and the "human" part of their lives, where they love people, contribute to charities, etc.

While value is not blurred, but exists in a spectrum, that wall between giving and investing is breaking down; people who have lived their lives within that bargain "profit" over here and "my life" over there, are opting out; chosing to put their money in line with what they care about.

While blurring does not describe value accurately (that is never blurred, I agree; it is infinitely and subtly parsed to achieve the greatest benefit) some kind of mental barrier, some conceptual framing is breaking down, at this point in the culture, at this zeitgeist moment. And I think blur may accurately reflect the breaching of that blood brain barrier; the interpenetration of social value into the financial sphere in a new and bigger way. But if the word really pisses you off, I would be willing to use another if you could suggest it. I would say our disagreement is minor because it's the mindset, not the value that is fuzzy in this stage of transition.
http://www.xigi.net is where I am exploring that shift.

Sheila Bonini — Nov 18 2005 12:38 AM

Jed -
It is always refreshing to read your comments! I think your are spot on to object to a blurring of value - but often when we speak of blurring boundaries, we are speaking about our perception or understanding of roles. We have an understanding about what business does, what government does and what nonprofits do. Behind the "blurring" is the reality that these roles have been shifting. Responsibilities that previously sat with Governments are increasingly being carried out by NGOs (see Michael Edwards and David Hulme on NGO Accountability) and there is a rising tide of expectations on business as well. It seems like this shift gives rise to a different spectrum of value for all parties.

Sheila

Marco Spada — Feb 1 2006 01:00 PM

Life is the blended harmony of the Yin and Yang.
CHUANG TZU

Yes, I definitely agree with the Light Spectrum metaphor: Value blends, Value flows. Value is Energy. Therefore, according to the First Law of Thermodynamics, Energy is continuously converted from one form to another. Energy blends. We cannot freeze Energy into static (organizational) forms. Therefore Value cannot be separated into armoured silos (i.e. the sectors: government, business, non profit) but only converted from one form (financial value) to another (social value). Yes, “it is a blend not a blur.”
All the players in the game must communicate and achieve much more than mere sector blurring: organizations - whether govt, bus, NPOs - share the same goal, namely, value production. Value cannot be separated and classified according to an old-fashioned Cartesian model. We now know that the whole is more than the sum of the single parts. Therefore, we need to get rid of traditional mind-sets and move to different approaches and paradigms.
A Cartesian approach to value, dictates a partition of the latter into Economic Value and Social Value blocks, within a zero-sum game. Differently, a complex and systemic approach, considers value as dynamically generated by the continuous interaction between Economic Value and Social Value.
Hence, what is Economic Value becomes Social Value and the opposite, in a continuous cycle of transformation. We are moving from a linear, reductionist logic to a non-linear, systemic logic.
Systemic thinking represents a major revolution in the history of Western scientific thought. Furthermore, systemic thinking converges with Eastern thought, particularly the principles of Taoism. Tao is intangible, yet it is everywhere and everything – just like Energy.
According to such a millenary philosophic tradition, the Yin naturally blends into the Yang, within a perennial cycle of harmony. Bluntly put, two main reflections arise: 1)The Inter-Penetrating and Ubiquity of Yin and Yang. 2) The dynamic Pattern of Tao.
I suggest to apply these reflections to our BVP, paving the way to a “Taoist foundation” of the latter.
Drawing on the Taoist philosophical tradition, I dare to say that Value is generated by the dynamic interaction between Economic Value and Social Value just as Tao is generated by the rhythmical interplay between Yin and Yang. Thus, Value Blends from one form to another as the Tao does it.
The Cartesian, linear logic of reductionism has been overcome by the Taoist, non-linear logic of holism. This is a new land, where [Yin-Economic Value] blends with [Yang-Social Value] into the oneness of the [Tao-Blended Value].
A millenary philosophical tradition to support a state-of-the-art framework. A blend of past and future for the development of the present. Jed’s proposition, provides us with a new lens to approach contemporary reality. The world of blurring sectors has now been fixed up into its dynamic framework. Opposites must be blended into a value-generating harmony.
The perception of reality we develop depends on the lens we use. Perceiving the contemporary world through the lens of the blurring boundaries, seems like eating a soup with a fork: it is not the right tool. At this point, we need to be equipped with the right tools for our scouting expedition in this new land. The Blended Value Proposition may represent an effective tool to grasp the reality “out there”.
Being aware of the BVP, we can act in harmony with the actual state of contemporary society, becoming effective and successful over the long-term.
Being aware of the Tao, we are able to act in harmony with the natural order flow: Wu-wei.
Given these reflections, a new vision of our planet arise. But this new awareness is not enough. Actions must consistently follow. We must work for a sustainable development, i.e. a long-term process of harmonious development of economics, society and the environment.

Marco.

Sara — May 23 2006 12:10 AM

I just discovered your blog (on xigi.net) while scouting for related sites to add, and must say I think the medium was invented for you, Jed! (Glad to see you're enjoying the formatting tags also.)

Until definitions are either marketed into meme-dom, or acquire a natural utility that makes intuitive sense to everybody, I think it's all a matter of one's perspective on the question of value, and one's relationship to what is going on, that determines what term one uses.

Some people may think in terms of the structures that govern the markets. The world is changing, markets are changing, and the inherent limitations of these structures are being tested like never before. As people create new entities that combine structures to achieve greater (blended) value, some people whose whole orientation to the world is based on the old system must miss the seeming clarity and stability of the era gone by... when nonprofits were nonprofits and for-profits were for-profits.... To these people, things used to be clearer than they are now, so they think of what is happening as "blurring." I can understand why.

By the same token I doubt these people are the same folks who are are out trying to educate the whole field about what terms to use.

Separate from the semantic debate, I see the operational merit to calling out the different types of value: social, financial (private), environmental... because people run nonprofits or companies or investment institutions that previously didn't consider the "other" aspects of value, who want to begin taking account of some of the non-financial value, are only able to move their institutions forward by explicitly calling out this other value-- by naming it and making people responsible for measuring it. Whether they call it "sustainability," global citizenship, social return, environmental benefit, or whatever matters to them, it needs to be named in order to be seen.

Duncan Robins — Jul 4 2006 02:27 AM

Jed:
I just listened to the podcast of your SSIR speech on Blended Value. I enjoyed what I heard and would like to add to the discussion. But, as a turn-around guy that has a blended value approach, I've found it hard to link with others of similar views that have had experience in multiple "silos".

I actually got so frustrated with my inability to reach people, that I wrote a short book "Pathways to Organizational Wealth" (just now coming out from XLibris)that expresses what I have been applying in various types of for profit, not-for- profit and public benefit organizations. In this short book, I grapple with the definition of "Value" across all types of organizations and suggest a conceptual definition and approach to maximizing value that has worked for me as both an operator and as a consultant.

Help!...can you think of anyone that might want to discuss the topic?

All the best from another remote dwellar (Humboldt County, CA)

Duncan

Jim McClurg — Sep 2 2006 01:08 AM

Dear Meat Eater:

Hey Jed! At the risk of having you toss your lunch in my direction, it's time for a belated response to your original blog. Methinks thou doth protest too much!

For some, including myself, the use of the word “blur” is not a result of misinformation, but is instead a TACTICAL decision. Why? Because the bifurcation between the purpose, markets, capital structures, etc. of the nonprofit and for-profit sectors is “real” insofar as perception is always reality. This is more than a trite phrase, it’s hard truth.

You speak eloquently and often to the fact that such bifurcation is imaginary, naïve, harmful, etc., and of course you’re correct. The visible light spectrum metaphor is spot-on.

But the issue all of us face who are tasked with advancing the field is how to challenge existing belief systems in a way that engages, entices, intrigues. In many ways, your writings in recent years represent the shock troops of this battle. Given an audience with the time and open-mindedness to have their core belief systems dismantled and reassembled, this approach works very well.

However, while you may properly criticize the word “blur” as being conceptually invalid, it has one advantage. It poses no threat to existing belief systems; it begins by confirming what the audience believes to be reality and as such leaves the door open to dialogue.

The Apostle Paul provides an analogy that a fellow preacher’s kid would appreciate. When Paul addressed the leaders of Athens, he didn't start out by telling them their belief in a panoply of “gods” was idiotic and blasphemous. Instead he praised the evidence of their spirituality. Of course, this was just his introduction to remarks about the idol they had built to the Unknown God, and he proceeded to elaborate on the identity of that Being, eventually revealing truths that led to the conversion of many.

OK, OK. An overstatement of the argument, but I routinely have audiences nodding in agreement and understanding as I discuss the "blurring" of (albeit nonexistent) boundaries between nonprofits and for-profits. And it's an easy next step to get them discussing the emerging Fourth Sector, a place where differently-structured entities share an interest in blended value creation.

Bottom line: take a deep breath and another antacid. :-) We're all trying to get to the same place by different means. To the extent that the word “blur” reinforces bad-thinking, those of us who still use it need to be extremely careful, ensuring that we don’t allow such language to harden erroneous and pre-conceived notions, but rather as a means of enlightening folks to a different reality.

My two cents' worth.

Simon — Jan 4 2007 04:07 PM

Hi everybody,
veggies and meat-eaters,

coming from a non-english background (german) I was thinking about the difference between worth and value:
In german both can be translated as "Wert" which means, at least in my opinion, rather value than worth. However since this translation is more subjective, here are the other translations for each of these:
worth= Wert, Gegenwert, Lohn, kostenneutral
Translated into english: value (again!), counterpart/price/value, wage, cost neutral

value= Wert, Nutzen, Bedeutung, Bewertung
translated into english:
value or worth, use, meaning, valuation and judgement

To give an example: You can invest 5 million into a project and just come out with nothing, no profit, no loss. One can say it was worth it. it was cost neutral. you even learned something.
But did it create value? Probably not.

Coming back to the question why some people don't get it or understand longer for it:
We are talking about a paradigm shift here. This involves change. And you can't change people. People just change by themselves. Or rather, they don't even change, the just chaneg how they look at things. So why some people, the mayority, don't want to change? The don't resist so much the change themselves but rather "that the will of somebody else is acting upon them" (cite from David Bornstein's books, How to change the world?).

It is hard to come out of nearly 60 years of capitalism thinking and a rather stable environment into oen where change is the only constant.

And why do people blur between NPO and for profit organizations? Maybe it is just a step towards the new paradigm.
Thesis -- Antithesis -- Synthesis

Regards
Simon

Jessica Margolin — Jan 31 2007 12:03 AM

I agree with Simon's take, based on my own anecdotal evidence: people have one closely held view of the world, then they see ways in which it "fails," then they see ways to sidestep the failures. This is "blurred."

They are capitalists; they think like capitalists, and philanthropists are different and foreign.

Even if they can only do this from both sides of the boundary -- they're "bicultural" -- it's still blur. Well, now it's two blurry edges instead of one.

People have been seeing two systems that abut, like "my house" and "your house." When we imagine that we pull out the fence, the boundary blurs when the plants that take root exist on both sides.

However, blending is representative of seeing the whole thing as one system. Imagine that both houses now belong to one property owner, so the boundary between them is just one point on the continuum from the south edge of the property to the north. There's no blur - it's a nonsensical concept. Why would this inch here "blur" into that inch there?

Blurring implies a boundary. Blending implies one single system.