A Leader’s Value-Add

National Value Added Conference

National Value Added Conference (Photo credit: uacescomm)

“Value-add” has been a buzzword in corporations recently, with the intimation that our work should provide a uniquely beneficial contribution to our organizations. The etymology of this bit of jargon is a derivative of the economic term “value added”, which is the sum of depreciation, profit, and labor costs – or in other words, the difference between the price you sell something for and its production costs. The idea of a “value add” is similar in that it implies adding worth above and beyond the intrinsic value of a commodity. As the phrase is commonly used, that commodity is labor. The question for organizational leaders, then, is how do I add value to my organization when I do not directly participate in the production of goods? What is my unique contribution to my organization?

​Peter Drucker perhaps summed the answer to that question up the best when he wrote that, “The man who focuses on efforts and who stresses his downward authority is a subordinate no matter how exalted his title and rank. But the man who focuses on contribution and who takes responsibility for the results, no matter how junior, is in the most literal sense of the phrase, ‘top management.’” The value that we add as leaders in an organization is a function of our taking responsibility for the collective efforts of the whole. The value-add of a leader is in organizing the processes that make possible economic value-added.

​A leader adds value by setting the conditions that allow a business to do what it does. This can take many forms, as we can see by the plethora of titles present in any corporation’s C-suite. Whether you add value through finance, human resources, operational oversight, or executive decision-making, however, the nature of that contribution is the same. As a leader you are valuable not because of the position you hold, but because of the constant monitoring and caretaking of the vital work that you do. A leader creates enduring value by synchronizing the efforts of many people towards a single common goal, whether that is the manufacture of shoes or the writing of magazines. Where that unity of effort fails, the value of the product is destroyed. Imagine a men’s magazine editor who routinely allowed articles on the particulars of interior decorating to be published. The articles might be good, but they are hardly relevant to the magazine’s intended audience. Readers would start buying subscriptions elsewhere, and before long that magazine would be in financial distress. There can be no question that the editor would have subtracted value from the magazine by his carelessness – and in seeing where he takes value away we can clearly perceive where he ought to be adding to it. We can apply a similar test to our own roles as leaders. If you were to completely neglect something you normally do, would the business suffer for it? If not, you aren’t adding value by doing that thing and perhaps you should consider ceasing to spend your time on it. If by not executing one of your responsibilities you would hurt your business, then that is a place where you are a “value-add” to your organization. Obviously, those areas where you are a value-add are probably the areas where you need to focus your time and energies.


Invited Article: James Tollefson, author of the leadership blog thesixelement.wordpress.com


One thought on “A Leader’s Value-Add

  1. Reblogged this on The Six Element and commented:
    I recently published this article on the Business Leadership Management online magazine. It’s a little denser than what I normally write, but still relevant to modern organizational leadership. After all, part of communicating with your followers is knowing all the latest and greatest jargon. Hope you enjoy.

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