The Role of Æilus in the Theory of Value Management
The Theory of Value Management describes value as a systemic property that exists within complex organizational systems. However, a theory by itself does not prescribe concrete mechanisms for measurement, aggregation, or modeling.
Æilus is one possible formalization of the Theory of Value Management.
It does not claim to be the only or definitive model, nor does it aim to exhaust the theory itself. Æilus represents a specific way of operationalizing the concepts of value management so that they can be analyzed, compared, and applied in practical and analytical contexts.
What “Formalization” Means in Æilus
In the context of Æilus, formalization refers to the transition from abstract theoretical concepts to:
- explicit structures
- defined rules
- comparable quantities
- reproducible models
Æilus introduces a formal language in which value can be:
- described
- compared
- aggregated
- transformed
without reducing it exclusively to monetary or financial measures.
The Value Currency Æ
At the center of the Æilus formalization is the value currency Æ.
Æ is not a monetary unit and is not intended to represent financial value directly. Instead, it serves as an abstract unit of measurement that enables comparison and aggregation of different forms of value within a system.
The value currency Æ allows organizations to:
- compare otherwise incommensurable initiatives
- make managerial assumptions explicit
- discuss priorities beyond functional metrics
- separate value from cost, effort, or activity
Æ is a tool of formalization, not a claim of objective or absolute value.
Value Flows in Æilus
In Æilus, value is treated as a dynamic flow, not a static quantity.
Value flows:
- emerge
- are transformed
- may be amplified
- may degrade
- may be partially lost
Each value flow has:
- a source
- a direction
- an intensity
- associated losses
This perspective makes it possible to analyze not only outcomes, but also how value evolves over time within a system.
Anti-Value in the Æilus Formalization
Æilus introduces an explicit formal representation of anti-value.
Anti-value is defined as an active negative contribution, expressed in the value currency Æ, that reduces a system’s ability to achieve its objectives.
Unlike traditional models where losses are treated as secondary effects, Æilus treats anti-value as a first-class element of the system.
This includes phenomena such as:
- technical debt
- delay and waiting
- accumulated risk
- architectural degradation
- coordination overhead
By formalizing anti-value, Æilus enables more complete and realistic modeling of organizational dynamics.
Value Converters
Within Æilus, all elements of a system are modeled as value converters.
A value converter:
- receives value at its input
- transforms that value
- produces value and/or anti-value at its output
Value converters may include:
- teams
- processes
- products
- platforms
- managerial decisions
This abstraction allows organizations to be represented as networks of value transformations rather than collections of isolated functions.
Aggregation and Comparison of Value
A central objective of the Æilus formalization is value aggregation.
Æilus defines conditions under which:
- heterogeneous value flows can be normalized
- local assessments can be aggregated into a system-level view
- managerial decisions can be compared on a shared scale
Aggregation does not imply precision. It implies comparability, enabling rational discussion where previously only narratives or political arguments were possible.
Limits of the Æilus Formalization
Æilus does not claim universal applicability.
It does not:
- replace economic models of markets
- describe price formation
- predict financial outcomes
Æilus is designed specifically for internal complex systems, where classical economic theory offers limited formal tools.
Relationship to Practice and Tools
Æilus is not a tool in itself.
It may be applied:
- conceptually
- analytically
- manually
- programmatically
VSS (Value System Schema) represents one automated implementation of the Æilus formalization, designed to model and analyze value systems explicitly.
Openness of the Formalization
Æilus is not a closed standard. You can use Æilus for free based on the information you receive on this site, but we still recommend training and certification.
It allows for:
- alternative formalizations
- refinement of definitions
- critique and evolution of axioms
- the emergence of other value currencies or models
Over time, Æilus may become one of several formal schools within the broader Theory of Value Management.
Conclusion
Æilus does not seek to be a theory.
It is an attempt to make the Theory of Value Management operational, while preserving its fundamental nature.
Formalization does not complete a theory.
It makes a theory usable.