Observing value in everyday situations is a powerful first step.
We notice delays, frustration, satisfaction, wasted effort, unexpected success. We see that value can be created, distorted, or lost - often without clear reasons.
However, as soon as situations become more complex, simple observation reaches its limits.
When intuition stops being enough
In small, simple interactions, intuition works well.
You can often tell:
- who benefited,
- who lost time or effort,
- and what went wrong.
But as soon as we deal with:
- multiple people or teams,
- long chains of actions,
- delayed effects,
- conflicting expectations,
- or systems interacting with other systems,
intuition becomes unreliable.
Different people describe the same situation in different ways. The same outcome is interpreted as success by some and failure by others.
Without a shared language, discussions turn into opinions.
The problem of inconsistent descriptions
Consider how value-related problems are usually discussed:
- “The feature was good, but the timing was wrong.”
- “The team delivered, but the impact was low.”
- “We invested a lot, but the result didn’t justify the effort.”
All these statements are valid - and yet incomplete.
They mix together:
- expectations and outcomes,
- creation and consumption,
- effort and effect,
- local success and system-wide consequences.
Without clear distinctions, it becomes impossible to explain why value appeared or disappeared.
Why a formal language is needed
A formal language does not replace experience.
Its purpose is different:
- to make implicit assumptions explicit,
- to separate different types of effects,
- to describe complex situations consistently,
- and to allow comparison across cases.
In other words, a formal language allows us to talk about value without constantly redefining what we mean.
When value cannot be described consistently, it cannot be analyzed or improved systematically.
What needs to be described
To move from observation to understanding, we need to be able to describe at least:
- Who is involved in the exchange,
- What is being exchanged,
- How expectations are formed,
- How outcomes are experienced,
- When value is realized or lost,
- Where value accumulates, leaks, or gets stuck.
Importantly, these descriptions must remain valid even when:
- value is not monetary,
- effects are delayed,
- outcomes are ambiguous,
- or interpretations change over time.
Separating observation from prescription
Another critical requirement is neutrality.
Before we decide what should be done, we must be able to describe what is happening.
A language that mixes description with recommendations introduces bias.
For this reason, the next step is not a framework, a method, or a tool.
The next step is a theory.
What a theory provides
A theory provides:
- a defined set of concepts,
- clear distinctions between similar-looking phenomena,
- rules that limit arbitrary interpretation,
- and a foundation for reasoning about complex systems.
It does not tell us what decisions to make.
It tells us how to think about what we observe.
From language to structure
Once a formal language exists, it becomes possible to:
- map value exchanges,
- identify recurring patterns,
- understand why systems remain stable or collapse,
- and reason about consequences before acting.
This is the role of the Theory of Value Management.
It does not start with management. It starts with understanding.