The Hierarchy of Value

Digital Value Creation

In the last couple of weeks, I had numerous conversations about what I call the hierarchy of value. A good friend of mine, I call him Jeff, a private equity investor coined this term to me a few years ago. He used this model to decide which improvement projects to invest in and which to pass on in his companies. He wanted simple rules to help his management teams that go beyond hard value and soft value. He even used it in his personal life to decide what to buy and what not to buy. I keep coming back to the simplicity of the model whenever we discuss the value of digital transformation. So what is this hierarchy of value and why does it matter for digital projects?