Per Bylund on a New Austrian Business Paradigm: Facilitation of Value
Key Takeaways and Actionable Insights
What exactly do we mean by paradigm?
In our project to make a useful link between Austrian economic theory and business practice, we earlier introduced the Austrian Business Model. This is a recipe to make a profit — a template adaptable to any individual firm.
A paradigm is precedent to a business model (see Mises.org/E4E_90_PDF). It’s the underlying way of thinking — a set of values, beliefs, concepts and practices that combine to constitute a distinctive entrepreneurial approach to business.
Per Bylund’s exposition of the principle of Facilitation of Value leads to a new — Austrian — paradigm for business. Here is the framework:
The Purpose of Business is to facilitate value for customers.
In today’s interconnected, fast-changing world, businesses are formed and managed with the intention of ensuring value experiences for customers. This challenge is fraught with uncertainty, because value is an emergent — and therefore unpredictable — property of the interaction of people, artifacts and behaviors in complex systems.
Customers, whether consumers or businesses, operate in their own system. They must fit everything they consume into their existing system — their life or their business processes and organization.
Customers experience value in their own systemic context. If they own a car, for example, they experience ownership value within a system of taking kids to school, commuting to work, and shopping, as well as in an intersecting system of service, maintenance, fueling, accessorizing, and replacing worn parts.
Businesses interface with the customer’s systems from their own system of design, procurement, resource management, partnering, warehousing, distribution, payments, technological enablement, regulatory compliance, communications and many more elements. A business system facilitates value to realize the customer’s experience within their own system.
The value of any offering is positively perceived by customers when they fit into their system is felt to be a good one and the offering contributes to system improvement or enhancement in some dimension. Uncertainty is always present because the system improvement can not be predicted with certainty in advance.
Austrian economics provides the principles for entrepreneurs, managers, and strategists to establish a unique, sustainable, profitable, and scalable process to facilitate value for customers.
The end-user / consumer takes the primary role.
A business can not be an assembly of resources or an expression of core competencies or the implementation of innovation in isolation. It can’t be the result of a strategy to penetrate a market or disrupt a competitive set without first understanding the hopes and dreams and aspirations of customers. It can’t be
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