Entrepreneurs, Contributors, Administrators, and Thieves — The Value Matrix
Introduction
One of the levers of motivation that leader has, is to communicate the purpose to his team members. Why are we even doing this? One of the aspects I find useful is to explain how we create some value (rewarding the community, or some broader audience, e.g. “the world” — we are doing something good) and how we capture some value (answers “what’s in in for me” question).
Hence, the value matrix.
The Value Matrix not only helps us understand roles and behaviors within organizations, but also provides a framework for grasping the fundamental concepts of value creation, capture, and also delivery (not focus of this article). Let’s dive deeper into these concepts to address common questions and provide actionable insights for leaders and contributors alike.
Not everyone shares the same vision of how much value creation vs. value capture we should participate in. Hence, value matrix helps us understand who we want to work with, or not.
But before diving into characters in the Value Matrix, let’s briefly explain what each of those dimensions (value creation and value capture are).
I have addressed this subject before — but in this article we dive a bit deeper.
What is Value Creation and Value Capture, and Delivery?
At its core, value creation, capture, and delivery represent three interdependent aspects of how organizations generate and sustain success:
Value Creation: This is the process of generating something beneficial — be it a product, service, or experience — that fulfills a need or solves a problem.
- Example: A tech company inventing a device that makes communication faster and more accessible.
Value Capture: This is how an organization or individual monetizes or benefits from the value they create.
- Example: The same company pricing their device in a way that ensures profitability while remaining competitive.
Value Delivery: This focuses on the mechanisms and strategies used to ensure the created value reaches the intended audience effectively.
- Example: Distributing the device globally through retail and online channels.
Together, these elements create a loop that drives business sustainability. Creating value is essential, but without capturing and delivering it effectively, the effort can fall flat.
The Difference Between Value Capture and Value Creation
Value creation and capture are not the same, though they are closely connected:
- Value Creation is about producing something valuable. It focuses on innovation, customer satisfaction, and solving problems.
- Value Capture is about retaining a portion of the value created to ensure profitability or rewards.
Example:
- A company that builds an app (value creation) needs to monetize it through subscriptions or ads (value capture). If they don’t capture value, they risk running out of resources to sustain the app.
What Are the Four Levels of Value Creation?
We can apply matrix to different aspects of our lives, as value creation operates on multiple levels, including:
- Personal: How individuals contribute their skills and creativity.
- Team: Collaborative efforts that generate higher-order results.
- Organizational: Strategic initiatives that align with the company’s mission.
- Societal: Contributions that address larger societal or global challenges.
Example: A renewable energy company creates value on all levels — employees innovate new solutions (personal), teams improve efficiency (team), the company drives revenue (organizational), and society benefits from reduced carbon emissions (societal).
Real-Life Examples of Value Creation and Capture
Let’s revisit the quadrants in the Value Matrix and explore real-world scenarios, to see how we can recognize who is who and who we want to work with and/or have on our team:
High Value Creation, High Value Capture — The Entrepreneur
Entrepreneurs are the cornerstone of this quadrant. They generate value through innovation and capture it by turning ideas into successful businesses.
Example:
Elon Musk, love him or hate him, exemplifies this quadrant. With companies like Tesla and SpaceX, he’s not just building electric cars or launching rockets — he’s redefining industries. The high value creation is evident in technological breakthroughs, and the high value capture comes from Tesla’s market dominance and SpaceX’s lucrative contracts.
Reflection:
Entrepreneurs don’t have to be CEOs or billionaires. Anyone who drives innovation and directly benefits from the outcomes — whether they’re starting a local business or leading a department project — belongs here.
High Value Creation, Low Value Capture — The Contributor
This is the most selfless quadrant. These are the people who work tirelessly to create immense value but don’t receive proportional recognition or rewards.
Example:
Consider a brilliant scientist working in academia, publishing groundbreaking research without ever receiving significant financial rewards. Or an engineer in a corporation who invents a new product but sees the profits go to shareholders.
Historical Perspective:
Think of Alan Turing, whose work on breaking the Enigma code helped win World War II. His contribution was immense, yet his personal life and career ended in tragedy.
Reflection:
This quadrant often feels unfair. Contributors must evaluate whether their roles align with their values — and sometimes seek environments where their efforts are better recognized.
Low Value Creation, High Value Capture — The Parasite
This quadrant is uncomfortable to discuss, but it exists. Parasites contribute little but extract significant rewards.
Example:
Corporate executives who walk away with massive bonuses after tanking their companies are the poster children for this quadrant. Think of the 2008 financial crisis, where CEOs of failing banks left with golden parachutes while employees and shareholders bore the brunt.
Reflection:
This quadrant erodes trust and organizational health. Leaders must actively identify and mitigate parasitic behavior to maintain fairness and morale.
Low Value Creation, Low Value Capture — The Administrator
Not everyone needs to be an innovator or visionary. Administrators keep the wheels turning, maintaining order but not necessarily driving value.
Example:
Consider bureaucrats in large organizations who process paperwork, follow protocols, and ensure compliance. While necessary, their contributions often lack innovation or direct value creation.
Current Context:
The rise of AI tools like ChatGPT is challenging the role of administrators. Tasks that were once time-consuming and required human oversight are now being automated, shifting this quadrant significantly.
Reflection:
While administrators are essential, organizations should focus on empowering them to add more strategic value where possible.
Value Destruction, High Value Capture — The Regressor (or Thief)
This is the most toxic quadrant. These individuals actively harm organizations while profiting from them.
Example:
Leaders who engage in corporate fraud fit this category. Elizabeth Holmes of Theranos is a prime example. By falsifying claims about her company’s technology, she not only destroyed value but also endangered lives — all while raising billions of dollars for her company. Corrupt politicians would fall also in this category, e.g. Ivo Sanader or Croatia or many other similar around the world.
Reflection:
Organizations must have robust checks and balances to prevent regressors from thriving. The damage they cause often far outweighs their immediate gains.
High Value Creation, Negative Value Capture — The Volunteer
Volunteers are altruists, prioritizing the greater good over personal gain. They create immense value without seeking or receiving direct rewards.
Example:
Healthcare workers during the COVID-19 pandemic. Many risked their lives, worked overtime, and put their families at risk without expecting much in return.
Historical Example:
Mahatma Gandhi, whose leadership in India’s independence movement focused on creating value for millions, yet his personal material gains were negligible.
Reflection:
While inspiring, volunteers often operate in unsustainable environments. Organizations and societies must find ways to recognize and support their contributions, even if they aren’t motivated by financial rewards
The Overlap and Movement Between Quadrants
It’s essential to recognize that individuals can move between quadrants over time. A high-performing entrepreneur might drift into the parasite quadrant if they begin exploiting their success. Similarly, a contributor might evolve into an entrepreneur by learning to capture the value they create.
Why It Matters
Understanding the Value Matrix isn’t just a philosophical exercise — it’s a tool for leadership. If you’re a leader:
- Identify contributors and nurture them. They are the backbone of your organization.
- Watch out for parasites and regressors. They can erode morale and trust.
- Empower administrators. Help them create more value by automating repetitive tasks and focusing on strategy.
- Encourage entrepreneurial thinking. Even in established roles, employees can create and capture value.
- Recognize volunteers. Ensure their sacrifices are acknowledged and appreciated.
How to Inspire and Measure Value Creation
To foster and measure value creation within your team:
- Define Clear Objectives: What does success look like? Is it financial, operational, or societal impact?
- Track Key Metrics: Use KPIs to assess contributions, such as revenue growth, customer satisfaction scores, or innovation outputs.
- Celebrate Wins: Recognize efforts that align with your value creation goals.
Conclusion: What Role Do You Play in the Value Matrix?
The Value Matrix isn’t just a framework for analysis — it’s a call to action. By understanding the dynamics of value creation, capture, and delivery, we can identify where we stand and how to move toward the quadrants that drive meaningful, lasting impact.
So, where do you fit in the Value Matrix? Are you an entrepreneur driving high value creation and capture? A contributor building value for others? Or are you striving to move upward and make a greater impact?
Leadership, business, and life itself demand that we ask these questions regularly. Because understanding your value isn’t just about knowing — it’s about doing.
