Organizations’ Hierarchy of Needs

An organization’s journey within an economic zone resembles Maslow’s hierarchy of needs pyramid. It is sequential in nature, meaning, there are basic needs that must be satisfied prior to striving for the next level. An organizations’ journey within an economic zone’s hierarchy of needs are:

  • Existence
  • Value Creation
  • Value Capture
  • Leadership

Existence stage is where the organization is setting up a business. It encompasses all transactions dealing with rules and regulations. This can include applying and renewing the organization’s business license. And other transactions required for the company to stay “Active”. “Active” is a term used by economic zones to denote a functioning company.

Value creation is the stage where organizations are building the platform to create the product and services to sell, building the value proposition. Example of building the value proposition includes:

  • Hiring staff
  • Building the factory
  • Furnishing the office

There is a clear distinction between existence stage and value creation stage. The existence stage is dealing with the rules and regulations of an authority while value creation stage is dealing with other partners and service providers. The economic zone may play both roles at certain times such as a regulator of a company formation and a landlord of offices or warehouses.

Value capture is the stage post creating the value proposition. The organization has products or services to offer to the market. The act of finding, connecting, and selling their products and services to prospects is the value capture stage. Considering it from the value creation and value capture language, it’s the stage where companies are prospecting and capturing value. It’s where connecting and dealing with paying customers. Needless to say, the value creation stage precedes the value capture.

Leadership is the stage when a company has reached a stable stage, is financially sustainable and has a proven business model. The company’s customers have validated the business and the company is looked upon as a model example among its peers.