I interviewed David Meggitt who discussed VES: A New Tool for Cultivating Innovation in Supply Chains.

Tell us a bit about yourself

Hello Dustin. It’s great to speak to you again. The last time was almost 3 1/2 years ago in May, 2011 and a lot of exciting things have happened since then. I gather that today you are in China, which is the really great, so it's greetings from us all to everyone in that country. Earlier this year my son Ryder, with others, accompanied, the leader of the Scottish Parliament, on a trade mission to China representing the construction industry and its innovative developments, and they had a great reception there. It's really about innovation that I want to focus on today.

In almost 50 years of working life I have seen huge changes in the way work is conducted using new methods and techniques with the Internet dominating the way we can now collaborate across boundaries. But we also need the right people around us with vision, an open mind, courage and drive amidst adversity to make things happen.  So the ideas I'm going to put over today are being co-created and developed with my business partner Christie Sarri, who fits that description. She is an experienced chartered civil engineer like me, but with an MBA, to match my own management consultancy experience and exposure to innovation over the years in many sectors and many disciplines.

We practice as Meggitt Bird LLP in co-creating value projects for change growth and success and in essence we act as facilitators for change, whether clients want incremental or more disruptive adaptation.

We also appreciate that everyone is in a supply chain – we have our own customers who have their customers, and suppliers who have their suppliers. We are enmeshed together in a swirling soup of human activity, it seems.

With this in mind, it is our sense that currently we are doing things wrongly at every level.

What are we doing wrong?

I always ask the question: are we envisioning situations in a sufficiently dynamic and big picture (or holistic) way?

Let’s look at an example of where things went really wrong. The economists did not predict the financial and economic crisis in 2008 that has gripped us, and even if it had been by some, wilful blindness and a sense of powerlessness prevented appropriate avoiding action. Let us simply say that the economists did not do their job well, caused by examining static pictures of historical events. We can expand on this in the comments below if needed. Suffice to say now, if we use the same tools as before we will have the same imperfections. So, how can we improve our foresight?

Let’s look at how predictions of structural behaviour have improved dramatically in the construction industry. 100 years ago engineers designed structures by hand with limited theory and low buildings were the result. Now, with new tools we can design and construct structures of almost limitless scope, soaring to great heights and spanning across great lengths. Our capabilities have soared, matched by a new confidence in tackling such challenges. The new tools show movement and change in the behaviour of structures - they are dynamic analysis tools, not static ones.

So what if we assume that we adopted 21st-century leadership and management approaches that were dynamic and not static – that showed interactions that really occur in work place activity and not just formal process and structure.  What leaps in performance would then be within our grasp? What co-creativity, innovation and collaboration could be cultivated? That is why I would like the rest of the interview to feature VES, a value exchange system approach to directing and managing enterprise.

Why is a value exchange system different?

No tools exist that take into consideration the real interactions that take place between people in whatever roles they are playing. If it is claimed they do exist they are static tools based on management principles developed in the 19 century. We rapidly need an update if we are to tackle the global interacting challenges that we are now faced with. The findings of the Chartered Management Institute in the UK for example has highlighted real failures in current management practice and the need for reform in business school curricula.

Traditional thinking would have us regard supply chains as a  method for delivering specified items to clients. But we know supplt chains comprise relatively small to medium sized enterprises with new ideas that need the support of the goliaths of their industry (and Government)  and a collaborative environment in which they can thrive in order to contribute innovative solutions to the ultimate client.  So, what the value exchange system allows us to do is to focus on the really important essentials in a straightforward way. It focuses on what needs to be done without getting clogged up with detail – an ideal precursur to the Business Model Canvas for example. VES draws on the wisdom of economics which tells us that the exchange is the fundamental basis of an economy and it draws on the wisdom of the late Peter Drucker who constantly emphasised that it was the contribution that individuals made in an organisation that really mattered in achieving desired results.

Also consider a conventional position or job description: it will contain roles and responsibilities. If we now combine these components together – roles, and the contribution of deliverables via the exchanges which contain them, we can create a picture of how an organisation ticks and how it interacts dynamically with its collaborators and entire business ecosystem. In other words, its business model. And with this new perspective we can discover new interactions and relationships we would otherwise not see, and do things we would otherwise believe to be beyond us. And we can do that whether we are considering value relationships in a small team, a large project, an entire business, a Government department, a region or interregional collaborations and so on.

An indication of this scope is contained in our co-authored technical paper we wrote in 2012 for the Institution of Civil Engineers’ flagship journal “Civil Engineering” and I'll provide a link to that in the comments section below.

How is VES used?

We find that VES can be applied to any area in which human beings conduct exchanges – which is any business activity. So there is huge scope, particularly to help identify and formulate new projects and develop business models. Consequently, we are creating what we call Advisory Information Products to guide all those who are interested in using VES…it’s a commercial venture so there will be a mix of free and paid for products which will be available on the Internet. I can provide a link in the comments below.

We can also provide links to the many groups we have been involved with covering such topics as project management, value chain management, construction supply chain management, ethics, governance and risk management and so on, whose deliberations have helped us validate VES for its general applicability.

As far as Christie is concerned in the Region of Crete in Greece, within the Agas Group in which she is also a partner they are innovating in creating new technical products which require new supply chains within an evolving business ecosystem of collaborators and influencers. We are also taking the first steps to achieve inter-regional collaboration. So VES is being applied there right now.

What results can we expect from VES?

There is a long history of results over the last 10 years with what is described in the literature as a value network approach and I can provide a link to a list of these for people to peruse at their leisure. For the future, by using the value exchange system, which is a reformulation of this, you will be able to incorporate seemlessly ideas put forward by Don Tapscott on business webs, Clayton Christensen and Henry Chesbrough on innovation to name but three pioneers.

We think it is a very exciting time that we and collaborators will be enjoying in the near future as we introduce techniques that are fit for purpose for use in the Internet enabled 21st century, where mass collaboration and manufacturing is now more the norm and we certainly anticipate that many around the world will be interested enough to join us in that.

It’s as exciting, I think, as the first introduction of a pencil and paper!




About David Meggitt



David Meggitt


Civil Engineer and management consultant, identifying and formulating projects for change, growth and success.

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