Thriving businesses create value, dying businesses strip-mine it

Most leaders talk about value like it’s a buzzword, but here’s the brutal truth: Many companies aren’t creating value — they are strip-mining it. 

• Squeezing customers with hidden fees. 
• Wringing every last drop of productivity out of employees. 
• Obsessing over quarterly harvests without planting anything new.

That’s not strategy — it’s slow suicide. The difference between companies that thrive and companies that hollow out comes down to one simple principle: 

• Create value first, then extract it.

Get the order wrong and you’re just burning through your own future.

Value creation vs. value extraction defined

Let’s start with a couple of definitions.

Value creation is generating something new that benefits others — solving customer problems, improving lives, designing experiences, innovating products and building trust. It’s expansive, leaving customers, the organization and the world stronger than before.

Value extraction is capturing value for the organization — monetizing products, raising prices, increasing efficiency and using customer data. It’s necessary for survival, but without creation, it becomes exploitation.

Think of creation as planting and tending the orchard and extraction as harvesting the fruit. One sustains, while the other consumes. Without the first, the second quickly runs out.

Who drives each?

Employees drive value creation. Their ideas, creativity, empathy and effort fuel the innovations and improvements customers notice. They are the value engine. Without employees who feel trusted and supported, creation stalls.

Customers drive value extraction. Customers give something — money, time, loyalty, data or advocacy — for the value they receive. They allow the organization to extract value, but only if they consistently feel they’re receiving more than they give.

Who benefits from each?

Creation benefits customers first. They get the better product, easier service, empathetic support, smoother experience. Employees also benefit through purpose, trust and seeing their work matter. Over time, society also benefits from the ripple effects.

Extraction benefits the organization and shareholders. Done responsibly, this sustains the business and rewards investment. Done irresponsibly, it erodes trust, burns out employees and drives customers away.

Dig deeper: Driving customer growth with value-based B2B marketing

The leadership trap: Extracting without creating

Too many organizations flip the order. They ask, “How much more can we get from employees and customers?” instead of, “How much more can we create for them?”

That’s why you see:

• Products and subscriptions stuffed with hidden fees.
• Employees treated as expendable instead of creators.
• Productivity squeezed with no investment in growth.
• Customers reduced to data points instead of human beings

It may look good on a quarterly earnings call, but it’s short-term fuel. Over time, the orchard is stripped bare — the harvest comes at the expense of long-term survival.

The sustainable path: Create first, extract second

The companies that endure focus on creation first — extraction follows naturally.

• Apple doesn’t lead with price. It obsesses over design and usability (creation). Customers gladly pay the premium (extraction).
• Southwest Airlines built a culture of employee empowerment and humor. Customers felt the value, loyalty grew and profits followed.
• Patagonia creates value through environmental stewardship. Customers reward them with loyalty far beyond the product itself.

The pattern is clear: when you create more value than you extract, customers line up to let you extract.

Dig deeper: Customer engagement: Moving from value creation to value expansion

Fix the culture, fix the outcomes

Culture determines whether an organization creates or extracts.

• A culture driven by short-term gain extracts first: “How much can we get from customers?”
• A culture driven by long-term value creates first: “How much can we give? How can we make life better for employees and customers?”

Leaders set the tone. Reward only extraction metrics — quarterly earnings, cost savings, upsell targets — and you starve creation. Reward innovation, employee experience and customer impact, and extraction happens on its own.

The test of sustainable leadership

If you’re a leader, ask two uncomfortable questions:

• Are we creating more value than we’re extracting?
• Would our customers and employees say the same?

If the answers make you squirm, take it as a wake-up call. Because you can’t extract your way to greatness, you can only harvest what you’ve planted. 

Focus on building a culture where employees are energized to create and customers feel that creation. When that happens, extraction becomes a natural byproduct — not the obsession.

Dig deeper: Are you focusing on valued customers or volume customers?