Digging for Gold

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There are times when we need to dig deeper to find nuggets of gold. Estimating cost and return helps determine whether or not to invest in a new initiative. Searching for value beyond obvious revenue and expense opportunities can solidify your investment and dramatically enrich the outcome.

Most initiatives arise from the need to solve a specific problem or create a specific capability. A Value Review can quickly establish a better outcome. I recently completed an executive session which provides a great example of how quickly this can be achieved.

My client's team was seeking to meet (or beat) a 3-year payback goal set by the CFO. We had compiled a textbook ROI that compared estimated project costs with multi-year expense savings. The return was positive but borderline. While there was a case to invest, the outcome would hinge on a few unknowns. If any of these did not pan out, the initiative would take more than 3 years to pay back. The team did not feel comfortable presenting a business case that might be judged as a failure. They believed in the work, but wanted more evidence of the benefits.

We decided to assess different types of value. Here’s the list that we came up with:

  1. Brand Reputation : Always tough to measure, but the work was in an area that the market cared about, and the Marketing team was excited about the PR opportunities.
  2. Customer Satisfaction : We knew that six of the top ten customers had expressed a desire for the work we were planning. Sales felt that this could generate a handful of strong referrals.
  3. Employee Engagement : The initiative would address issues with a process so onerous that HR felt it was was contributing to high burnout and staff turnover. If a much easier workflow could reduce the turnover by a few percentage points, we could target another measurable benefit.
  4. Infrastructure : IT felt the solution could be designed in a way that would streamline future changes. This, in turn, would reduce the cost of a number of ongoing activities. Another long term gain for operational efficiency.
  5. Change Management : the team had been looking for a chance to apply some new change management techniques. This initiative provided a great opportunity to invest in some outside coaching to improve the organization’s agility. Although this was a softer benefit, we added it to the list.
  6. Compliance : we thought long and hard on this one. While we couldn’t see any advances for compliance, we convinced ourselves that the work would be completely onside. That’s just as important.

Finally, the team extended the plan to address these benefits at minimal cost by adding a PR plan, customer referral follow up, and change management coaching.

As we closed out, the debrief highlighted the value of this exercise:

  1. A borderline ROI was enriched by digging deeper for benefits.
  2. Benefits Realization would be monitored after Go Live to ensure that all goals were realized.

The team felt better about moving ahead and the initiative was approved.

What Are Your Values?

  1. Consider how any of these categories of value could apply to your business
  2. What additional categories could you add to the list? Can they yield measurable benefits?

Please - let me know what you come up with. If there are additional types of value that you would like to measure, contact me at graham@primeFusion.ca and we can share ideas.