process everywhere

In some organizations there is simply no emphasis on calculating the reward for actions taken. Energy is focused solely on “doing more with less” and staying within budgets.

While doing more with less is a means to create business value, it is not effective unless the end effects of the actions taken are also considered. In many cases cost cutting measures lead to reduced quality, which then affects profits, and business value is destroyed.

In other “no brainer” cases, employees simply perceive the value gains as incalculable. Customer facing departments like product design will argue that it’s impossible to predict the effects that certain features or product offerings will have on customer demand and at what price to offer the item or service.

Departments several steps removed from the customer that instead serve internal business needs will argue that the ambiguity is more intense. In many cases it may be hard to calculate the benefits of increased employee satisfaction or improved communication.  This is no excuse to skip the step of justifying decisions. In these situations it is beneficial to build a model that substitutes assumptions for the missing data. The construction of these models preserves the capability to make informed decisions. Rather than debating an end dollar figure given for the delivered business value, the emphasis is shifted to the validity of the model and the assumptions which it is based.

Buy in from other decision makers comes from obtaining their agreement on these assumptions. Rather than pulling these assumptions out of thin air, they should be developed using comparable scenarios from the past data or experience. As the project goes on and uncertainty shifts to known information, the model becomes more accurate and the picture of the business value that is produced or destroyed becomes concrete.