One of the issues of Value model development is the fact that it takes too long to develop consensus. Different stakeholders have different agendas with different perspectives on value and cost benefits. Also, risks are not easily understood and accounted for in the value equation.
Given the above, it is no wonder that business stakeholders dread the notion of business case development. Even when done, there is usually no overwhelming acceptance just because of a lack of agreement on its components. All of this makes the whole concept of value modeling quite challenging.
Given the above, it is no wonder that business stakeholders dread the notion of business case development. Even when done, there is usually no overwhelming acceptance just because of a lack of agreement on its components. All of this makes the whole concept of value modeling quite challenging.
For this to succeed, we have to keep two fundamental assumptions in mind:
1. Think of the value modeling exercise as an inverted funnel. Initially, you want to develop a high-level (almost back of the napkin) value model. To do this, it is sufficient to identify the top benefits, costs, and risks. You don’t have to have all of the assumptions and benchmarks right away but a directional notion is sufficient initially.
2. Iterate the initial value model framework and fine-tune it with a similar group of people. This is necessary to weed out the noise from some of the “squeakier” groups. This is when you start to validate some of the assumptions, calibrate some of the calculations to get credible value propositions.
That’s where the exercises based on human-centered design thinking come in. Step 1 above is perfect to get a large group of people to come together and quickly agree on what are the most important benefits, costs, and risks that are salient for the value development. Most of the design thinking tools today have good “votocracy” features where participants can anonymously (and quickly) vote on the top benefits, costs, and risks without necessarily going into meandering discussions that lead nowhere. I agree that we may not have ALL the benefits identified but certainly, ones where the group, as a whole, feels very strongly about.
In my next post, I will discuss a specific recipe for a design-thinking based value modeling workshop.
