Value is in the Eye of the Beholder

The sponsor is constantly looking to endow the initiative and gain acceptance from other stakeholders. As part of the value “pitch”, she will need to not only present the factual information but also appeal to the individual perspectives of the key stakeholders. The factual information comes from the value measurement exercise. Appealing to the stakeholders’ unique perspectives requires additional information on their areas of interest.

Value Measurement requires:

  • Identification of value KPIs (aka key value measurements) for each of the benefit buckets
  • Identification of cost KPIs (aka key cost measurements) for each of the cost buckets
  • Identification of risk probabilities/scenarios and account for them in the NPV calculation
  • Making adjustments for program/project adoption

It is for the most part, an objective exercise. While the main benefit areas and costs are generally agreed upon by all of the participants, there may be discussions on the benchmarks to use in the calculation of the KPIs, especially the value KPIs. The rsentest of the value measurement is related to calculation of NPV, IRR, payback period, etc.

On the other hand, Value Orientation is more about reading the room. Recall my earlier blog post about Value Personas. Depending on whether you are presenting to a bean counter, driver, visionary or dreamer, your talk track would change.

  • A Bean Counter would be interested in all of the benchmark metrics, the assumptions made in the value calculations, etc. They might even challenge some of the metrics themselves.
  • A Driver is more focused on the reality of the exercise as it applies to their operations. Is the project feasible? Are the right KPIs being used? Is there a better way of measuring some of the metrics, etc.? Usually, if it passes muster by both the Bean Counter and the Driver personas, it is ready for CFO presentation.
  • If there is a reasonable projected potential value of the initiative, the Visionary is satisfied. They are looking at the holistic outlook and are not too interested in the finer details.
  • The Dreamer does not care about NPV, IRR, etc. but they are attracted by broad value statements. Benefit areas such as community health, sustainable operations, employee happiness, etc. are candidate topics for discussion.