How to Build a Value Culture

In the world of business, understanding value is crucial for making effective decisions and prioritizing projects. By focusing on value, organizations can maximize the return on their technology investments and create a culture where employees drive value. Here are some key principles for building a value culture:

Focus on Operational Results

Value in business is about achieving operational results. This can include increasing productivity, reducing costs, or increasing profit. All decisions should aim to drive these outcomes.

Keep It Simple

There are typically no more than five key benefits in a decision. Any more than that is unnecessary. Focus on the top one or two benefits that strongly justify the project.

Consider Benefits on a Scale

Benefits should be evaluated on a scale of strong to weak. Strong benefits include cutting costs or improving productivity. Stories or weak benefits should be discarded.

Calculate ROI and Payback Period

Calculate ROI by dividing the average annual net benefits during the first three years by the initial investment. Also, calculate the payback period, which indicates how long it will take for the project to cover its costs. Payback period is often more important than ROI.

Simplify Your Business Case

Keep your business case concise, typically no more than two pages. Include the problem, proposal, top two benefits, payback period, and ROI. Ignore complex calculations like depreciation and taxes, as they don’t significantly improve decision-making.

Focus on Rapid Return

Emphasize projects that have a short payback period. This encourages a focus on quick results and can help drive value more effectively.

Building a value culture in your organization can transform your approach to technology investments and decision-making. By prioritizing operational results and focusing on the most significant benefits, your organization can thrive in today’s competitive landscape.