The Importance of Articulating Value [Video]
Instead of prioritizing by unfounded estimates, it’s time to review backlogs on a regular basis and have conversations about value and what can be delivered in shorter timeframes.
- A shared understanding across the leadership team, across the organization
- Empowers teams to deprioritize (say “no”) to work that’s not important
In this video, Enterprise Coach Kim Antelo discusses:
- Why traditional planning and estimates are wasted work and can create actual waste
- Ways to articulate value with real-life case studies and examples, including how to handle compliance requests or projects
- Unexpected benefits of prioritization by value such as improving leadership teams
Watch this 8-minute video to learn more about prioritizing work by value. Subscribe to our blog and YouTube to keep updated on the latest news and information related to leadership and organizational agility.
Once you’ve started to identify and prioritize by value, the next step is to take action. Contrary to what you might think, one of the best actions to take would be to start stopping! Learn more in this webinar recording – Start Stopping! A Lean Approach to Portfolio and Budget Management.
According to studies from Pendo and the Standish group, somewhere between 64 and 80% of all of the work your teams are doing is providing little to no value to your organization.
We see this often in companies where leaders have a hard time prioritizing the backlog for their company, their department, or even just their teams.
Patrick Lencioni, best-selling author on teams and leadership said, “If you prioritize everything, you prioritize nothing.” The trick to prioritizing your backlog is being able to articulate the various types of value to help your leadership team determine which projects and initiatives are the most important for your teams to work on.
I remember back in the 2005 to 2011 time frame when every year I had to vie for my projects to make it above that project budget line.
There were lots of spreadsheets and lots of unfounded estimates on how much money we were going to make or save by doing these projects.
Sometimes people did time studies or very complicated maths with Net Present Value or return on investment.
They were all guesses though they were all wrong.
It really didn’t matter because no one ever went back to look to see if that value was ever captured or even if those projects were ever used.
Instead of prioritizing like that, we want to look at prioritizing our backlog on a regular basis and having conversations about the value and what can be delivered in shorter time frames so that we have a shared understanding across the leadership team and the organization and help our people on our teams to say no to the work that is not important.
There are a few common ways of looking at articulating value.
Number one is the easiest direct hard benefits that are going to impact the bottom line.
Number two are things that are going to enable us in the future.
And three is addressing risks or compliance issues, things that will hopefully keep our leaders out of orange jumpsuits.
So the first one hard benefits: “What’s going to impact that bottom line by building this new product feature or thing, we project that we’ll be able to sell X millions of additional widgets resulting in Y profit.”
Now this is easy for people to understand. We have sales people out there telling us that if we build this thing, our clients will come.
We just need to make it when we think about creating Lean budgeting teams or teams that are prioritizing the work.
Hopefully, we’re not just taking the word of our sales people. Hopefully, we’re doing some sort of validation with our customers to see who would really buy these things if we built the proposed thing.
Since Lean budgeting teams meet regularly, we can see if we’re actually capturing the value that the salespeople projected and we can choose to pivot, persevere, or to stop the project or product altogether.
These hard benefits are much easier for us to articulate and track as we more easily see how they will impact the bottom line.
The next two types are softer and more fluffy but still extremely important for us to focus on.
The second item is enablement. In the 2015 timeline, there was a lot of talk about the internet of things IOT. In order to focus on those things, we needed to learn a lot.
We needed to look at new ways of handling technology, building a data lake.
We needed to teach our business partners how to help us prioritize work and clean up the data from disparate systems from all over the organization, pull it into one place and make some sense out of it.
We thought we would be able to get a lot of value out of all of this work, but it was hard to put our fingers on an actual dollar value.
The data lake itself wasn’t the value. It, and the learnings from the whole process, enabled us to leverage data in new ways and to come up with better products.
We were talking about AI and ML well, before chatGPT came along. The companies that were enabling new ways of capturing and leveraging data are now much more able to take advantage of the next big thing.
This is just one example of enablement enablers, which are things that are helping us to prepare and learn so that we can build those big revenue items in the future.
The third value bucket I want to talk about is risk and compliance.Now we could do an hour-long talk just on this particular value bucket.
Since I’ve had the opportunity to work in the credit, health care and aviation space, I’ve had a little bit of experience in compliance and regulations.
Too many times, someone will write up a business case with this big expensive thing that needs to be done all under this justification of “compliance and we have to do it.”
I had a mentor, Chris. As we were working through what needed to be done, she said just because it’s compliance doesn’t mean you get a blank check.
What’s the actual risk here? How often does it come up? What is the least work we could do to meet the rule or regulation? These are all great questions and help us to put this into perspective.
If a regulation changes, that will have a big impact on the majority of your revenue. Maybe we should do that big expensive thing.
But if it’s only going to impact a handful of small clients, then maybe you look them along with a workaround.
Trust me, I wanna keep our leaders out of orange jumpsuits.
But the question is: “What’s the most simple thing that we could do to stay compliant but also not saddle our employees with unreasonable workarounds?”
Often as new regulations come closer to being implemented, the priority will go up just like we’ll look at time sensitivity.
For anything that has a specific date that needs to be released, it could be a revealed date for a product, it could be a conference or a convention, or something like tax day that will drive the specific value.
After looking at these three buckets, you can choose whether or not to swap these out for something that would make more sense for your specific context.
But now that we have value buckets to look at, we can leverage individuals and interactions to talk about how we compare the value across the initiatives.
We’re not just fighting for our own special project, but we’re looking at driving a conversation within the leadership team to prioritize these things and to look at the bang for the buck or value over investment. We see how that value relates to our estimate and the total cost or the total efforts to get these initiatives into the real world, not just the technology costs, Instead of using detailed spreadsheets that are full of guesses, we’re quickly estimating the value and the cost and then we can spit out an easy calculation to tell us what we think the initial pass would be.
After that, we leverage our leaders who understand now a full view of our Book of Business to discuss the priorities and change them as they see fit. Because you don’t want to just rely on a calculation. That’s why we have leaders and these conversations help build better leadership teams. They’re building more empathy and a better understanding of the whole book of business.
For the organization from there, we publish these priorities, we share them across the organization so that everyone knows what is important and what is not.
This helps employees say no when someone distracts them and work comes in, that isn’t on the priority list.
Remember those statistics I shared 64 to 80% of the things your teams are working on will rarely or never be used. Because these leadership teams meet regularly, some once a quarter, some once a week, and everywhere in between, they can pivot when they learn new things about their customer’s wants and needs.
We can stop initiatives that are not returning the value we expected or hoped for.
There are a whole slew of other benefits such as employees understanding the value of the work that they’re bringing, which makes them more connected and improves their happiness, productivity, and turnover.