How do you (and your organization) define value?

Last week’s CEO published this article online at Forbes: Discover and Deliver Value With a Wide-Angle Business Lens

A key point in this article is:
“A major reason digital transformations fail is that business leaders don’t know what value is, as true value is defined by the customer, and what they’re willing to pay for.”

How do you define value in your organization?

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Great question! I don’t think many people really dwell too long on that, they just jump to “released on time” or maybe at the end of the year talk about a generic X% growth on the bottom line. I like to think of adding value to the customer as the key thing…that can be measured a few ways (none of which are completely awesome)…star rating, surveys, look at usage patterns to see if they’re using a feature or take rate on a new product…a handful of ways you can start to infer if you’re really helping customers in their daily lives. I’d love to hear some other ways value is measured! It gets tricky when you’re working on features that don’t directly face the customer but instead enable a better architecture, refactor existing code or create the potential for new capabilities. These have loads of value but often get swept under the rug in favor or customer facing features…to that end I like the idea behind SAFe’s WSJF to determine value as a composite of a variety of variables. This is a topic that deserves some focus for sure!

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How customers perceive value in the digital world changes continuously. Businesses that understand more about their customer needs and wants can redefine which products and services to offer and how much they should cost. In addition, each customer’s perception of value may be different. Digital giants like Google, Amazon, Apple, Netflix continuously view their products/services through their customer’s eyes, via interactions across digital channels, comments, good or bad recommendations. With AI and machine learning they can even predict what future demands and value will be for a given product or a service, creating a competitive advantage. To compete in this new customer-defined world, brick-and-mortar incumbents must rethink the entire value chain and redefine their business models.

I love Mark Schwartz’s books on this topic (check out his offerings from It Revolution publishing), where he describes business value as hypotheses of outcomes and success that are ever changing and mostly not correct. The answer in my mind is that business value is not one silver bullet answer but a group of hypotheses that will help your business and it’s consumers succeed. And it changes…

This is one of my favorite ways to describe a feature or chunk of value, but find it really gives some folks a rash, I think because it doesn’t have the pretense of certainty that business often traffics in (think ‘hard numbers’ like cost, profit, loss). The other related truth is that we also don’t know whether we can create these pieces of value within the right time or cost: our estimates and timeframes are hypotheses as well! Note that agile techniques like short timeboxes and thin vertical slices are tools for coping with this uncertainty, and limiting the risk of it to manageable levels.