Learn how to articulate the business impact of your work and establish a roadmap with quantifiable metrics.
Value realization is the buzzword of the moment, especially at the C-suite level, but do you know what it really means?
Value realization is the ability to quantify and track the business value delivered through a program, project, or initiative.
In the context of a program or project initiative, value is a benefit or positive outcome that’s generated. Far too often teams are focused on delivering work, yet the focus should be on delivering business value.
This is how to build a Value Realization Framework.
First, understand what value means for the stakeholders receiving the work
Only once you’ve understood what outcome your stakeholders are looking to achieve, you’ll be better able to direct your own activities and efforts to maximize value that matters. An easy way to ensure this happens is laddering up to three business outcomes that are always important at executive level (ranked according to importance):
- Increased revenue:
- Increase sales, expansion, and growth
- Protect customer retention and loyalty
- Decrease costs:
- Improve margins, net profit
- Increase operational efficiency and accuracy
- Minimize risk:
- Regulatory or reputational risks
- Adapt strategy to internal and external factors
If you’re able to draw a line between your deliverables and their impact on these three business outcomes, you can prove you’re adding real value to the business.
Convey how your deliverables map regarding revenue, costs, and risks
Connecting the dots between deliverables and outcomes is not always obvious or easy to articulate. To achieve this, there’s the Value Realization Framework, which connects work with the value a program delivers.
This is what you need to build a Value Realization Framework:
- Identify stakeholders and business value metrics that measure their success. Focus on KPIs that are measurable.
- Create the overarching headline or North Star objective for your program.
- Define the program theme pillars or granular objectives/metrics to impact.
- Populate intermediary success measures that help connect program-level metrics to the North Star.
- Fill in specific activity details for each program pillar.
- Make it a stand-alone document: summarize the program and add relevant details or context.
- Revisit the framework often to ensure alignment.
This framework can be flexed into accommodating different goals and objectives. First, showcase how the program impacts executive business outcomes. The Value Benefits Map links the C-level priorities with more granular goals and outcomes. The top-down view shows how metrics and outcomes lather into one another.
The middle of the framework shows program themes, priorities and activities (day-to-day). All the specific work and deliverables are geared towards the pillars of work that lead to the benefits and outcomes that matter.
Highlight one or two success measures and metrics that define program outcomes for each pillar.
Lastly, summarize the program in easy to understand language. Add relevant details and contact information to ensure if the one-pager is going to be forwarded to someone in leadership, they’ll have an easy time interpreting what they’re reading.
Documenting everything ensures that all stakeholders have the same understanding of your program. The Value Realization Framework is also likely to generate important discussions, such as having the right focus across the company and why certain areas are being neglected.
Once the program is up and running, revisit it ideally every other week or at least quarterly. Look at the program pillars and ask, are they still the right ones, have you made any progress, can you benchmark progress in any of these areas, are there any key wins to highlight, and so on.
Value realization summary and roadmap: start simple and progressively elaborate
Even working through the first few steps of the Value Realization Framework will help you think objectively about value and ROI.
With a few modifications, you can leverage the same template to articulate a retrospective summary of wins or a future roadmap.
For a retrospective summary:
- Focus on looking-back at successes and key learnings
- Include quantified benchmarks and ROI
- Highlight impacts to showcase value realized and spark discussion on strategic planning
For a future-looking roadmap:
- Focus on the work and outcomes to be delivered
- Include planned or future scope and metrics to measure
- Best used as a tool to report in-flight progress and spark discussion on upcoming items
Measuring value realization: Organize, simplify, and clearly articulate your program
If you’re not able to clearly structure your program using the Value Realization Framework, it’s likely there’s confusion at some level. This could mean not everybody in your organization is on the same page or agrees on the value the program delivers.
The Value Realization Framework relies heavily on structuring a program around value delivery. Therefore, the focus should be on outcomes and metrics. For the framework to be successful it’s key to identify the outcomes and wins the stakeholders are seeking. Here are some tips to achieve this:
- Start with broader outcome themes (for example, design delightful products or improve customer journey experiences)
- Begin your outcomes with action-verbs (increase, decrease, drive, minimize)
- Get more specific with metrics. Specificity helps to focus your efforts and removes ambiguity
- Ensure metrics are measurable. Identify metrics that will objectively measure that you’re moving in the right direction. Once you get your hands on data, develop benchmarks to track improvements and uncover correlations between program activities and valuable outcomes.
Examples:
To measure delightful products: Increase in user satisfaction, adoption, and/or usage; decrease in product returns, customer churn, and/or customer acquisition cost.
To measure customer journey experiences: Increase in net product score (NPS), customer retention and/or recurring purchases. Decrease in cost to serve and/or customer complaints.
When thinking about successful metrics, a handy rule of thumb is asking, this time next year, how can we objectively demonstrate we’re in a better position? Determining what success looks like and identifying the appropriate metrics will help align program activities to deliver value.
Get access to the on-demand sessions of the Alida Activate 2023 North America here.
