Introducing the Four Segments

Value statements are much more specific descriptions of the value you have brought or are proposing to bring to your target organization. They are stated in a concise format that allows you to communicate your value in 30 seconds or less. The first segment in your value statement is your performance value (under the number 2 in figure 12-1). Your performance value serves as an introduction to your work and describes how much value you have added or plan to add in performance terms.

The second segment in the financial value statement is the financial value. The components of the financial value part of your value statement are shown under the number 3 in figure 12-1. In the financial value segment, you translate for your audience what the performance improvement means in terms of the financial measures your audience cares most about.

The third segment in the financial value statement is the relevant context. The components of relevant context are shown under the number 4 in figure 12-1. In the relevant context, you draw a connection for your audience from the financial value to how this value supports an urgent and important task that your audience is dealing with today. In this part of the financial value statement, you describe why it is important for your audience to pay attention to you now.

The fourth segment in your financial value statement is your goal. The components of your goal are shown under the number 5 in figure 12-1.

Important ‚  

If your audience accepts and believes you can create value, it will want to know what help you need to ensure the value is indeed created or what else you would need to create even more. Your audience is signaling an acceptance of you as a valued team member who can accomplish one or more significant objectives for the organization. This is a significant reward for your preparation and hard work to communicate value. This kind of acceptance is a fundamental prerequisite to gaining recognition as deserving of a seat at the table as a steward for your organization.

Let ‚ s examine the first three segments of the financial value statement in more depth. The basic components for these segments are shown again in figure 13-1. This time the components are shown in a fill-in-the-blank format, along with a completed example. After you ‚ ve reviewed these segments, you ‚ ll see how to add your goal to your value statements.

Figure 13-1: Three segment layout.

Breaking the ROI codeword depends on being able to tie your value to what is meaningful from your audience ‚ s point of view. When creating a value statement, you ‚ ll use the same financial value chains and the same measures you selected previously for your theme, as your performance measure, and your financial measure in your value statement. You may have already noticed that these financial value chains and their measures are also the ones you used to create your financial imperative scorecard in chapter 9.

Important ‚  

Your value chains, scorecard, and theme now become key tools for you as you create specific value statements customized for your audience.

Performance Value

A financial value statement starts by stating the performance improvement that is planned or has been made for the organization. This is the performance value segment of the financial value statement. The performance value segment starts by identifying a specific period of time in which the value was or will be obtained.

When communicating value, it makes a big difference if the benefits were obtained in six weeks or six months. Including a period of time is an important part of identifying the rate of change or speed in which value is being brought to the organization. This information is particularly important when demonstrating how you are optimizing value to your Senior executives. In the example in figure 13-1, the period of time is six months. Where would you get a figure such as six months? This is the same period that you selected for a specific value add column on the financial imperatives scorecard created in chapter 9.

Next comes the name of the intervention that has (or will be) implemented, the direction verb, the performance measure, and the amount of change in the performance measure. The intervention is the same one that you chose to focus on in step 4 of the financial value process. In figure 13-1, the sample intervention is a stress management program.

In the last chapter, the performance measure was defined as being a smaller or more specific measure from a profit, position, or cash financial value chain. The chosen performance measure can be any of the measures on the financial value chain with the exception of the Senior level measure. This is because the improvement in the performance measure must be contrasted with an improvement in a larger, broader financial measure. It ‚ s hard to contrast the top measure with itself! The direction is simply a verb that describes an up or down movement for the improvement. In this example, the stress management program decreased nursing turnover .

Important ‚  

You ‚ ll notice in the example that the direction verb and performance measure were stated in a slightly different order than the template displayed above them. Although the segments and all of the components of each segment should be kept as part of the statement, the order of the components within each segment can be moved so that your value statement sounds natural to you.

Examples of direction verbs are reducing, increasing, lowering, or raising. Depending on the performance measure selected, the amount of improvement can be expressed as a percentage of change in time, a count, or a gross or net dollar amount. The amount of performance change will be drawn directly from the benefits that you have been tracking for your value add on your financial imperatives scorecard. In the example here, the amount of decrease in nursing turnover was 20 percent.

Financial Value

The financial value segment is where a financial value statement becomes significantly different from many WLP claims to value. Many statements frequently stop right after the performance measure and the amount of change. Perhaps they don ‚ t even include an amount of change. With such a statement the WLP professional is hoping that the audience will be able to translate what the improvement in a performance measure means.

Unfortunately, the audience won ‚ t make this leap to financial value. You must translate performance value into financial terms if you want the audience to understand the value your interventions bring to the organization. That is why the next piece of the financial value statement is always a form of the term thereby. You can use the word thereby or some variation, such as was used in the example (figure 13-1). No matter how it is done, you must be sure that the next segment of your value statement makes the connection between the language of performance and the language of finance.

After the statement of financial value (thereby) comes another direction verb, the financial measure that was impacted, and the amount of change that the performance improvement translated into. Because the basis of the financial value statement is a connection between performance and finance, the financial measure cannot be the same as the performance measure. The financial measure must be a higher-level or broader measure than the performance measure. As long as the financial measure is higher than the selected performance measure, the financial measure can be chosen from any of the four levels of the financial value chain with the exception of the Individual or most detailed performance measure.

In the example in figure 13-1, the direction of the financial measure(s) increased. Many times in a value statement, you ‚ ll then simply state a single financial measure that changed as a result of the change in performance.

Important ‚  

If you have done the work to create your financial value chains based on multiple financial statements, you can sometimes group two financial measures together to pack a little more punch into your value statement. In the example here, two financial measures were grouped together: the operating profit margin and free cash. The amount of change was $250,000. A quarter of a million dollars is likely to be large enough to catch people ‚ s attention and indicate value, but the value statement doesn ‚ t stop there.

Relevant Context (Which Means)

Following the financial value or thereby segment is one more connection that it is your job to make. That is the connection from the general translation of performance and finance to the urgent and important of today. That connection is expressed by using the phrase or some variation of the phrase which means.

Important ‚  

Many times when a WLP professional is trying to communicate value, he or she can be frustrated when their audience says, ‚“I know you ‚ re important, but I can ‚ t talk to you right now. I have a business to run! ‚½ Organizational leaders learn very early to filter out any communication that is not immediately relevant to the urgent and important tasks of today. In chapter 11 , you learned about the three lifecycles of a business based on fiscal, new product, and seasonal sales patterns and how these lifecycles drive your audience into a predictable pattern of what is urgent and important for them to accomplish. Now it is time to use your quarterly context plan to connect your value to the most important tasks that your audience is dealing with.

In the layout in figure 13-1, the last two components listed are the intervention and the relevant benefit or impact. Depending on the flow of conversation or what feels natural, you may repeat the name of the intervention or omit it from your value statement at this point. You can see that in the example shown in figure 13-1, the name of the intervention was omitted, and the statement flowed directly into the relevant benefit or impact, the connection to context was made by pointing out that the extra $250,000 in savings made it possible to fund several staff member ‚ s salaries for the next year. For all we know, perhaps one of those salaries was the WLP manager ‚ s! Or, perhaps this statement was made as the WLP manager was trying to get more of his or her manager ‚ s attention focused on retaining key parts of the WLP budget for next year.

The Goal

The final segment in your financial value statement is your goal.

Goals: Why Bother? Having a goal is critical to your success for several reasons.

First, your audience expects to hear a goal articulated . To an executive, communication without purpose is noise. In the Information Age, people have no time. If you are going to take the time of a Senior manager, you must be prepared to explain what you want him or her to do next to help you continue to create value. Even if you just want something as simple as some recognition for a job well done because it would motivate you or your staff to keep producing more, you need to tell your audience that. The audience won ‚ t know what you need until you say so.

The second reason you must state a goal is because three pieces of information have not yet been included in your financial value statement. This is information regarding penetration, sustainability, and speed ‚ the optimization information that your Senior managers will be looking for from your value statements. Some information on rate of speed was communicated in your period of time as the first component of your performance value segment. But, because optimization information is really answering questions about the future (for example, how many more need to participate in the intervention, what it takes to sustain the benefits from the intervention for longer periods, how much faster you can gain the benefits in another iteration) then optimization information is really about your future goals. You can draw your Senior executives ‚ attention to how you will bring even more value to the organization through your goals or, in other words, you can draw their attention to how you will optimize their value.

Third, goals build your own confidence and influence. Don ‚ t overlook the personal benefits of goal setting. Setting a goal gives you motivation to make sure your value communication pays off. All people need to feel that the effort they put forth is meaningful and worthwhile. Clarifying what you want for your efforts and then asking for it is a good way to build your own confidence and self-esteem.

Important ‚  

If you want a seat at the executive table, you must be able to see yourself as an equal to the others who are there. One of the keys to success is having the motivation and the self-confidence to go after what is important to you as a steward for your people. That gives you a much better footing with your peers.

Pay attention to the basic interactions that build self-confidence. Having the ability to successfully influence others builds the foundation for the belief that one can set and achieve goals. One of the primary ways to influence an audience is to ask the audience to make a commitment, even a small one. Robert Cialdini (1998) describes the top six ways that people influence each other. Commitment and consistency, according to Cialdini, constitute one of the ways to build influence. Once people have committed to an idea, a principle, or some type of support, they do not like to contradict themselves and are likely to commit to it again.

An example of commitment to a principle might be getting someone to agree to the statement that ‚“It is important to show that we support learning for our people. ‚½ Once someone has committed in a small way, he or she will often be more open to a slightly larger commitment later. A slightly larger commitment might be for an executive to write a memo supporting a particular learning initiative. A slightly larger commitment after that might be to give extra funds to expand the initiative. In other words, the less frequently you set a goal and ask for a commitment, the less influence you have. Connecting what you do to financial benefits that create goodness for the organization make it easier for you to gain commitment in the first place.

One caution: Be careful not to select goals or ask for commitments that cause your audience to give you a resounding ‚“No! ‚½ Once people have committed to that position, they will want to stay consistent within it as well.

Goal Layout. Let ‚ s continue looking at the layout of a value statement by examining the final segment: your goal. Figure 13-2 consists of a blank layout for your goal and then a completed example.

Figure 13-2: Your goal layout.

In your goal, you should first describe what you want and then explain why you want it. What you want and why will change for each member of your audience according to what he or she can provide to help you toward your goal. The last part of your goal is to start a specific period of time and then the next step that you want your audience to take to help you with your goal.

The example in figure 13-2 continues with the value statement that was introduced in figure 13-1. The WLP manager for an organization wants to keep the same size of budget going into the next fiscal year so that he and his staff can continue the excellent work that their department is doing. The WLP manager wants his boss to review a proposal that will go to the CFO to increase the WLP budget allocations for next year.