Let s Review: | Quick! Show Me Your Value

Let ‚ s Review:

This chapter covered step 6 of the financial value process.
Financial imperative scorecards provide a concise , single place to consistently track the amount of value you are creating from your interventions. The discipline of creating and updating your scorecards is critical to your long- term ability to keep the perceptions of your value high.
Rule #1 of the scorecard is to never present costs without drawing a connection to the benefits that those costs have brought to the organization.
Rule #2 is to keep your scorecard up-to-date.
Rule #3 is to capture the data right away, as it is happening.
Rule #4 is to be ethical by tracking the obvious and being consistent in counting costs.
Rule #5 is to be conservative.
Your scorecards must have a consistent basis or definition for how you count your numbers so that they can always be compared to each other.
Your benefits are taken directly from your financial value chains.
Tracking benefits reliably can be time consuming, but it is critical to never present cost data without offsetting benefit data.
Scorecards must track costs as well as benefits. Costs need to use the same definition for counting numbers so that they can be subtracted from or divided into benefit numbers.
Value in your scorecard can be summarized in terms of total net benefit, as benefit-to-cost ratios, or as an ROI percentage. Be cautious when using benefit-to-cost ratios and ROI percentages when communicating value. Big ratios and ROIs can be generated from very small numbers. If your audience believes this is what has happened , you ‚ ll lose your credibility.
Value is created in terms of effectiveness and efficiency. The more effectiveness you can communicate, the higher you can keep the perception of your value into the conscious states for your audience.
There are creative and proven ways to research realistic benefit and cost numbers if you have never offered a particular type of intervention before or if your participants come from widely varying parts of your organization.

In the next chapter, you ‚ ll examine the next steps in continuous value management. The financial value process hinges on the assumption that the intervention has eventually taken place. Once your intervention has occurred, you must be able to validate the numbers you claim on your scorecard. Validation requires some form of evaluation. Different types of audiences require information from different types of evaluation methods . You must ensure that you are gathering the right types of evaluation data to match the needs of each level of your audience.