Tough Questions 2: What Is the Value of the Intervention for Your Organization?

The second difficult question is: What is the value of the intervention for your organization?

So far, my potential clients rarely were able to come up spontaneously with a number or, at least, some way to getting there. The next question comes naturally: if we do not know the value of the intervention, how would we know this is a profitable undertaking? Or, is it worth caring about it at all? Many would argue that for interventions like skill development is rather difficult to pinpoint exactly return on investment! Obviously, it is not easy but also it is not impossible either. At least if one answered properly at “Tough Questions 1”.

Answers may involve:

• Increased effectiveness by diminishing failures in various activities such as sales call or presentations (and consequently reduced costs by…) ($)
• Increased retention of good customers by x% ($)
• Increased acquisition of new clients ($)
• Reduced costs in different segments ($)
• More time to do other stuff (cumulating in making available more FTEs, or, more time & focus on value activities for highly paid staff) ($)
• And so on…

Adding up all the above values and multiplying by a reasonable period of time one may get a fair value of the intervention. Then the only things to care about are: it should be profitable and it should be precisely executed.

Many find it difficult to commit for such calculation because they need to take the responsibility for the assumption (i.e. if sales people will display this skill their close rate will grow to x%). But this is why management is there.

Making an effort to answer this question (without fooling yourself) can help significantly in deciding whether an intervention is appropriate or not, to select between the options and to keep expenses (investments) under control.