Using Value to Sell Improvement Initiatives

This article first appeared in Service Management Journey.

In tougher economic times, many organizations will start to evaluate all the components that make up their operational model. In other words, they look for value. A challenge for those delivering services will be to illustrate not only the current value that they provide but also future state value that can be added with some type of improvement initiative.

When speaking about business value, we must first recognize that this term can be interpreted in slightly different ways. For the purpose of this discussion we are speaking to the ability for an organization to realize its business objectives.

So without oversimplifying things if we were to say, “Our organization wants to make money and loads of it,” it would make good sense that everyone would be on the same page to make this goal happen.

It’s in this assumption where everything starts to slide off the tracks. While it may be well understood that we want our organizations to make loads of money, we may not have all the pieces in place to ensure that we have not only lined up the services to do so, but also supported the services to achieve this goal. In simplest terms the service provider needs to know who, what, when, why, where, and how.

In my experience, we think we know how this is done until we start to take a really close look. This is where many of these initiatives can fail if we aren’t prepared to put forward the focus and effort to a continual service improvement initiative.

First, we need to establish iterative goals that support the business objective we are looking to improve in the first place. Keep in mind that we are not going to get this right the first time and we may come across challenges along the way. Being prepared for this will ensure that we won’t face any surprises and will also prepare us to be agile enough to adjust to any issues we face in this improvement journey.

In this example we are talking about value in economic (dollars and cents) terms, so to account for the value from a financial perspective should not be a giant leap. Knowing what we want to accomplish and outlining the activities, we should be able to get a good idea of what the service will cost to deliver to the organization. From here we can look at what will make sense in driving out value based on a return-on-investment approach. With the “how we support service” as a foundation, the next step will be to address what the costs of delivering services are.

Small improvements can add up. Let’s look at an example of how incidents would impact the value of a service:

Suppose we looked at the current state and saw that we had 1,000 incidents last year, which had a total resolution time of 6,000 hours. If we could cut that by 10% we might be looking at a savings of 600 hours in its simplest terms. That’s 15 workweeks for one person to do something else more productive.

Marketing this to the leadership teams is the final piece for any improvement initiative and, quite frankly, another place where this could all far apart. This needs to be simple and to the point: Instead of saying “We would like to reduce incidents by 15%,” we should say, “We would like to add 600 hours of productivity to the team next year by reducing incidents.”

The first statement lends to a question of “What does that mean to me?” while the second speaks to the team in terms of a tangible impact.

Overall you need to keep this simple. Plan goals tied to your business objectives, measure what you are doing, and communicate to keep yourself on track with your business.