Business Value 101

There is probably no more expansive, over-reaching and diluted lexicon in the HR sphere than the abuse of tongue and pen applied to the wide, wide world of Business Value.  Here starts a four-blog series to counter the madness and reel in this infamous coin to it’s original cash-liquid meaning. The Series will cover business value basics (101 and 102), then illuminate on the “value of people”  misnomer.  My concluding sentiments address the  difference in employee and customer roles in the value debate.  The complete series is flagship Switch HR.

We begin with the 101 if it.  What is value?  Here are a few hints:

• If it requires an ROI model to prove it, you don’t have it.
• If you refer to it as indirect, soft, invaluable or hard to quantify you don’t offer it.
• If it is preventive, maintenance-focused or employee-nice-to-have, it ain’t the real deal.
• If it designed for asset protection, risk avoidance and not getting sued or fined, then it is not value added.

Required, mandated, necessary, even important, maybe. But it is not true value, not to the customer.  All Switch HR initiatives define Value 101 the same way:

A workplace activity is value added if the customer is willing to pay cash for it.

It is not value added if the customer does not want to pay liquid money for it. That’s the 101 of it. The problem, of course, for a lot of practitioners today is that nothing done by the HR or Corporate Communications department presently meets the definition, nothing.

Examples abound. Do your clients shell out any cash to support your decisive zero tolerance policy or to reward your company’s commendable pay equity practice? Is your biggest customer okay with a price increase to cover the install of your web based performance appraisal system and awesome new learning management software for employee training? How about your HR policy manual? When was the last time one of your customers wanted to see a copy?

And then there’s the company Intranet. Some employers pay outrageous money to build a slick, informative and secured Intranet for employees. Are your clients willing to pay a little extra to ensure your employees have a secured online place to go to find the right benefits form? Of course not.

HR folks may already be protesting. Are you saying that a great work environment and sound employment practices are not important to the customer who relies on the expertise of our employees every day? Maybe. It depends on what you mean by “sound employment practices.” I know, for example, that your clients do not want to pay for your employee handbook that describes those practices. Try to sell them a copy, you’ll see. And if those treasured web gadgets are so value added, then why don’t you split the cost and let the customer have access too? Because they won’t pay for it, that’s why.

I am saying that we confuse words—value is important, but important isn’t always value. It depends on the eyes of the customer. They decide. I am saying that investments in people who work for you are fine, even good, righteous and all that. But it has value only if the customer is willing to pay you more as a direct result. I’m saying that a lot of employment programs and workplace communication activity are necessary maybe—but still baseline, expected and the price of the ticket. Customers know you have to do it. They have to do a lot of it too. But cash-liquid value is nowhere to be had.

Customer willing to pay for it or not. That’s the 101 of it. Don’t forget. Too restrictive, you say? No department can meet that criterion in everything we do. What of saving the company money and how about process improvements? That’s valuable and can be measured in hard dollars. True, true. But you should still prioritize your daily agenda, work activities and projects around the customer’s view of value,  not your own.  

See, that was easy. Next we graduate to Business Value 102.  Bring your home work!