Now that you have your value meeting scheduled with your boss, what are you going to say? Here are some suggested talking points to help keep you on track and to make sure you cover the most important areas.
financial drivers
Steps to Take Before a Value Meeting
When you’re ready to have a value meeting with your boss, you can follow certain steps to ensure that you have a productive conversation. Most organizations across the globe are not having this type of discussion, so it really helps to have a plan in place and all your ducks in a row.
Business Value and External Marketplace Drivers
The competitive global marketplace shows little mercy for organizations that are slow to raise the bar for their customers and their employees. Business value tied to external marketplace drivers tend to be strategically focused and is created by:
Business Value and Internal Financial Drivers
Growing organizations require value to be more tangible, and the contribution of business value by employees to be broader. While individual value is critically important to an organization’s performance, it is not the type of value that will sustain an organization. Business value tied to internal financial drivers reflects a more strategic perspective that can have a positive impact. Today, your organization needs as many employees as possible focused on creating value through internal financial drivers.
Creating Individual Value
When you perform your job well, you are valuable to your organization. When you are focused primarily on creating individual value, you tend to be in a role that is more tactically-focused. And let’s face it, some roles in organizations need to be tactically focused. This focus is very valuable to the organization. Not every role has a clear line of sight to financial performance, nor should they.
How You Can Create Value in Your Organization
In order for an organization to obtain value from you and for you to raise your value in your organization, you must capitalize on either an existing way of creating value or identify new ways to create value.
Value Creation is Based on Financial Performance
In the Raise Your Visibility & Value model, value is defined as the outcome of a situation when the outcome of a situation exceeds the cost incurred by a satisfactory margin. Raising your value is defined as performing activities that connect individual contributions with business performance. To be considered a valuable employee, you must tie as many of your activities as possible to how your organization measures how well it’s performing. For most organizations, business performance is predominantly measured through financial performance. As you work to create value for your organization, you must focus your activities on your company’s financial performance.
How Your Organization Obtains Internal Value
Internally, you need to manage your organization in ways that ensure investors and customers stay interested. In order for your organization to survive for the long-term, it needs to obtain value from vendors and employees – internal value.
“Value” is the New Corporate Currency
The head-spinning advances in technology, endless bottom-line financial pressures, and growing networks of global economies described earlier demand a need for superior performance and sustainable efficiencies. Organizations aspire to motivate their employees to be better, more productive, and more engaged. Leaders seek ways to create a common language behind which organizational goals and activities can align. What can replace the void that is being created by the slow demise of performance management systems? What is the new corporate currency?
Satisfactory Margin and Value
“Value is when the outcome of a situation exceeds the cost incurred by a satisfactory margin.”
But what is a ” satisfactory margin”?
Margin is the difference between the amount of cost incurred and the benefit derived. Not all margins, however, are created equal. In order to experience value, the margin must also be satisfactory. For example, a manufacturer produces an item that costs him $10.00 and sells the same item for $12.00. So this item has a 20% margin (($12.00 – $10.00) / $10.00). This manufacturer may be very happy with this margin. But for another manufacturer, and for a variety of reasons, this margin may be woefully deficient.