Where Every Leadership Decision Should Begin

Many leaders use the word “value” with gay abandon… they say things like, “Come on, I want you all to add value”, or “We need to create value for our customers.”

But for many of the people that this is designed to motivate and encourage, it’s almost meaningless. There’s no tangible way for them to connect the word “value”to the actions they might need to take to deliver it.

What should they do differently from what they’re already doing?

How would they know if what they were doing was value-accretive, or not?

Value isn’t forged in the rhetoric, no matter how consistently you talk about it… it’s forged through the actions of the leaders. And these actions begin in the decision making process you follow.

If you don’t get the value focus right when you make decisions, it’s almost impossible to retrofit it further down the track.

Whenever you make a decision, you have to put value at the forefront of the options analysis, the discussion, and the eventual outcome.

During my corporate career, I saw so much money p!ssed away, simply because value was not put at the center of the decision-making process.

There are many factors, other than value creation, that can drive leaders’ decisions:

• Perhaps they want to do the work that’s most challenging or interesting;
• Maybe they want to expand the scope and influence of their team;
• It could be that they want to signal their virtue by pursuing a social initiative; or
• They simply want to be liked, so they pursue their team’s ideas, without ever asking the hard questions that would validate their potential value.

Here are 10 fundamental questions you should ask, when considering a decision that requires any resource investment (resources being people, money, assets, and time):

1. What is the required investment?
2. What do we get for that investment (i.e. what value will be generated)?
3. Where and when will I see that value appear (i.e. it has to be tangible)?
4. What other options did you consider before recommending this option? 
5. What risks are associated with the investment (i.e. how likely is it to pay off)?
6. What assumptions did you make when you constructed the value case?
7. Have you tested those assumptions with some “what if” scenarios 
8. What’s the worst case scenario (i.e. what’s our exposure if it all goes to custard)?
9. Are there better alternatives for us to invest our resources in?
10. Are you confident that you can deliver this value to the company?

Now, it mightn’t be exactly those questions for you, but by asking any similar questions that put a value focus at the forefront, you’ll achieve multiple objectives:

• You’ll push your people to support their recommendation with facts and data, rather than desires and opinions;
• You’ll demonstrate your own focus on value: if the value case doesn’t stack up, then it’s not happening
• You’ll reduce the amount of low value work, improving your team’s effectiveness by focusing their energies on the things that really move the needle

Want to generate more value? Well, build it into your team’s decision-making discipline, and use it as your primary filter to stop the dumb sh!t…