Time is the new value

First published Tuesday, 09 Sep 2014 16:56

As I look back over the years at topics I have focused on and although not really planned, it really does all fit together; a commitment to help align business and technology, drive value and focus on outcomes. I am writing another article called "A History of Value", but for now let’s fast forward to 2009.

It became more and more obvious that the traditional IT model of Plan Build Run which is so enshrined in the IT organization, the IT service model and even the standards, was not enough. Nicholas Carr said "IT doesn’t matter" because he wanted more than the usual Plan, Build, Run-away! We have to do a much better job at showing how technology supports what the business is trying to do, how technology supports business change. Adding Value Realization as a fourth stage of what IT Organizations need to do to stay relevant to business, enables a broader conversation.

Topics I have focused on over the years
Topics I have focused over the years.

I have spent quite some portion of my career talking about Value = Benefits – Costs. We usually obfuscate this simple equation using the summation of time series cash flows (positive benefits and negative costs), risk adjusted and blah, blah, blah. The concepts of Value are simple and connect directly with words like Usage, Adoption and recently Consumption. It matches the COMMIT-EXPLOIT findings from MIT-CISR in 2011. But over the past months, I came to question my focus on value. What heresy is this you say?

Consider the relationship between value and time and how we measure both. The articulation of NPV is so focused on value, appraising the capital needed and returning, in present terms, the value measured that we forget the importance of time that underlies all of the cash flows and is essentially removed from further consideration by focusing only on NPV. But what if we focus on time? The world is moving at a fast enough pace already so let’s just get things done quicker. No need to worry about value; impact the cash flows over time and the resultant NPV will increase.

So how do we reduce time? We plan quicker, build quicker, deploy quicker and ensure the users get up to speed quicker. In other words we accelerate the change; this also reduces risk and therefore reduces the need for contingency. We may even decrease costs (harder to spend money if there is less elapsed time). So we talk to the business about getting time back, not promised benefits.

Because benefits are the hardest thing to measure. While costs come on invoices and we can easily track cash flows and cost reductions, benefits are much harder to measure. Tangible or intangible? There are ways to quantify value (another upcoming article) yet perhaps there is something simpler to measure? Again time comes to our rescue. One side benefit of a focus on time is that we all have watches (or at least phones and calendars or clocks on the wall). Time is the easiest thing to measure. We know when the deadline on Tuesday arrives. This is why we search for the quick win; because less value earlier is more beneficial. Can we get this done by Tuesday? Because then we can launch the campaign early, send out the sales force, start selling the new product on Wednesday. This is of value to the business.

One last thought, which is the real magic. Even the improved NPV pales into insignificance if you reduce the time to value. Because you have given the organization back the most precious thing – time. They now have the time saved, in a desired future state, adoption done, people ready, risks mitigated, change completed and reinforced. Go smoke the competition, enter new markets or even, do more change. This is what I am going to explore, giving back time is the new value.

OK, so I am adding this comment myself but I just wanted to record that Tom Peters obviously agrees with me about the importance of time: The only thing on earth that never lies to you is your calendar. That’s why I’m a fanatic on the topic of time management. But when you use that term, people think, “Here’s an adult with a brain. And he’s teaching time management. Find something more important, please.” But something more important doesn’t exist.

More at McKinsey.com for the full article or watch some of his other short videos.

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