3-Step Plan to Measure Value

Are you measuring the value you have added to your company? 

We ask this question of our coaching participants on their first day of class. Surprisingly, most of them say no. Those that actually have an idea of the bottom-line impact of their contributions often don't share those results with anyone.

Because we think that measuring value is something you should definitely be doing, we developed this 3-step process to help you get started...

3-Step Plan to Measure Value

measure value

Step 1 - Keep Track

Most of us keep a "to-do" list, but when we're done with a task, we cross it off the list. Instead, you should keep the things you've accomplished on your action plan to serve as a reminder of your achievements (to you and others). This will enable you to track your impact. It's also important to track all accomplishments you've been a part of, not just those that are under your direct control.
measure value

Step 2 - Put a Number to It

Now that you've started keeping track of the contributions you've made, it's time to express them in terms your owner will appreciate... Numbers.  Here are some examples of things you might need to put a dollar value on:
  • cost savings identified
  • productivity gains realized
  • impact of suggested pricing changes
  • improvements to the cash conversion cycle
Another important consideration is the impact these improvements have on "enterprise value". To calculate this, multiply any improvements to EBITDA realized by the standard multiple of EBITDA used for valuing companies in your industry.
measure value

Step 3 - Let People Know

It's no surprise that salespeople are often seen as the biggest contributors to company success. After all, when was the last time your sales force failed to make the owner aware of the huge sale they just closed? Humility is a trait peculiar to those of us in accounting and finance. It's no small part of why we are often only seen as overhead. Take a page out of the sales manual. Make sure your CEO knows the value you've added. You've got the numbers now; share them!

Learn how to apply these concepts in Strategic CFO Coaching workshops.

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