!NERD ALERT!

Delivering Value

Good companies look at value as the main currency by which to evaluate employees. This is true for hiring, promoting, and termination. It is universal enough to allow me to give generic advice to people looking to get more successful, without knowing much of their context. My advice would be: “Find ways to deliver as much value as fast as possible”. If this doesn’t work, you’re probably not in the right place. One of the reasons this advice, although universal, is hard to materialize is that “value” is a slippery term. Everybody knows when they see it, but it’s hard to formalize.

So we will try.

Mathematical Definition of Value

Here I’ll try to define “Value” better to give a framework to deliver more of it.

The start is simple, your Net Value is simply:

Net\ Value = Value\ Added - Cost

This is just simple arithmetics. The value you give minus the value you take – That is your Net Value.

Now let’s break down the “Value Added”. Your contribution can be decomposed into 3 components, the Time you put in, your Efficiency (how much work you do in a time unit), and your task Importance (the value created for every unit of work done). So we get:

Value\ Added= Time\times Efficiency\times Importance

As a sanity check you can also see that multiplying these 3 gives you “value” units which is what we want (physics majors – I got your back):

\overbrace{\cancel{ hours}}^{Time}\times \overbrace{\frac{\cancel{work}}{\cancel{hours}}}^{Efficiency}\times \overbrace{\frac{value}{\cancel{work}}}^{Importance}=value

So the equation becomes:

Net\ Value= Time\times Efficiency\times Importance-Cost

Now what is the Cost?

The cost are the sum of resources you consume to deliver that “Value Added”. While the first thing that come to mind is compensation, often it is only secondary to the time you require from your peers and your manager. So is the cost just the sum of the money and time you consume?

Well, not exactly.

See, Money and time both have units different than Value, so it doesn’t add up (literally. What is 10k$+50Hrs anyways?). So what you actually need to account for is the alternative value (”alt_value”), that could be attained from these resources. So the cost is defined by the alternative value of your compensation, plus the sum of the alternative value for all the time you require from everybody else:

Cost:=alt\_value(comp)+\sum_{time\ from\ people}{alt\_value}(time)

Now the interesting thing is, that the alternative value of time, say, 2 hours with someone, is given by the same product of components in “Value Added”: the time (2 hours) multiplied by this person’s efficiency and their tasks Importance.

This nerdy formalization is interesting, because it enable us to extract some cool (🤓) insights about how to become more valuable to your company.

Insights

Maximize the formula

In order to maximize your “Net Value” you can:
1. Increase your time, your efficiency and your tasks importance.
2. Decrease the resources you consume.
Now let’s explore what is worth increasing, decreasing and how to go about it.

Increase Importance

💡 Reminder:

Importance:=\frac{value}{work}

Your tasks importance has two main factors:
- One is external and somewhat out of your control – what responsibilities you were given. What are the tasks you can do.
- The second one is in your control and is your prioritization – Choosing what to do first (and best) from everything you can do.
Prioritization is the best way to increase the average importance of the work you do.
It is also the most overlooked compared to its gains potential.
Succeeding in delivering value will also take care of the external factor (responsibilities given) of task importance, in time.

More time has low potential

Because the “value added” factors (time, efficiency and importance) are all multiplied, a 10% increase in either will result in the same over all increase ((1.1x)*y=x*(1.1y)).
Increasing your time will, in fact, increase your value but you can probably play with 20% at most without decreasing you efficiency.
Your efficiency and prioritization could easily get +100%. Each.

Requiring less resources is effective

Use other people’s time with the highest efficiency, and don’t use more than you need.
Meetings have immense alternative value. The more attendees, and the longer – you get the point..

Look for negative resources

Any hour you save someone is a negative resource you consume, hence positive value.
Look to save time for people with the highest efficiency, and highest task importance.
Your manager would be the first place to look, but also efficient individual contributors with important tasks.

There are more ways to become more valuable. But these ones are, arguably, mathematically proven 🧑‍🎓

Value → decomposed

◼️

-Nivge

Subscribe to Get these in your inbox.

Decomposing Value