What’s it worth? (2)

The way of thinking I described yesterday also applies to buying equipment, services and training in an organisation. The question isn’t simply “How much does this cost?” (which usually feels like a lot), but rather “How much is it worth it to us to have this problem solved?”

The obvious thing to look for is the gain in productivity that the new training or tool will bring: “What will this enable us to do, and is the gain worth the cost?” – if this isn’t clear, it’s probably not worth considering until it is.*

It’s sometimes less clear what a new tool will allow you to stop doing – will it cut several steps out of a process, need less maintenance, reduce physical waste, remove a bottleneck, stop someone from being interrupted to fix its problems?

Then there’s the inverse-opportunity cost of the new tool: what will someone from your team be able to do more of with the time and attention that’s freed up by the new asset? If the new tool frees up time to create assets, build connections, serve others, or run other important processes better, you might find suddenly that its worth several times its price.

Buy time. They’re not making any more of it.**

*And it’s essential to remember that the cost is more than the price – how much space does it take up, what support will it need, what maintenance to keep it working, what does it use up? – see Whole-life cost.

**With apologies to Mark Twain.

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