What is the Impact You're making on the Business?
The purpose of a team
If you are a team that is a part of a larger enterprise, there is a reason why you exist as a team. And whether directly or indirectly, that purpose is very straightforward: creating business impact. This is often forgotten or missed. But it is absolutely vital that the team, the leadership, other stakeholders and subject matter experts have a clear understanding of the impact that the team is making.
Let’s talk about how to ensure that this is the case.
Identifying business impact can be hard
But first, so that we better understand the complexity of what we’re dealing with, here are two examples.
In the first example, a software team is supporting a specific customer who requests some functionality enhancements to the system that they license, and they are ready to pay for those enhancements. It is quite easy to tell the business impact that the team is producing because it has a very specific monetary value and that value is what the customer is paying for the enhancements.
In the second example, a team is maintaining the organization’s identity management platform. They don’t produce any specific features to the company’s customers. As a matter of fact, they are quite removed from the end customer, as well as from the revenue streams. And it may be very tempting to just assume that the team in example 1 generates more value, because they produce direct cashflow. However, should the second team fail to properly maintain the integrity of the data their platform is handling, the whole enterprise operations may grind to a halt, as all the rest of this company’s IT assets rely on the identity management platform. So, intuitively, it feels like they are producing tremendous value, it’s just a lot harder to put your finger on it, due to the nature of what the team does.
The pitfall of hard measures
But here’s an important takeaway: In a complex organization, a lot of teams and individual subject matter experts may be creating business impact in a very indirect way. That, however, must be understood and appreciated. Moreover, it is important that the team knows this because true motivation does not come from deliverables you create. It comes from the impact that you make.
Here is a dangerous pitfall to avoid: not everything in a complex organizational system can be expressed in financial value. That doesn’t imply that the value is low. It only means that the immediate deliverables that a particular team is producing, are very indirectly connected to business benefits.
Avoiding the extremes
But of course, the conversation about impact and real value is important. Just as there is one extreme where an organization may attempt expressing everything in dollar value regardless of whether it is possible or not, there’s also another extreme where everything is assumed to be very valuable regardless of the actual outcomes. This creates a pretty dire situation where the company cannot effectively control their spend and the real situation with value is quite obscure. So, a balance is needed. The conversation about business impact has to routinely happen and the impact must be understood by the stakeholders, alignment must be reached, even though this alignment cannot be always based on hard financial figures. Meaningful qualitative analysis of the impact has to occur no matter what.
It’s time to ask yourself about the impact that your team is making. Try to understand this impact by mapping out the full chain of outcomes from what the team directly enables and all the way to the ultimate business benefit. This is an important action item. You will discover a lot on this path.