CQU Project Management education

The cost benefit of project team members

Roger La Salle
August 20, 2013

Measuring work performance is vital to ensure we are making good decisions. Indeed, there is an old saying: “If you can’t measure it, don’t change it.” This particularly applies to process innovation where the cost benefit of changes can usually be accurately quantified before they are ever made.

As for innovation management the same applies. If you are investing in innovation then it is important to understand the return that particular investment delivers. That is, real returns and not abstractions like “It’s important to be seen as innovative!” Further, the return should ideally be forthcoming within 18 months. If this is not happening then it may be time to entirely review your approach.

Measuring the cost benefit

It is interesting that in many businesses the cost benefit of most employees can be accurately measured.

In processes this is easy, so too in accounting and law and consulting where people are expected to bill typically 70-80% of their time to a client at a rate of at least double their actual cost. Using a timesheet is a means by which this can be readily measured.

But what about the managers of:

  • Products
  • Categories
  • Sales
  • Marketing
  • Communications
  • Finance
  • HR

—and so on? And what of their staff and executive assistants?

I am often amused when I see the UK version of The Office with people silently poised over computer keyboards. One wonders just what value each and every one is delivering and, moreover, if and how it is measured?

As you career develops you may reach the dizzy heights of senior management or even get lost in the bureaucracy. Apart from some KPIs that can usually be met by clever operators, there is usually no real measure of the return on investment that you or your position delivers. What would happen if you or that position was no longer there? Would somebody take up the slack, perhaps the business may well proceed as normal?

In the case of very senior positions, perhaps those people making several millions of dollars per year, this is an interesting question.

One answer may be to explore the value and accuracy of decision making. For example, if one person at the top can make just one better decision than another person who may have been passed over for the position, that single better decision may be worth millions, or even billions.

The bottom line is that we need to find proper ROI measures for all positions to be sure each and every staff member is delivering at least twice what they are costing.

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Roger La Salle
Roger La Salle is the creator of the Matrix Thinking technique. He specialises in innovation, opportunity and business development, and speaks at international events on those topics. He is the author of four books, director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas.
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