On business impact (I)

Having business impact is adding business value.
This whole concept of value has been returning to my thoughts and to the discussions I have so I’ve decided to start expressing some ideas on this topic in writing.

Organizations exist to bring value.
Value ecosystems are created and all the entities from an organization exist in order to create some kind of value, mainly for the bigger entity: individuals join the organization to bring value in the teams, teams (can be generalized to project teams, departments, business units) are created to bring value to the organization. Some entities bring value internally, and others are the connections with the outer world value-wise [bring value from outside->in or from inside->out].

Links between all these entities are designed (or just happen) and the whole thing adds an unique value-fingerprint in the world.

Humanity is still struggling to find more appropriate tools to measure value [especially the 'intangible' value]. Meanwhile, a “path of lesser resistance” approach to the measurement of value is through measuring the money produced by each entity.

Nonetheless, I imagine that if somebody could measure the value brought by the entities of an organization, he would discover that it resembles a living creature – being born when sub-parts form a new entity (individuals form teams, teams form organizations), evolving while the parts are connected in specific configurations and finally transforming or dying.

Each entity has a range of value that it can add while in a specific configuration.
This is variable on the capability of that specific entity, the perceived capability [outside trust in the entities' capability] and the drive to produce value in that configuration. If the drive is not strong, the potential for high value is wasted or is directed outside the higher entity or even outside the organization.

Complexity is inevitable while scaling the organization with the hope to create more value.
Leaders of each entity are in the position of finding better ways to connect their entity with other peer-entities or to higher entities in order to produce higher value, and also to increase the capability of the entity they lead, the outside trust and the drive to produce value in the current configuration or the new configuration they set by finding new connections with other parts of the organization. You can think about this at individual level [leading yourself] and team level [leading others]. Members of an entity are in the position to support their leader in the quest to maximize the value brought by their entity.

Having this image of value flow in an organization, I’ll focus on placing HR as a value-adding entity in a future post. Until then, I’m curious to hear your opinions about the proposed take on business impact. Are you seeing things differently?