Business Value Pyramid


One way to look at business value is by using the Business Value Pyramid (See Figure Below). In this approach we start at the bottom, with the more basic, or functional benefits, and we build towards the more transformative values. Note that in this example we are looking at benefits in terms of the customer only, not in terms of the business. For this reason, if this is used, it is most likely used in addition to other more financial and risk-oriented methods of measuring business value.

Business Value Pyramid
Figure: Business Value Pyramid

Starting at the bottom of the pyramid, we begin with the Functional elements. These are things that, for instance, save time or simplify, reduce risk, cost, or effort; or connect, integrate, and organize things more effectively.

In the next step in the pyramid, we have the emotional elements. These include things that are fun, rewarding, or attractive. Or things that reduce anxiety or increase wellness, as well as those things that are well-designed and attractive.

The next step are life-changing elements. These motivate and provide hope, or promote belonging or self-actualization.

At the top of the customer benefits pyramid are those items that transcend an individual customer and provide global or societal impact or good. While not every product or decision can do this, it is a good exercise for businesses to undertake as they calculate the business value of their work.