April 11, 2024

If it is observable, it is measurable

There is a book that thoroughly rewired my brain with regard to the concept of assessing the value of - and progress toward - outcomes:

How To Measure Anything: Finding The Value Of Intangibles In Business by Douglas Hubbard.

In short, anything - and I mean ANYTHING - can be measured.

Risk, security, satisfaction, morale, and yes, even happiness, beauty, and love can be measured in ways that are useful.

This is not to say that everything can be quantified exactly using an objective unit of measure.

That’s not the point.

We don’t need measurements to be exact or objective.

What we actually need in most cases is a metric that is good enough to be useful for making a decision.

The purpose of taking a measurement is to assist us in making a decision.

If there’s no decision to be made, there’s no reason to take a measurement.

Once we know what decision needs to be made, then we have an idea of how precise our measurement needs to be in order to be useful.

Here’s the thing...

If you want to value price a client engagement, you need to speak with your client to uncover their desired outcome in terms of a change between states (e.g., “before vs after”).

This change - by definition - will be observable.

And if it is observable, it is measurable.

The measurement might be based on something fairly concrete, like revenue numbers, or something more squishy, like Net Promoter Score.

But whatever it is, this is what you base a value price on.

And doing so will give them what they need to make the decision to hire you (or not).