How can business value be measured when it includes intangibles?
No doubt, this is a hard problem that has defeated many value measurement efforts. While not every form of intangible value is measurable, it’s possible in many cases using several clever techniques. • alternate units of value — in other words, a “currency” that is contextually meaningful, such as hours of time, personnel headcount (“full-time equivalent” or FTE), or slots of attention. • “willingness to pay” or “willingness to accept” — techniques from economic cost-benefit analysis where stakeholders are (indirectly) asked for their willingness to pay for upside of an outcome or willingness to pay to avoid the downside of an outcome. Establishes relative economic value within a specific decision frame and stakeholder perspective. • interval scales or ordinal scales of measure — interval scales establish relative differences between values, but not absolute value or ratios. Ordinal scales establish sequence but not relative difference or ratios. For more, see “Levels of Measurement” W
