Is the Juice Worth the Squeeze? Evaluating Costs and Value in Business Decisions

By Paul Shearer

Disclaimer: The views in this article represent those of the author and do not necessarily represent those of his employer: past, present, or future.

In the fast-paced world of business, the metaphor "Is the juice worth the squeeze?" is particularly apt. It challenges us to weigh the costs and benefits of our decisions, ensuring that the value we extract justifies the resources we expend. Here, we delve into the intricacies of costs and value, helping professionals make informed decisions that drive genuine progress.

Understanding Costs: It's All About Opportunity Costs

Money: Financial resources are limited. Every dollar spent on one venture is a dollar that could have been invested elsewhere. Thus, it's crucial to ask: "Is this the best use of our funds?"

Time: Time is arguably our most finite resource. With only so many hours in the day, how we choose to allocate time directly impacts what we can achieve. This includes deciding which projects deserve our time and which should be delegated or postponed.

Attention: The myth of multitasking is pervasive. In reality, our attention is limited, and focusing on multiple tasks often leads to decreased productivity. Moreover, context switching is a significant drain on our cognitive resources. Statistics show that the average worker is interrupted seven times per hour, with each interruption costing as much as 23 minutes to refocus. For a typical nine-hour workday, this leaves merely 57 effective minutes for focused work, emphasizing the critical need to manage our focus wisely.

Ego Depletion: Engaging in tasks that require self-control and decision-making can drain our mental energy, a phenomenon known as ego depletion. This makes subsequent decisions and tasks harder to complete effectively.

Who Pays the Costs?

It's essential to consider whether a decision creates negative externalities within an organization. Are the costs being unfairly pushed onto other teams or departments? If so, the apparent value created might just be a redistribution of burdens rather than a true addition to organizational wealth.

Defining Value in Business Terms

Profit: The primary measure of business success is profit. Does the decision or project contribute directly to financial profitability?

Scale: Can the project or decision scale in a way that reduces costs per unit over time, potentially exponentially?

Organizational Culture: Does the initiative enhance the workplace environment and culture? A positive culture often translates to higher productivity and employee satisfaction.

Personal Satisfaction: It's also important to align projects with personal values and satisfaction, ensuring that what we're doing resonates on a deeper level, which in turn can enhance motivation and commitment.

Creating Value and Costs for Whom?

When assessing value and costs, consider the various stakeholders: yourself, your team, your department, the entire company, and the customer. Each perspective can reveal different benefits and costs. It’s crucial to step out of our own viewpoints and consider the broader impact of our decisions.

Examples:

Transitioning from Traditional IT Delivery to DevOps

A pertinent example of assessing costs versus benefits is the transition from traditional IT operations to DevOps in a previous organization. The move to DevOps meant that about 80% of tasks were automated, leading to significant efficiency gains. However, this shift left about 20% of tasks unaddressed, burdening other parts of the organization. This scenario highlights the importance of recognizing and managing the redistribution of costs. Some transformational value was created but there was an unrecognized shift in responsibilities to others part of the organization which suffered and took a major hit in terms of quality. The bottom-line was the end-customer quality-of-service regressed.

My Move from Solution Engineering to Professional Services and Back Again

At a previous employer, I held the role of Solution Architect, where I was responsible for the design, pricing, and scope of implementation projects focused on migrating and upgrading ERP systems to public cloud environments. After several years, I transitioned to leading the Professional Services department, overseeing the very projects I once designed and sold.

During this period, I often humorously remarked that "PS Paul" (Professional Services Paul) dislikes "SE Paul" (Solution Engineering Paul). This jest was rooted in the initial six months of my new role, during which I essentially "ate my own dog food"—meaning I dealt directly with the execution of projects that I had previously scoped and sold. This experience vividly highlighted the costs of any subtle ambiguities left during the solution engineering phase.

A few years later, I was offered the opportunity to return to Solution Engineering, this time as a Vice President. Armed with the invaluable lessons learned from the delivery side, I was better positioned to design solutions that were not only technically and financially sound but also realistic and considerate of the challenges faced during implementation. This experience underscored the importance of understanding and acknowledging the full lifecycle of a project, from conception through delivery, to truly optimize outcomes and minimize unintended costs.

Conclusion

In business, it’s crucial to ask, "Is the juice worth the squeeze?" This means rigorously analyzing the opportunity costs of money, time, attention, and the depletion of our cognitive resources against the tangible and intangible benefits they yield. By considering who bears the costs and who gains the value, we can make decisions that not only propel our businesses forward but also foster a supportive and productive organizational culture.