All strategic initiatives promise to deliver value. Measuring and proving value is complicated when simultaneous initiatives are deployed and external factors impact results. Companies often bundle initiatives or choose an easier route, using assumptions to attribute value. This approach results in poor visibility to value and ownership—ultimately leading to misinformed business decisions.Effective decision-making relies on accurate value attribution across drivers, correct forecasting of financial outcomes, and ROI analysis. Well-intentioned initiatives may be designed to drive value but can tap into the same value drivers, making it unclear which initiative was responsible for the value. Without a careful and detailed tracking process in place, this results in “double counting,” or value overlap, which has far-reaching consequences. Understanding and measuring value overlap is crucial for effective decision-making and accurate financial reporting (see figure 1).Companies can avoid value overlap by establishing a clear value attribution process. Kearney’s proven four-step process helps clients avoid value overlap. The process seeks to identify value overlap, define a method to attribute value, and achieve value alignment across stakeholders before the initiatives begin.Build value matrixIdentify areas of value overlap between initiatives by developing a value matrix (see figure 2). A value matrix defines value by business unit and P&L line item, helping to prioritize areas of overlap. Granularity underlies the matrix as GL code and value drivers provide traceability and accountability. After identifying and prioritizing overlap areas, alignment with the executive leadership team is vital. Top-down push ensures buy-in from teams to maximize value identification.Conduct value deep divesConduct collaborative meetings with initiative owners to identify and review areas of overlap and methodology for tracking. The meetings entail detailed reviews of relevant initiatives, discussion on where overlap may exist, and root causes. Ultimately, the outcome from each meeting will be agreed calculation methodology for overlap areas, operational KPIs, and value forecast.KPI-based attribution is often preferred as a balance between accuracy and difficulty. Assumption-based attribution lacks granularity and accuracy but can be useful when unique KPIs do not exist or are too difficult to track. Meanwhile, detailed attribution (for example, A/B testing) is often resource intensive and accuracy is still limited by factors outside of an organization’s control. When defined uniquely, KPIs form the foundation to calculate discrete value by initiative and use case. Each KPI can be translated to incremental EBITDA value or revenue growth, such as a sales initiative driving increased sales per lead or a manufacturing initiative driving decreased labor cost per pound produced. When done granularly and thoughtfully, this methodology ensures value is not duplicated across reports from each initiative.Agree on valueInitiative owners and executive sponsors must sign off on value to ensure accountability. Once signoff is received, the forecast and budget can be updated to incorporate the expected impacts of initiatives.Ongoing governanceOnce the forecast is approved, tracking of actual value realization and KPIs begins. Actual tracking follows the calculation methodology aligned on during the value deep dives and is often based on the unique KPIs identified. New business developments or market events may require refinement to the value forecast. A formal governance process must be in place to track changes and form a bridge from forecast to actuals. This includes criteria and escalation path defined for changes to forecast.Though investigation of value overlap may reduce value forecast, accuracy is improved and initiative-level value tracking is enabled. Leadership gains confidence in the forecasts and is bought-in on initiatives. Further, owners sign off on value, confirming they are accountable and motivated to achieve their targets.Learn more about our Consumer and Retail.