It is not often enough that we ask ourselves how we measure value. Practically speaking, it comes from a balance between cost, profit, and the transformative power of an experience. But what is the mindset that allows us to identify it?
Early in my career, I was a team leader for the Fourth of July celebration on the National Mall in Washington, D.C. It was a totally spectacular event, broadcast live to the three major networks, recorded for several cable channels, and included over a thousand VIPs and showcased major headliners like the Beach Boys and the Judds. By all accounts, it was a transformative experience.
However, the costs over-runs, legal fees, lawsuits easily tripled the original budget despite the fact that many of us were seasoned event planners on this scale.
In this equation, the cost, the profit, and the experience itself were totally out of balance. But the error was not in planning, it was in our definition of value. At this point in time, we understood value to lie in scale and spectacle.
We’ve since learned that value does not lie in a one-off, dazzling experience—and not necessarily in the scaffolding beneath it (the ratio of profit to cost) either. Value lies in the long-term connections we build to stand the test of time because these are the connections equate to consistent, building revenue over the course of many years. In this equation, profit is long term and growing, costs are refocused and under control, and the transformative experience only gets better with time.