The Value Room · Investment Allocation Review
Sample · fictional company
Investment Allocation Review Northfield Software · FY2027 budget · ten requests, one standard

Ten requests, . Commit now and the plan is worth as much.

The Read found the problem and the Diagnostic ranked the decisions. This prices next year's budget with the same discipline, before the committee signs it. Northfield and every figure here are fictional; the method is the one we run on client data.

Committed now

of requested. The rest waits behind a gate or is declined.

Value over three years →

Expected net present value at 12%, plan as submitted against plan reallocated.

Decline4

Requests worth that lose money under any reasonable assumption.

About 3 minutes · or scroll and read
01 The plan as submitted

Ten requests, ten sponsors, ten different yardsticks.

Each request arrived with its own case, measured in its own unit: pipeline, adoption, retention, morale. That's normal. It also makes them impossible to compare.

Ask is year-one cash: anything spent up front plus the first year of running cost.

02 One standard

One question for all ten, asked two ways.

What is this worth over three years, at Northfield's 12% cost of capital? First if you commit the full amount today. Then if you fund a pilot, read the result, and scale only when the read says so.

Each answer comes from 2,000 simulated outcomes, so you see the spread as well as the average.

Staging is a real option: the right to scale, without the obligation. It's worth most when the outcome is uncertain and the pilot is cheap relative to the full commitment.

03 The verdict map

Every request on one map. Open any one to see why.

Fund nowReshapeStageDecline
04 Reshape: hiring

Four experienced AEs win year one. Six juniors win year three.

Experience is worth in year one, the same figure the Diagnostic found. Over three years the gap narrows to , because six juniors eventually out-produce four seniors.

So hire four experienced AEs now, and hold the option to add two juniors in the second half if pipeline coverage supports them.

Six junior AEsFour experienced AEs

Gross profit less on-target earnings, by year, before discounting. A new rep in a covered market books 60% of the average rep (modelled); the experience premium comes from the research, as in the Diagnostic.

05 Stage it: Mexico City

Committed in full it's a coin toss. Staged, it's an option.

The request is three AEs and a manager. The staged version is one AE and a partner for two quarters, and the full team only if the pipeline shows up. Move the slider: the less anyone knows, the more the right to wait is worth.

We know it wellNorthfield's estimateNobody knows
06 Decline

Four requests lose money in nearly every draw.

Two came straight from the Diagnostic. The other two buy something Northfield already has, or is about to stop needing.

07 The gate

A budget set once a year needs decisions made every quarter.

A stage is worth something only if the gate holds. Fund the pilot and then scale anyway, and you've paid for an option you never used. On these three requests, holding the gate is worth over three years.

We also tested re-splitting selling hours every quarter. It adds a year and wins in of draws: worth doing, and small next to the gates.

Committed nowStaged, gate heldLines: worst 5% to best 5%
08 The plan, reallocated

Same ten requests. committed, expected.

Every dollar of the original ask lands in one of four places. The committee signs the first and sets the gates for the second.

09 The method, and what comes next

Every number traced to where it came from.

Each input is marked measured (from your files), research (from the 228-seller study), stated (by you) or modelled (our default, which you can replace).

Valuation
Committed now = Σ (gross profit × outcome − running cost) ÷ 1.12^t − upfront Staged = pilot result + value of scaling, only where the pilot's read says it pays Option value = staged − committed now (2,000 draws, 3 years, quarterly)

Each request's outcome is drawn around its sponsor's own estimate, with a spread set by how much is known. A pilot reveals the outcome with some noise, so a gate can be wrong in either direction; the model counts both.

Inputs and sources
What this sample is and is not

Northfield is fictional, so every figure here is illustrative. The structure, the formulas and the source of each input are exactly what a client receives. Values are expectations with wide ranges; the verdicts hold across the reasonable range of the inputs, and the open model lets your team test that themselves.

Start where Northfield started

One file. Five business days. No fee.

The Read comes first. If it finds economic profit worth more than the next engagement costs, we go deeper. If it does not, we say so plainly.

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