Week 11 Day 7: Assignment: Draw Your Team's Value Pyramid

Take 30 minutes this week to draw your team's Value Pyramid on a whiteboard or shared document. Label the three layers -- revenue, margin, overhead -- with the specific details of your business. Then share it with your team and ask one question: 'Which layer does most of our current work live in?' The answer will reshape how your team thinks about priorities for the rest of this course.

Here is the step-by-step process. First, draw the pyramid and label the three layers. For the revenue layer, list every way your product or business unit generates money. Be specific -- not 'subscriptions' but 'monthly subscriptions at three price tiers, annual contracts, enterprise custom deals.' For the margin layer, list the variable costs of serving each additional customer. Hosting costs per user, payment processing fees, support ticket costs, bandwidth. For the overhead layer, list the fixed costs that exist regardless of customer count. Team salaries, tools, office space, compliance costs. Second, calculate rough percentages. What percentage of your team's time in the last month went toward work in each layer? Third, share the pyramid with your team. Do not lecture -- present it and ask questions. 'Does this match your understanding?' 'Where do you think we should be spending more time?' 'What overhead work could we reduce or eliminate?' Fourth, keep the pyramid visible. The Week 1 exercise asked you to write down who you actually are as a leader. This exercise asks you to write down how your business actually works. Both are acts of clarity that make everything else easier. Starting next week, we build on this foundation with business literacy as a leadership tool -- teaching your team to think like owners, not just operators.

The Value Pyramid assignment draws on the pedagogical principle of constructivism (Piaget, 1967; Vygotsky, 1978), which holds that learners build understanding most effectively when they construct knowledge actively rather than receiving it passively. By having leaders draw and label the pyramid themselves, the exercise forces articulation of tacit business knowledge -- a process Nonaka and Takeuchi (1995) identify as the critical bottleneck in organizational knowledge creation. The team discussion element leverages what Wenger (1998) calls 'communities of practice' -- the idea that shared understanding emerges through collaborative sense-making rather than one-directional information transfer. The instruction to keep the pyramid visible aligns with research on environmental cognition (Kirsh, 1995), which demonstrates that external representations reduce cognitive load and improve decision-making by offloading information from working memory to the physical environment. The cross-reference to Week 1's self-awareness assignment is structurally deliberate: just as self-awareness requires externalizing internal assumptions about identity, business clarity requires externalizing internal assumptions about value creation. Both exercises follow the same pattern -- make the implicit explicit, then use that clarity as a foundation for better decisions.