Estimate the Cost of the Performance Leak
You have now examined the same performance challenge through all six JL³ Performance Levers and documented what you are seeing.
Now use that evidence to estimate what the unresolved problem may be costing in lost time, rework, delay, duplication, or avoidable effort.
Loading your saved performance situation…
As you estimate the performance leakage, stay anchored to this same situation. Estimate only the time, rework, delay, duplication, or avoidable effort reasonably connected to this challenge.
Watch the Performance Leakage Lesson
This lesson explains how to estimate lost time, rework, delay, avoidable effort, or capacity drain without overstating the case.
Read the lesson transcript
Now that you’ve worked through all six Performance Levers, the tool is going to help you estimate the potential cost of the performance challenge you selected.
This is not meant to create a perfect financial analysis. You don’t need payroll reports, finance approval, or exact operational data to complete this section today.
The purpose is to create a conservative directional estimate.
In other words, we want to get closer to the business impact of the issue instead of leaving it at, “This is frustrating,” “This is slowing us down,” or “This is creating problems.”
At the top, you’ll see the performance challenge you entered earlier. Take a second to reread it and make sure you’re still estimating that issue, not every related problem around it.
You’ll also see the primary lever and secondary lever identified from your responses. Those are not meant to be a perfect diagnosis. They are meant to help you see which workplace conditions may be contributing most strongly to the issue.
Now we’ll move into the cost estimate.
The first field asks how many employees are directly affected by this challenge.
Be careful with that word directly.
This does not mean everyone who is annoyed by the issue. It means the people whose work is meaningfully slowed, interrupted, corrected, repeated, delayed, or made harder because of this challenge.
If the issue affects one team, or if the affected employees have reasonably similar time loss and compensation, the simple estimate is usually enough.
If the issue spans multiple teams or workgroups and the impact differs meaningfully across them, use the team breakdown option on this page. That lets you estimate each group separately instead of forcing unlike groups into one average.
For example, operations may lose several hours a week to rework while customer support loses less time but touches the problem across more employees. Managers may also have a different compensation level. In that situation, estimate each workgroup on its own and let the tool roll those estimates into one total.
You do not need to break the estimate apart just because more than one team is involved. Use the detailed option when the differences are large enough that averaging would make the estimate less credible.
The next field asks how many hours per week each affected employee loses because of this challenge.
If you are using the simple estimate, use a reasonable average for the group you counted. If different workgroups lose very different amounts of time, switch to the team breakdown and enter those estimates separately.
One team may lose five hours a week because they are deep in the rework while another loses one hour because they only touch the issue during handoffs or escalations. The team breakdown prevents you from applying the highest number to everyone or flattening meaningful differences into one average.
Lost time may include rework, waiting, searching for information, correcting mistakes, clarifying expectations, duplicating effort, handling preventable escalations, sitting in extra meetings, or working around a process that should be easier.
Do not estimate based on frustration alone.
Ask yourself: if this issue improved, how much time would the affected employees realistically get back in an average week?
If you’re unsure, stay conservative.
For example, if you think the issue may cost someone two to three hours a week, enter two. If it varies across the team, use a reasonable average. The goal is not to make the number dramatic. The goal is to make it credible.
Next, choose the compensation input you’re using.
You can use average hourly wage if that’s the easiest number to estimate. If you know an average salary instead, you can choose salary, and the tool will convert that into an hourly estimate using 2,080 annual work hours.
Use the best number available to you today.
If the affected employees have reasonably similar compensation, use a reasonable average for the group you counted.
If the issue crosses workgroups with materially different compensation, use the team breakdown. For example, if the issue affects frontline staff, supervisors, and support employees differently, enter each workgroup separately rather than using the highest salary or an artificial blended number.
If you don’t know the exact wage or salary, use a reasonable manager estimate. You might use the midpoint of the role, a typical wage for the group, or an average salary for the employees most affected.
Again, don’t try to inflate the number. A conservative estimate is more useful than a dramatic number.
Then enter the average wage or salary amount.
If you’re using hourly wage, enter the hourly rate. If you’re using salary, enter the annual salary. The tool will handle the conversion.
The next field asks how many weeks per year this challenge meaningfully affects work.
The default is 52 because many performance issues are year-round. But don’t use 52 automatically.
If this issue only happens during a seasonal rush, use the number of weeks it realistically affects the work. If it happens during quarterly reporting, onboarding cycles, annual enrollment, launch periods, or other predictable windows, estimate the weeks tied to those periods.
The word meaningfully matters here.
You’re not counting every week where the issue could theoretically appear. You’re counting the weeks where it creates enough friction to affect time, quality, service, capacity, morale, money, or momentum.
Finally, choose how well-supported the estimate is by the information you have.
This does not change the base estimate created from the assumptions you entered. It changes only the width of the directional range around that estimate.
If you’re using specific data from reports, payroll, time tracking, ticket volume, quality data, or operational metrics, choose High confidence. The tool will use a relatively narrow range around the base estimate.
If you’re using reasonable manager estimates or a mix of known data and informed assumptions, choose Moderate confidence. The tool will use a wider range to reflect that uncertainty.
If the information is limited or the estimate is still rough, choose Low confidence. The tool will widen the range further in both directions. Lower confidence does not automatically make the cost larger; it makes the possible range less precise.
The goal of this section is not precision theater.
The goal is to make the hidden cost visible enough that leaders can have a better conversation.
So as you complete this page, stay grounded. Use the best information you have and be conservative where you’re unsure. Use the simple estimate when one set of assumptions reasonably represents the affected group, and use the team breakdown when meaningful differences across workgroups would otherwise get lost.
That keeps the estimate credible.
And remember, even a cautious estimate can reveal whether this issue is just irritating, or whether it may be quietly costing the organization far more than people realize.
You Already Have Evidence to Work With
Throughout the six Performance Levers, you identified workload pressure, errors, delays, workarounds, competing priorities, repeated support, resource gaps, and other ways this challenge may be affecting performance.
Use those observations now. Your estimate should not come from a guess in isolation. It should be grounded in what you have already documented about how many people are affected, where time is being lost, and how the issue shows up in the work.
You do not need to include every possible cost. A conservative estimate that you can explain is more useful than a larger number you cannot defend.
Review Your Performance Research
Need to revisit something before estimating the cost? Open any lever below to review the observations you documented.
You do not need to reread everything. Use this section to check the evidence behind the assumptions you are about to enter.
Before You Complete This Estimate
Use the same performance challenge you selected at the start. Estimate the cost of the issue as it currently shows up in time, effort, rework, delay, or lost productivity.
- Use conservative numbers you would be comfortable explaining to a leader.
- Use the examples and estimates you identified during your lever reflections as evidence.
- Estimate time lost per affected employee per week, not total frustration.
- Count people whose work is meaningfully affected, including people in other teams if the problem crosses handoffs.
- If workgroups are affected differently, use the team breakdown instead of forcing unlike groups into one average.
- Choose the data quality level honestly. A reasonable estimate is useful as long as it is labeled correctly.
The goal is not to make the number impressive. The goal is to make the hidden cost visible enough that someone reviewing your Executive Brief can understand why this issue deserves attention.
Complete the Performance Leakage Estimate
Enter your best conservative estimate. Use the simple estimate when one set of assumptions reasonably represents the affected group, or break the estimate down by team or workgroup when the impact differs meaningfully across groups. The calculator will roll everything into one directional range and save it to your report.
Use Your Research, Not Just Your Instinct
Before entering a number, think back through what you documented. Where did you identify waiting, rework, duplicate effort, repeated questions, manual workarounds, overloaded employees, slow decisions, or priorities competing for the same resources?
Those observations are the basis for the estimate below.
Before you finalize this estimate: If this issue affects more than one team or workgroup, it may be worth checking with other departments before completing this section. A quick conversation can help you estimate the impact more accurately across handoffs, rework, delays, and support effort. If needed, you can save your work and return later to refine the estimate before your final Masterclass documents are generated.