Nearsighted ROI

July 27, 2008 by
Filed under: Leadership, People, Teamwork 

For most teams, there is plenty of room for improvement in terms of efficiency. Particularly in the larger shops, discussions of improvement usually get around to discussions of ROI, or Return on Investment. Unfortunately for most, two things usually occur: full lifecycle costs are not considered, and prioritizing alternatives to invest in becomes a game of minimizing the I rather than maximizing the ratio of R/I. It doesn’t have to be that way.

For any but the largest of initiatives, seeking to identify and monetize a measurable gain can be difficult at best. There are so many drivers that affect business results it is almost impossible to separate the wheat from the chaff, and any attempt to do so will likely result in an intractable debate based on different selected perspectives. Especially if the diverging positions are both scraping from the same barrel.

While bringing the whole discussion down to dollars is fraught with challenges, quantifying in other ways might make the job a little easier. Think of things that you can see around the office, things that can even be measured, and ask yourself whether an increase or decrease in any of these things would be a reasonable indicator of progress. Don’t think of Return on Investment, think more about Return on Interaction.

If there were a sudden upturn in defections to other companies, most of us would think of the ‘rats leaving a sinking ship’ analogy immediately, and that’s certainly not a good sign. What about the amount of time that people spend at the office, if you have flexible hours (this is one that, from my perspective, would have a curve that tailed off at both ends: 20-30 hours a week can be as unhealthy a sign as 60-70 hours)? Do people tend to eat lunch together or congregate after work, or even know each other’s name? Do they celebrate each other’s successes, help each other out with technical challenges? Do they e-mail or tweet people that sit right next to them, or take the time to talk to one another?

If we can buy into the notion that strong interaction and communication is one of the critical drivers for team success, all of these things we can observe here (and likely many more) can show us whether our initiatives are improving the situation or not. We don’t need Excel to tell us we are on track, and we don’t need to spend tons of money to see results. What we need to do is find the right ways to get our team together that resonates with the culture and inclinations that are already there.

Different groups will respond in very different ways. For one group, a technical lunch and learn can generate tons of interest in a different way of doing things. For another group, a slide show from somebody’s Far East vacation can be more productive. Give people flexible hours without a clear vision to drive them, and they might slack off, while a different group might latch on tightly and deliver miracles. Training might serve to give a group strong ideas to move forward with, but can be disastrous if there is no follow-through on the learning. Heck, you might even be surprised how well a genuine interest in the best interests of others can serve to bring a group together.

We need to focus at the right level to determine if the team is working well, and that focal point usually isn’t usually discerned from a financial equation. Be sensitive to the temperature of the team, and how well they work together, and there is a good chance that you can reap a strong Return on Interaction. – JB

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