ROI – looking in the wrong place for the wrong thing

I wrote such a long comment in response to HR Tinker’s recent blog on ROI, and then found that I couldn’t post it anyway due to some technical glitch – so here are my expanded comments.  I have seen all sorts of financial “justification” for investing in learning, and it’s part of my work, always, to demonstrate the value that I bring. On a daily basis sometimes.  So,  I get what you’re saying Tink.

There’s a famous story of a drunk standing under a street lamp carefully searching for something. A policeman comes along, asks him what he’s looking for, and the man answers, “My keys.” Now they both search. After a while, the policeman wants to know whether the man is sure that he lost his keys here. The drunk answers, “No, not here. I lost them back there — but there it’s much too dark to find them.”

In my experience, many decisions are made to “develop managers” based on a budget and a problem as opposed a systemic look at what is needed.  I think this is what drives the requirement for ROI because there are countless management development and coaching schemes which don’t solve “the problem”.

Here’s the thing;  I would like to see a more systemic approach to procuring/implementing management/leadership/engagement related interventions. I have been invited to undertake countless pieces of work because someone has a budget to spend.   I don’t look at my bank balance each month and think “right, how can I spend it all”.    I would like to see finance take a hard look at mindlessness that the budgeting process produces.  Many organisations won’t invest in that systemic piece, they have their budget and that’s what they will spend.  Thorough analysis of the whole system often brings an alternative solution which may cost less, but of course, may mean mind shift and redirection of effort from leaders.

I worked with an amazing FD once; the organisation had been lead by such tight financial control that no-one would take a decision.  two examples from that organisation:

  • The communications team’s printer broke.  The manager was told there was no budget to replace it.  So the hard copy news letter which was vital for tenant engagement, in theory couldn’t go out.
  • Someone was assaulted on the estate.  I got involved because there was a dispute between two teams as to who should put up the security fencing; it wasn’t their money – and vulnerable people were at risk.

The danger of the dominance the financial decision making lens,

In this organisation, the new FD’s message was – “you tell me what you need to spend and I’ll make sure you have the funding and I’ll manage the reporting.”   I was part of the leadership team for the time I partnered with that organisation; they had a pretty good idea of the maximum fees that would come from me, but I was left to get on and do what was needed in the broader brief, and not micro managed.

But despite the previous regime of tight financial management, people in that organisation were reluctant to take empowerment with the new leadership; they hadn’t learned to think for themselves, take risks or be able to develop a business case.  They waited, or left, or floundered.

Even the fact that we call it soft skills to me says that we don’t understand what it is we are dealing with – we use euphisms to mask truth don’t we.  Ooo Matron.

So I don’t agree that we should justify – because that’s a game.  I do think we need to understand more about meaning, about impact, about desired organisational behaviour that will deliver our business plan.

But I challenge the dominant paradigm of looking at all value being financial.
I challenge the reliance upon quantitative data

I challenge our need to separate hard and soft.

I suspect Tink we agree more than we disagree, but I think that the ROI piece is taylorism and we can keep trying down that route, but we’re not going to find the key.

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3 thoughts on “ROI – looking in the wrong place for the wrong thing

  1. Having read your blog and then Tinks blog I think a few of the points you make are the same, in particular, the focus on organisational change. However, can I challenge you to think outside Taylorism? Of course anyone applying this method is going to be screwed – there is enough research to validate that. However, I think ROI has it’s place – it’s the connotations that the term has that doesn’t. It’s a simple question really – what is going to add the most value to the end customer?

  2. I think you’re right, and thanks for taking the time to raise the challenge.
    My point ramblingly made can probably be simply made as this – if we only value what we can quantify financially, then we are just going down the same rabbit hole of frustration.

    1. I agree. If we just focus on the numbers it can also be very misleading. Where I’ve seen and experienced ROI working really well is when the numbers sit along side the stories. Therefore, I think, story telling is just as important, if not more so.

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