Return on Investment & Other Dramas

[This is a reprint from the ACT-KM list a couple of weeks ago - prompted by posts from Patrick Lambe & Joe Firestone]

People rarely say what they really mean. A senior executive will say: "Give me the ROI for KM" when they often actually mean is: "I do not understand this activity or what you do - prove it in a default language that I understand & feel comfortable with".

Now to be blunt, the numbers most ROI calculations come up with are baloney. But they grab attention. The Accenture book 'Return on Learning' demonstrates this (in my opinion). Accenture's training department had to justify their existence & they put together a rigorous case that indicated that every $ spent on training generated $3.5 in extra revenue (in terms of improved productivity, greater retention).

The $3.5 number is just bait. But in putting this together they identified what the drivers were that they impacted. Which led to an interesting dicussion about the role of & future for training.

The other observation I would make is that managers portray their organisations as rational entities driven by calculation. Sometimes they are, and the further you get away from the front line then that's all you are left with - the numbers. But the dirty little secret is that organisations are run as much on perception as on analysis. If all your subordinates (and indeed your superiors) tell you that something is the bees knees then you don't tend to ask for numbers - unless everyone is in the proverbial.

Which is where a technique like MSC comes in - it makes the outcomes from an initiative real for people. It allows executives to feel the value. "This stuff is important for my people & it makes them more effective in these concrete ways".

So some conclusions:
- You can't just tell people, you have to show them.
- You have to have the numbers (as the invitation to the dance) but people have to feel them.

So if someone asks you for ROI:
- Think about the measureable bits of the business that you impact.
- Find some data that shows you might conceivably rock.
- Get your foot in the door & take the listener on that journey.
- Ensure that while you are doing this, people are feeding your key stakeholder lots of examples of where you have actually rocked.

Can anyone come up with examples of where they have done this?