How Do You Calculate ROI?

 

Return on Investment (ROI), or the measurement of how effectively something will pay for itself, is a classic business metric.  The calculation defines gain in financial terms.

In today’s world, financial measures alone are too narrow . Revenue, profit, productivity, etc. are only part of the picture. We need to consider intangible returns - gains in learning, brand authenticity, and cultural improvement, for instance, which make a bigger difference in the long run. 

Never being one for convention, I’ve been experimenting with variations on the ROI theme, namely, the idea of ROImpact  (ROIm).  ROIm is how I decide which projects to take on and which to decline. It is a qualitative and quantitative metric of intangibles and tangibles.

If the cost (ImCost) is the amount of time a project will require, the impact (ImGain) is the assessment of organizational gains in terms of:

  • Culture: an innovative, interdisciplinary, authentic and diverse mindset that encourages solving customers’ pains through experimenting-learning-applying and iterating which, by the way, helps the company attract, develop and retain great talent that views giving back as joyful privilege; resulting in...
  • Customer Value: delighting customers with meaningful solutions that meet real needs within the customers’ contexts and constraints; perhaps even creating new markets and industries.

The result? An increase in revenue and profits without sacrificing culture and values . I have seen this time and time again with my own clients.

Unfortunately, many organizations still believe ROI and ROIare either incompatible or unrelated. This is false. Focusing on ROIm means focusing on outcomes, which results in improved ROI, the outputs. An organization that has maximized its ROIm has a more open and innovative mindset, understands customers’ real needs, gives employees opportunities to experiment, learn, apply, and iterate and is in the best possible position to provide value to customers, create jobs and give back to its community.

The result of combining ROIm with ROI is a virtuous cycle that returns gains in both investment and impact .  What do you think? Am I crazy? Well, of course! But the results sure aren’t. 

The Power of Perspective and Its Impact

Thank you Molly Cantrell-Kraig for asking me to share my story on Women's Impact Movement. Your founding of Women With Drive has impacted so many!

"When I got married, my mom told me, “Don’t start doing the things now you don’t want to do for the next 40 years.” I’ve taken this advice to heart in so many areas of my life, discerning the trade-offs between today and tomorrow. It helps me understand what it means to leverage all of one’s gifts and channel everything learned into a path that is uniquely your own." Read on.

The Energy Efficiency of Trust & Vulnerability

Note: Carl & I met at BIF9. As usually happens, a beautiful friendship and collaboration ensued.  Our conversations are like jazz...live, interactive, impromptu.  Eavesdrop on one here... 

Photo: Stephanie Alvarez Ewens

DMS: At BIF, you performed before an audience of over 400 people with two musicians you’d barely met before.  It was fabulous – resulting in BIF’s first encore!  The three of you had a common goal – a great performance.  You had aligned incentives – to create great music and not make fools of yourselves. This got us talking about trust – trusting people because of who they are personally vs. who they are professionally.

CS: Yes, I didn’t need to trust them personally, just professionally. If I’m going to fly, I have to trust the airline to have sane, sober, skilled, alert pilots.  We also need to trust systems.  If I have to go to the ER, perhaps a bad one is better than none.  If the alternative is worse, we might opt for no trust.  How much we need to trust others depends on the context, but also on how much we trust ourselves, our own resources and our ability to understand the context we are in; the more information and/or experience we have, the better we can decide whether or not to trust.  Trust is a tool to assess and manage (reduce and/or increase) risk, depending on the situation.

How much we need to trust others depends on the context, but also on how much we trust ourselves, our own resources and our ability to understand the context we are in

DMS: Trusting someone implies making oneself more vulnerable and finally it seems the world is recognizing that is what it takes to create great leaders.  Trust has big implications on our resources, as you’ve said.  When we don’t trust, we exert a lot of energy to keep up our guard, to continually assess and verify.  This uses a lot of energy and time.  When we trust, we re-allocate that energy and time to getting things done and making an impact.  As we let ourselves be vulnerable, we also leave ourselves more open to new ideas, new ways of thinking which leads to empathy and innovation.

Photo: Stephanie Alvarez EwensCS: Absolutely.  When we trust, we reduce hassles, bargaining and redundancy.  The more information and/or experience we have, the fewer buffers we need around our decisions and the more we can focus on the scope and achievement of our goals. Being vulnerable is a way to preserve energy.  Basically, we are saying, “I won’t use resources on this because the pain of being vulnerable ‘costs’ less than the cost of NOT applying my resources elsewhere.”  For instance, choosing an instrument (or a profession) is a kind of vulnerability. No instrument can play everything.  To create great music you need an ensemble — a trio, quartet,  basically a team of players with complementary strengths, skills and vulnerabilities and a willingness to listen to each other and a common goal.

When we trust, we re-allocate that energy and time to getting things done and making an impact.  As we let ourselves be vulnerable, we also leave ourselves more open to new ideas, new ways of thinking which leads to empathy and innovation.

DMS: Trust and vulnerability are keys to “Energy Management”. Not to sound too 19th or 20th Century, but trusting is efficient….and effective.  It lets us reallocate our resources to what matters and utilize our skills and those around us to increase effectiveness…impact.  Energy Management raises the issue of perfection. If we are working together, we need to agree on the meaning of ‘done’.  When are we done, what does that look like? And that’s in the eye of the customer/audience.  So we need to understand customers’ needs and how well we can meet those.   We need to recognize that ‘good enough’ can really be good enough.  The Lean Startup movement encourages a Minimal Viable Product (MCP), building what’s critical and leaving the non-critical for a later.  My daughter says, “Don’t let perfection be the enemy of accomplishment.” Growing up in Bell Labs, I saw the need to know and control everything hold us back from realizing value.  Your wife’s phrase, “Control is for Beginners” is so a propôs.

CS: Knowing when to stop is key.  Strategic sloppiness is a way to preserve energy.  Don’t line up the boxes, disregard the typo’s, narrow the scope – Simplify!  The use of shared references is a big part of this.  Build on the same shared mental models (e.g., Peter Senge); use the same language (e.g., Hanna McPhee: Design & Science); make sure we hear and see the same thing (reduce buffers around our response); allow for larger margins of error in our response and our acceptance of others. This is especially true when we are working in real-time, where higher perfection slows down the tempo.  We have to eliminate anything that slows us down, which forces choices in real time. Think of when we’ve been on a stage giving a presentation (or running out of a burning building).  If we can´t think of a specific word, we skip it and make something up — we lower the bar as much as we can.  Being live forces us to be flexible, like a nerf ball instead of a steel ball. If we are too hard, we are still vulnerable because we will crack, not bend and flex and live.

DMS: We can’t minimize the need to be effective.  So much of the 20thcentury’s focus on efficiency over effectiveness ended up being inefficient!  If the outcome didn’t meet customers’ need, who cares how efficiently it was made?  Efficient systems are great at dealing with complicated things – things that have many parts and sequences, but they fall flat dealing with complex systems, which is most of world today. At BIF8, Brandon Barnettgave a great story about the difference between complicated and complex. Effective solutions to wicked problems rarely come about through efficient and linear thinking.  It’s usually messy… and increasingly effective.

CS: The Industrial Revolution was based on achieving efficiency by scale through replication – a frozen goal in a static context.  This led to managing people and machines as one and the same — striving for uniformity/conformity, precision, low deviance, repetition, predictability and static, strict standards.  Things could be complicated but not complex (because they were static and not interconnected).  Now, easy, repetitive tasks are being de-bundled and out-sourced or automated which speeds things up, from months to weeks to minutes. Add to this that more and more interfaces are standardized and subjected to competition (per Clay Christensen) and we are seeing an emerging alphabet — components that can be assembled in endless combinations as manifestations of unique ideas.  As the ability to replicate something has become more of a commodity, we are increasingly seeing that complex interactions are the way to create ‘value from difference’ (as opposed to ‘value from sameness’).  But again, the complex interactions require judgment, intuition, data, timing and experience.  Technology does not do much in a complex interaction (per McKinsey´s articles on interaction).

Trusting is efficient and effective.  It lets us reallocate our resources to what matters and utilize our skills and those around us to increase effectiveness

DMS: Which is why ‘soft-skills’ are so critical in our complex world.  The ability to look at things from many different perspectives, to discover, uncover, understand and empathize is critical.  While everyone says the Millennials are forcing businesses to focus on meaning and purpose for work (outcomes) instead of just money and profit (outputs), I think we’ve always wanted this, just haven’t vocalized them for a variety of reasons. This brings us full circle back to trust and vulnerability.  When we have a common goal of WHY we want to do something, we are better able to trust.

CS: That’s why complex interaction workers are the fastest growing and the best paid part of the labor force.  The Jazzcode governs how we can improve the effectiveness of these workers.  When we never do the same thing or have the same conversation twice, it becomes much more important to figure out why and what we do than how we do it (process, which is a given).  Personal leadership and character become more important.  As work moves from executing scripts to interactive conversations, the need for active listening and presence in the moment is increasing.  We have to challenge the industrial culture in our work places to enable people to have better interactions. Only then can we get the true potential for original ideas and real collaboration.  It is in the give and take of a conversation, which is needed in complexity, that understanding happens.  Just like playing jazz.

DMS: And, just like jazz, the conversation continues…

This originally appeared in Switch and Shift.

Changing One Thing Changes Everything

Many of you are now familiar with the wisdom of my friend Jessica Esch.  Her posts on this blog always get a ton of hits.  I thought it was time you learned more about her, and how that could impact your organization...read, learn, and answer her question.
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In 2011, I pitched a new job at my old job and became a full-time illustrator and storyteller for a non-profit. I founded United Way of Greater Portland’s LUbrary—the LIVE UNITED storytelling library—and forever fused my personal and professional lives.

My job was to distill complexity and draw people into the organization by explaining the issues, describing the work, and highlighting the great things happening in our community.

It was all good in theory.

But telling stories was the easy part. Having them seen and heard was more challenging. Content strategy became my job too. And then it started to take over as I became responsible for crafting engagement strategies to show others internally and externally how our stories could support their work.

Seeing the world differently is not the same as changing it. It can be lonely, frustrating and a little like climbing Everest without a Sherpa.

So I wrote about it.

I wrote it all down because I knew I was onto something. I knew that how you engage online could impact behavior offline in the physical world.

I needed allies.

I needed to find my tribe.

I uploaded Online Affects Offline: Learnings From the Field to Flickr using sets as chapters on July 4 as a declaration of my independence. I've chosen to let people read it for free because I need their attention more than their money. It covers my love of social media and obsession with photo management to the lifecycle of events and what it is like to try to change an organization from the inside. It’s a work in progress as well as a beacon for my tribe.

Are you my tribe?

Read Jessica's book here: http://bit.ly/onlineaffectsoffline

Find Jessica here: Twitter (@jesch30), Facebook, Website

 

 

Dancing Your Way Through A Revolution

Again I'm privileged to host the insights of an 21yr-old - Emily Goldman (Brown '14) gives us life-time learnings on discernment, judgement, critical thinking and getting the facts for yourself.  She has been studying Arabic and the impact of local rap movements on the revolution in Alexandria, Egypt for the past year - just your average American Female Jew in Egypt!  Read and re-read this - it has profound implications on how we view the rest of the world, and our place in it - especially in light of the recent NSA revelations.
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I have always been a little weird. When I was younger, I used to obsess over one topic and learn everything about it—anything from Lucille Ball to the Brain Trust— and then get bored and move on. My mom called these cycles “phases.” One of the longest “phases” was my revolution phase at the beginning of high school. I had just learned about Che Guevara and the Latin American revolutions in history class, and was immediately enthralled. I read everything from biographies of Che to theoretical texts about Latin America’s liberation movements. I was captivated by this idea of a “revolution”ion in Development Studies"t STude to dig deeper as i  about revs in a general sense. I expected you to be like " and decided to feed my curiosity as I began my academic career at Brown University. I am a Development Studies concentrator who began with a focus on Latin America, then Social Entrepreneurship, and now Egyptian Hip Hop. Looking back, I think I might have been revolution hopping. During my first three years of college, I reveled in the way that phrases like “postrevolutionary state” and “direct foreign investment” rolled off my tongue. Armed with a hefty political science vocabulary and my slightly obsessive self-study, I felt that I truly understood what it means for a state to have a revolution. Wrong.

Inspirational graffiti in the city of Luxor about resisting tear gas and trying to build the country anewWhen I moved to Egypt in January, there were some things that I noticed: traffic is insane and has no rules, there are no taxes in daily life, the electricity sometimes goes out, there are checkpoints on the roads in Cairo run by civilians, the police often decide to go off duty (especially when they are threatened with actually performing any duties), and Fridays are protest days. After about a week, I got used to all of these things. One thing that I absolutely could not get used to, though, was the media.

I had been living in Alexandria, Egypt for about one month when I was watching TV this one Friday afternoon. When I turned on the TV, the correspondent was announcing widespread violence in Alexandria and a march down the street next to the seaside. My host family was traveling at the time, and my host mom called me: “How is Alexandria?” she asked, panicked. I peered out my window, looking onto the road where all of the violence was supposed to be, and saw absolutely nothing besides some stray cats playing in the garbage can below my window. Convinced I must be wrong, I called a friend in a different part of the city. “Are there violent demonstrations today?” I asked him.

“No,” he told me, “There was a peaceful march near the train station this morning, but that is seriously all that’s happened in Alexandria today.”

That night, my mom called me from the US. “Are you ok?” she asked, “I heard there’s been a lot of brutality towards women in demonstrations and that there were a lot of demonstrations today.”

I reassured her and, upon talking to a friend who works for a women’s rights group in Cairo, found out thatEmily dancing outside a temple the brutality article was published in the New York Times. According to my friend, the real story was not protestors harassing women but instead policemen harassing female protestors. While all of this conflicting information is confusing and annoying, it still leaves one essential question to be answered: who should I believe? Should I believe the news that tells me that people are attacking each other outside my house even when I can look out my window and see a totally different reality? Should I believe the New York Times correspondent when my friend who was actually at the event tells me that the correspondent got the story wrong? I choose to believe what I see with my own eyes and ears. But what about people like my family who can’t get this information first hand? What about the ENTIRE AMERICAN PUBLIC that, thanks to the media, thinks Egypt is a lawless and—to borrow a word from my Development Studies classes—“postrevolutionary state?”

“The media won the revolution” is a refrain echoed throughout Egyptian society these days. As anger at President Morsi and the Muslim Brotherhood boils, I am discovering that it is an amazing time to be a researcher of Hip Hop, an art form that has given the finger to the media time and time again. My research in Ticket from Emily's first Egyptian rap concertEgypt focuses on Egyptian rap and its role in politics during and after the revolution. Both the rappers that I work with and the music that they make refuse to fall into the media categories of “smart/dumb,” “religious/not religious,” “revolutionary/not revolutionary,” etc. The Egyptian rappers refuse to deal in these binaries. These rappers are incredible, multidimensional people who refuse to let the revolution, society, or anyone else silence them.

This morning I met with one of the earliest Egyptian rappers, a guy in his thirties who I will refer to as S. I hopped on the back of his motorbike and we took off through the Alexandria rush hour traffic as he shouted over his shoulder to me about everything that got worse in Alexandria after the revolution.

“What do you think of the traffic?” he bellowed over wind as we weaved dangerously between stopped cars along the seaside road.

“Um, well….” I stuttered, trying to formulate a response that was not offensive but also truthful.

“HA,” he responded, “Not like America, huh? Honestly, Egypt was not like this even three years ago.”

Over the course of the next three hours, our conversation meandered seamlessly from the politics of Egyptian rap to the influence of the Muslim Brotherhood on artistic expression to the intricacies of the Egyptian stock market interest rate fluctuations. S, like many other rappers and Hip Hop artists I have gotten to know here in Egypt, is brilliant. He speaks four languages fluently, is getting his Master’s degree in Development Economics, writes and produces his own music, and cannot find a job. He does not rap because he has nothing better to do or because he thinks it makes him look cool, but rather because he has something to say.

“The Egyptian people have a problem with being afraid of expressing themselves, “ he told me as we strolled along the sea, “Maybe it is left over from Mubarak or something, but we rappers, we don’t think about these things. We just say what we think.”

That is exactly why I choose to work in Hip Hop both here in Egypt and in the United States. In the US, I work with Hip Hop 4, an organization that I co-founded in my sophomore year with another Brown student named Pierre Arreola. Hip Hop 4 uses Hip Hop as a tool to provide character building in after school activities for underprivileged youth. The idea came from our observation that kids in underprivileged neighborhoods have infinitely fewer opportunities to express themselves artistically or otherwise. I would say that the same goes for Egyptian youth who suffer because of high levels of education, low levels of employment, an increasingly oppressive Muslim Brotherhood influence, and a crashing economy. So, in a way, Egyptian rappers are doing the same work as Hip Hop 4. They are modeling frank and public self-expression by refusing to let the political, societal, and media obstacles get in the way.

On our way back home from our seaside conversation, the police stopped S and me. The policeman was tryingView from a friend of Emily's countryside home to give a taxi driver in front of us a ticket for blocking the road. The policeman took down the taxi driver’s license plate number at which point the minibus driver next to us hopped out of his van and told the policeman, “You can write whatever you want, but he is a taxi driver. This car does not belong to him. If you want him to move, you have to MAKE him move.” He then leaned down into the cab and screamed in the taxi driver’s face until he moved his cab out of the way.

That is Egypt right now. If you want to get something done, do it yourself, make it happen. As harsh as that might sound, it actually makes me feel safe in my daily life because there is an incredible sense of unity, of Egyptians helping Egyptians to make it through this hard and confusing time. I have met unparalleled kindness and selflessness here every day. I have been embraced as an American, a Jew, a female, and every other part of my identity that I was afraid of revealing based on stereotypes I had heard about Egyptians before I came. When I walk outside every day, I don’t see a country plagued by senseless violence like the media wants me to, but rather a country still yearning for change. I am not afraid to be here and I refuse to let the news sources bully me into fearing a country and culture I have come to know and love. However, I would like to ask one thing of my fellow Americans: Do not assume that what you hear about Egypt from the media is true. Please use your judgment and think critically about what you hear about this country and the Middle East in the upcoming years. Most importantly, let’s take a cue from the Egyptian rap community and remember that people are not one-dimensional characters, but instead complicated beings with the natural urge for self-expression. Egyptians may be demonstrating against President Morsi each week, but they are also finding ways to prop each other up and protect each other from the difficulties in this postrevolutionary period.

How to Have an Impact without Electricity and the Internet

This is a guest post by Kona Shen, Founder of GOALS Haiti, mentioned here.  What she has done for youth and their families in Haiti demonstrates courage, compassion, purpose and leadership savvy few CEO’s of any age possess.  Kona shares the starkly different definitions of ‘basic needs’ between the USA and Haiti and how it affects her productivity and impact…a lesson for us all!

Sometimes, when I get accused of being a workaholic, I laugh. I do work hard, but I don’t think I qualify. My schedule typically consists of a nine-hour workday, Monday through Friday. I don’t have internet on my phone, don’t work on projects late at night or on weekends, and almost always take a real lunch hour.

Mostly this has to do with living in Haiti. I began traveling to Haiti as a volunteer in 2007 and moved here in 2010 to launch an organization called GOALS. GOALS uses soccer to engage youth in public service and education that improve quality of life and develop new leadership. We’re up to 600 kids per month with a staff of 18 local leaders focused on long-term, community-driven development.

There are times when full-time electricity, internet, and air-conditioning would be nice. Most days, communications and logistics take more forethought and I can’t always be reached.  It took me a while to figure out what a meme was, and I can barely name any movie, song, or YouTube clip that’s been famous in the last two years.

Of course, I don’t want to minimize Haiti’s long-term infrastructure needs, including electricity and internet. But personally, I don’t miss the 24/7 access to power much. In Haiti, I read more books, do more yoga, write more essays, and cook more meals. I actually studied French instead of putting it off. Without the temptation of the internet and fewer gadgets, there seems to be more hours in the day.

In the U.S., electricity at night and streaming internet is usually enough to derail me. I find myself hammering out emails at 11PM on Sunday with the TV on and my phone lighting up with messages. Clearly, I don’t have the discipline to pretend that turning electronics on isn’t an option.

Why does it matter? Because, for me, more work doesn’t produce better work. It turns out, my light bulb moments come to me when I step back. I get so many new ideas out on walks or runs that I carry a pen to make notes. When I make an effort After Isaac: Cleaning out a kitchento do less, the truly important work gets done first, the biggest breakthroughs happen and GOALS is better for it. Best of all, I find myself looking forward to Monday morning instead of burning out before the week even begins. 

Notes:

GOALS Haiti just won Beyond Sport’s award for Best New Project.

2 Degrees of Separation? Last month, Kona was in San Francisco meeting Arnold Ambiel, Director of Operations for One World Futbol.  He suggested she get in touch with Deb Mills-Scofield. Not letting on, Kona asked how he knew me.  He replied that he followed me on Twitter but didn’t know me personally.  Little did he know we were already connected – through bonds of purpose, passion and our alma mater.