“Data isn’t like your kids. You don’t’ have to pretend to love them equally.” This quote from Amanda Cox in the NY Times echoes the sentiments of the ROI methodology.
In the range of measurement possibilities for OD, return on investment is the Grand Poobah. ROI is a comparison of the actual cost of a project to its monetary benefits by using the same standard ratio that accountants have used for years to show the return on investment for a variety of investments.
Here are some benefits for measuring the ROI of OD projects:
ROI has a rich history of application.
The ROI Methodology is not a passing trend used in today’s organizations. It is a measure of accountability that has been in place for centuries. When resources are invested to address a business need, the ROI methodology shows the financial impact of the investment.
ROI speaks the same language of leadership.
Most managers in an organization have knowledge and skills on how to manage the business. Some have university degrees or even master’s degrees in business administration. These managers understand the need for a process to establish solid business cases and calculating a return on investment. They use ROI for a variety of projects and are fluid in carrying on conversations that measure the monetary results from large investments.
ROI generates attention among key stakeholders.
The positive ROI outcomes create buzz and attention, particularly when the ROI value exceeds expectations. Most stakeholders involved in organization development projects intuitively believe that the interventions add value. Return on investment, as a measurement tool, confirms this hunch using a credible and valid process.
ROI Methodology forces the issue of strategic alignment.
By following the steps in the ROI process, conducting diagnostics with the a multi-level framework for understanding business and performance needs, OD interventions will be more closely aligned with strategic and operational needs of the business.