The Bottomline on ROI: Conquer fear and harness the power of the bottomline

The Bottomline on ROI: Conquer fear and harness the power of the bottomline
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ROI, return on investment, is a metric fundamental to business and government alike. Executives and chief administrators recognize it, and business and operations managers appreciate it. Misinformation and misuse cloud the value of this simple yet powerful metric. Although ROI’s application in performance improvement, learning and development, and human resources is not a new concept, the literature and conference discussions surrounding it may create the impression that it is a novel and intimidating phenomenon. Understanding the ROI benefits and overcoming any fears associated with this metric can greatly improve your workforce.

In this blog, ROI topic expert – Dr. Patti Phillips – will discuss the origin of ROI and its importance in the business world.

Watch Dr. Phillip’s webinar to learn more about ROI
The Bottomline on ROI: How to Measure the Results of Your Training

The Origin of ROI

ROI’s use in learning and HR began in the 1970s when my husband and business partner, Jack Phillips, conducted the first ROI study on a cooperative education program. It has been used for years in quality and productivity training. In recent years, it has become a standard metric for many leadership development and coaching programs and other “soft” solutions. Yet the confusion around ROI remains.

Conquering ROI anxiety: Empowering success in the workplace

The core of this confusion lies in understanding when and how to employ ROI effectively and how to present it to highlight a program or project’s complete success. Fear and angst around ROI exist because, like most investments, a negative ROI is inevitable for misaligned and poorly implemented programs. On the flip side, if the ROI is extraordinarily high, fear exists that the results will not be viewed as credible. This fear is unwarranted if you use a credible approach to develop it, follow sound standards, and apply it consistently across all programs.

professional workers talking about return on investments on their laptop

Unfortunately, many prefer to heed the skeptics rather than delve into the subject themselves. We have published over 40 books with ATD and even more with other publishers, such as HRDQ Press, SHRM, Berrett-Koehler, McGraw Hill, and Wiley. These publications describe ROI’s use and importance in showing the contribution of programs and projects. Along with many conference presentations and workshops, they offer learning and development professionals opportunities to understand what ROI is, what it is not, and how to use it. Yet, many professionals still miss the bottom line.

The ROI benefits in the workplace

Proper ROI tracking in the workplace offers numerous benefits that can significantly impact an organization’s success. You will see its benefits once you properly learn how to track ROI.

the benefits of ROI

Here’s the list of benefits of ROI tracking can bring to your workplace:

1. Clear visibility into the effectiveness and efficiency of various programs and initiatives

ROI enables informed decision-making and resource allocation. By accurately measuring the return on investment, businesses can identify which projects or strategies yield the highest value and optimize their efforts accordingly.

2. ROI tracking promotes accountability and transparency

This tracking fosters a culture of continuous improvement and data-driven decision-making. It empowers leaders to demonstrate the tangible value of their initiatives to stakeholders, gaining their support and confidence.

3. Proper ROI tracking enhances organizational learning and development

Identifying improvement areas enables organizations to refine their strategies and drive sustainable growth.

By embracing rigorous ROI tracking practices, businesses can maximize their returns, drive meaningful outcomes, and create a more agile and successful workplace environment.

Embrace ROI benefits and learn more about proper tracking

By embracing ROI as a powerful tool, professionals can unlock its potential, maximize program effectiveness, and drive optimal resource utilization. It is time to grasp the bottom line and embrace the full ROI impact story. Reported alone, ROI describes the economic impact of programs, projects, and processes. Written in the context of other measures, it contributes to the complete story of program success and informs decisions about resource allocation.

Recommended Webinar

Are you interested in learning the method for measuring ROI accurately?

Watch this webinar to gain further insights on ROI benefits and tracking.

About the Author

Patti Phillips

Dr. Patti Phillips is a recognized expert in measurement and evaluation and president & CEO of the ROI Institute ⇗. She serves as faculty for the UN System Staff College, a Professor of Practice for The University of Southern Mississippi’s Ph.D. in Human Capital Development program, and a Principal Research Fellow at The Conference Board. Patti is an award-winning author and editor of numerous books and articles, including The Bottomline on ROI Workshop ⇗, The Bottomline on ROI 3rd Edition, Ten-Steps to Successful Business Alignment ⇗, Measuring ROI in Learning and Development: Global Case Studies ⇗, and Measuring the Success of Coaching ⇗. Dr. Phillips’ clients include Fortune 500 companies, federal and state government agencies, and non-governmental organizations.

“Related” Learning

Discover more HRDQ-U coaching skills blogs and webinars

Access more valuable HRDQ-U content by Dr. Patti Phillips

Explore HRDQ Store’s coaching skills training resources ⇗


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