Calculating ROI Should Not Be Overwhelming

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Undoubtedly, economic uncertainty causes executives to question the value of their organization’s projects and programs even more. Often, this request includes the ROI. If executives perceive a particular program or project as a cost, then they will control it, eliminate it, pause it, or maybe reduce it. Consequently, if this program or project does not get supported, our influence is diminished, and yes, our funding is curtailed. However, if executives perceive the activity as an investment, they are willing to protect it, enhance it, or increase it; and this will allow you to have more influence, enjoy better support, build better business partnerships, and yes, protect the budget.

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Proving the Value of Soft Skills

The challenge is to evaluate major soft skills programs, such as leadership development, culture, or change management at the impact and maybe even the ROI evaluation levels. Although interest in showing the value and measuring ROI is now heightened and much progress has been made, most learning and development professionals do not know how to measure their soft skills programs at the impact and ROI levels. Unfortunately, the perception of calculating ROI is that it is too complicated, time-consuming, and may cause the staff to become overwhelmed. Additionally, many fear the potential for negative results. How can we minimize this? Five specific actions will help:

  1. Be selective. Select only projects and programs that are very expensive, strategic, consume many resources, or attract a lot of executive attention to measuring Level 5—ROI. This is usually about 5-10% of your programs annually.
  2. Share the load. Conducting an ROI study should involve not only the evaluation team but every stakeholder. Each person has a role in designing the program, collecting data, and participating in the analysis to drive business results.
  3. Design for results. Start with why, and the “why” is your business measure. Next, select the right solution to improve the business measures. Then expect success and use that expectation in the form of objectives to design for the results.
  4. Be proactive. Don’t wait for the request. Drive the evaluation initiative and don’t let executives drive it. When an executive requests ROI unexpectedly, the timeframe for results will be short – causing you to react defensively. You want to keep evaluation on your agenda so you can control the process.
  5. Be resourceful. Utilize the many tools, templates, and technology related to the ROI Methodology® to help you be successful. It is possible to conduct a successful ROI evaluation on almost any budget.


The ROI Methodology is a scalable and systematic approach to program evaluation. Using a process model, five-level framework, and operating standards to capture performance metrics from simple satisfaction scores to the financial impact, the methodology enables you to collect appropriate data to report the performance of various initiatives and program types. The ROI Methodology generates both qualitative and quantitative data. It provides techniques to isolate the effects of the program from other influences – resulting in credible metrics and ROI reports accepted by financial executives and stakeholders.

With over 6,000 organizations using this process, the ROI Methodology is the most used and implemented evaluation system in the world. The ROI Methodology provides the capability to evaluate program performance and improves the design of programs for optimal impact. A focused, proven, and practical approach – the process is grounded in conservative standards and a cost-effective approach to evaluation.

When an organization implements the ROI Methodology, the concern about the value or payoff of this approach becomes an issue. This process, when used properly, is a functional shift from activity-based to results-based. The activity-based approach focuses on developing programs, counting people involved, and reporting data about activities. The results-based approach requires that programs begin with the end in mind with very specific business measures. It also involves a continuous focus on results throughout the process and creating expectations from all involved to deliver the results. These results include data that are CEO and CFO-friendly.

This shift is often met with resistance from those who are involved in the process. This approach requires program designers, developers, facilitators, and coordinators to think about accountability early and often, and shifts how programs are deployed. For example, it requires them to develop objectives at the application and business impact levels. Thus, the investment in ROI implementation becomes significant, not only in direct costs but also in time and efforts. Sometimes, this is perceived as extra work by the learning and development team instead of an opportunity to show the connection to business value. So, the obvious question is, “Is this worth it?” Although most executives suggest that this approach is necessary, and the “ROI on the ROI” is not needed. However, it is a helpful and recommended exercise.

Programs are evaluated in a variety of ways, and few accepted standards, rules, and processes exist to validate those assumptions and claims. Following a systematic process with conservative, accepted standards (such as those presented here) can create a credible story of program success.

Headshot of Jack Phillips
Jack J. Phillips

Dr. Jack J. Phillips is a world-renowned expert on accountability, measurement, and evaluation. He is the chairman of ROI Institute, Inc., which provides consulting services for Fortune 500 companies and major global organizations. He is the author or editor of more than 100 books and conducts workshops and presents at conferences throughout the world.

Jack has received several awards for his books and work. On three occasions, Meeting News named him one of the 25 Most Powerful People in the Meetings and Events Industry, based on his work on ROI. The Society for Human Resource Management presented him with an award for one of his books and honored a Phillips ROI study with its highest award for creativity. The American Society for Training and Development gave him its highest award, Distinguished Contribution to Workplace Learning and Development. The International Society for Performance Improvement presented Jack with its highest award, the Thomas F. Gilbert Award, for his contribution to human performance technology. In 2019, Jack, along with his wife Patti P. Phillips, received the Distinguished Contributor Award by the Center for Talent Reporting for their contribution to the measurement and management of human capital. His work has been featured in the Wall Street Journal, BusinessWeek, and Fortune. He has been interviewed by several television programs, including CNN.

Jack regularly consults with clients in manufacturing, service, and government organizations in 70 countries around the world. He can be reached at

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