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Ten Straightforward Steps to Complete an ROI Forecast to Build a Better Business Case for an Unanticipated Learning Program.
Jack J. Phillips, Ph.D., and Patti P. Phillips, Ph.D.
This article was originally published on November 17, 2020, on ChiefLearningOfficer.com.
As a result of the COVID-19 crisis, many executives predict the global economy will be in a recession for most of 2021. When there is uncertainty, anxiety, or volatility in the global economy, there is a tendency to prepare for the unknown by having a tighter ship and leaner budget. This translates into significant budget controls and, consequently, budgets will be scrutinized and challenged. Many will face reductions and some budgets will even be eliminated entirely. Most learning and development professionals realize it will be difficult to secure the approval of programs and projects in the future.
But what happens if you have a definite need for a program, and no budget is available for new projects? There may only be one option to pursue: Show your executives the value the new program can deliver compared with the cost. An ROI forecast will show the monetary value of the proposed program compared with the proposed cost of the project. ROI forecasting is a critical tool for learning professionals, as program sponsors need evidence that the program will be successful before they are willing to invest in it.
In addition to budget approval, forecasting the outcomes may be important to ensure that adjustments can be made or alternative solutions can be investigated. This forecast can be simple, relying on the individuals closest to the situation, or it can be a more detailed analysis of the situation and expected outcome.
After the pandemic, organizations will require an ROI forecast before unexpected or significant projects and programs are approved or funded. Forecasting reduces uncertainty, and sponsors want to remove as much uncertainty as possible from projects and act on the best data available. Without data that shows your programs make a difference, it is difficult even to argue to keep the budget.
If there is a significant positive value-add, it may convince executives to move forward and implement your program, even if itโs unexpected. The challenge is to make a compelling business case, one that will convince even the most conservative executive or CFO to allocate funds for a new program. The key to successful ROI forecasting is to be conservative with analysis and credible with the conclusions.
Following is a series of straightforward steps learning professionals can take to complete an ROI forecast for a program that was not expected. This includes how to connect the proposed program to the business measures that will improve if the program is implemented and how the monetary value of the improvement is calculated. When the monetary value of the projected improvement is compared with the projected cost of the program, a financial ROI is forecasted.
Think chain of value
It is important to understand how success is achieved. How do you deliver more productivity or improve quality, increase retention, or reduce incidents? These are the measures needed for the forecast. They are improved by having the right solution implemented with the proper design and focus. The amount of improvement in the measures caused by the program can always be pinpointed. The success follows a chain of value, outlined below.
The approach
The approach to preparing an ROI forecast for your program involves several straightforward steps, which follow.
Step No. 1: Start with โwhyโ and connect to the business measure.ย The program should begin with the problem defined by a business measure or an opportunity defined by a business measure. The key is to understand why the program is needed. What business measure will improve if you implement the program? Pinpoint one or more business measures already in the system that should improve as a result of the program. This is absolutely necessary when forecasting the financial ROI.
Step No. 2: Make sure you have selected the right solution. If you are implementing a learning program, you need to make sure the program will drive the business measure. Determine how to improve the business measure by identifying the cause of the problem and explore various approaches to address the opportunity. This may involve questions, discussions, analysis, or benchmarking. The key is to make this connection to business needs.
Step No. 3: Expect success for the project.ย This involves developing objectives at four levels for how you want participants to make the program successful. These four levels focus on:
Step No. 4: Estimate the impact of this program on the business measure.ย Using the best experts, who understand the program (content) and where the people are working (context), ask them to estimate the impact on the business measure from this particular program. The experts may be the requestors for the program, the person who understands the need, the supplier or someone who has a benchmarking study.
Step No. 5: Adjust the impact for error.ย Using a simple question โ โWhat is your confidence in your estimate on a scale of zero to 100 percent?โ โ the error can be removed. That percentage is multiplied times the estimate, and this effectively reduces the number by the error in the estimate.
Step No. 6: Convert the impact data to money.ย The good news is for measures that matter to the organization, there are probably already monetary values available. If not, there should be experts who can help you with this value. Or you may need to use techniques such as standard values, historical costs or external databases.
Step No. 7: Estimate the cost of the program.ย Typically, this is easy to do. To be credible, the costs should include all direct and indirect costs. If in doubt, include the cost. This will ultimately enhance the credibility of the forecast.
Step No. 8: Identify the intangibles.ย The intangibles are measures that we cannot convert to money, credibly, with minimum effort. We choose not to convert these measures to money, but they are still important. They are measures such as teamwork, collaboration, image and stress. They are not included in the ROI calculation but are connected to the program.
Step No. 9: Calculate ROI.ย We suggest the two most common ROI calculations be used: benefit-cost ratio and return on investment, expressed as a percentage.
Also, perform a little sensitivity analysis by showing how the ROI changes with different estimates and assumptions.
Step No. 10: Present the results.ย The ROI forecast is presented to the management team to secure approval. Six types of data are presented as estimates (reaction, learning, application, impact, ROI and intangibles). The key is to use storytelling with data to make the case.
If the project is approved, be prepared to conduct a follow-up evaluation. It rarely happens that a forecast is presented and approval is secured without an actual follow-up ROI evaluation later. Ideally, you would like for the forecast ROI to be less than the actual calculated ROI. That will show that you are conservative in your analysis and you are on target with the process.
So, there you have it โ 10 simple steps to forecast the ROI. The concept of forecasting ROI is now becoming common in many organizations. We know several program managers who say they cannot implement a major program now unless they provide an ROI forecast.
Case study: customer retention program
Hereโs an example to illustrate how an actual ROI forecast is calculated.
This particular organization would like to reduce the number of customers who are deciding not to continue the annual service contracts and canceling their contracts. Participants of the program include the customer service staff, and the solution selected is designed to retain customers who are canceling contracts. The program focuses on teaching the customer service representatives a skill set to convince the customer to continue the contracts for another year. The forecast of the ROI is calculated in five parts:
1. Identify the unit of measure that will be improved by the program, such as one new customer, one absence, or one accident. In this case, the unit measure is one additional year on a contract. (See Step 1.)
Unit of measure: 1 additional year
2. Determine the value of the unit (V). This value can be found in organizational records or provided by an internal expert. Sometimes the value can be developed from external studies. In this case, the value of an annual contract is $121 average profit and was provided by the market research team. (See Step 6.)
V = $121 (average profit per year)
3. Determine how much improvement will be realized if this program is conducted (โณP). This estimate can be obtained from internal experts. In this case, experts suggest this program will result in an average increase of 14.6 one-year contracts per month after the adjustment for error. (See Step 5.)
โณP = 14.6 per month
4. Annualize the estimate for short-term solutions (AโณP). Most learning and development programs will have short-term solutions, and one year is used. If the program involves a long-term solution, is very expensive or conducted over a long period of time, there would be multiple years of benefits, but at least one year is used. In this case, one year is used and the annualized improvement is calculated.
AโณP = 14.6 x 12 = 175.2
5. Calculate the annualized program benefits from the program improvement.
AโณP x V = 175.2 x $121 = $21,199
The anticipated virtual workshop cost is $16,300. The ROI forecast can be calculated using the total projected benefits and the program costs, according to Step 9. The BCR and ROI are calculated using the standard formulas shown below:
Gaining serious capability in conducting ROI evaluations and ROI forecasting can prevent your budgets from being cut or, worse, eliminated. Recessions can have lasting effects on many organizations, not only in terms of keeping budgets in check but in demanding upโfront accountability before new programs are implemented.
Be proactive about forecasting and evaluation. Take on the challenge of building these skill sets to better position your programs and your organization for success in times of economic uncertainty.
For an example of an ROI forecast, including the follow-up evaluation, please contact ROI Institute atย info@roiinstitute.net.
Jennifer Wingate is the Communication and Research Manager at ROI Institute. Jennifer is skilled in managing all marketing and public relations campaigns and brand messaging. Before joining ROI Institute, she was a marketing professional working for companies like Encompass Health and Bradley Arant Boult Cummings for over fifteen years. She assisted Encompass Health with the national re-brand in 2019.
Jennifer is a University of Alabama in Birmingham graduate with a degree in communications management and mass communications. She enjoys spending time with her husband and puppies and hunting for antiques in her spare time.
Jennifer can be reached at jennifer@roiinstitute.net
Klaas Toes MSc, is President Global Business Development and Director, ROI Institute-Europe, and boasts over 30 years of hands-on experience in shaping human capital strategies, leadership, change, and sales for diverse businesses and governmental agencies. A prominent learning economist, Klaas emphasizes the importance of concrete data when determining business impact and ROI.
Klaas founded ROI Institute-Europe in 1998 enabling him to support the measurement and evaluation of tangible and financial values of learning for individuals and organizations. This venture was instrumental in laying the groundwork for people analytics in Europe.
By 2012, Klaas published De Waarde van Leren. As a well-respected voice in his domain, Klaas often shares insights via lectures and keynotes on various subjects including people analytics, business alignment, and ROI. In 2024 Klaas was co author of The Return On Investment for Training and Performance Improvement programs.
In 2016, Klaas’s expertise earned him a pivotal role as the European Council Director for People Analytics at The Conference Board, a position he held till 2021. He’s not just a thought leader but a successful entrepreneur in the fields of HR and Learning & Development, with his ventures impacting organizations on a global scale.
Andy Vance is Director of Client Relationships and IT Manager for ROI Institute. In his role asย Director of Client Relationships, Andy generates sales, implements marketing strategies, and maintains connections with clients and participants. In his IT Manager role, Andy maintains ROI Instituteโs technology infrastructure, produces virtual events, designing and updating webpages, and ensures online security.
Andy is a graduate of Phoenix Online University and has a Practical Project Manager certification. Andy also is a Glenwood Junior Board member a non profit dedicated to the support of adults and children with autism.
In his spare time, he enjoys hiking, camping, swimming, and building models.
Andy can be reached at andy@roiinstitute.net.
Hope Nicholas is the Director of Publications for ROI Institute.ย In this role she coordinates all publications, including books, articles, and case studies.ย Hope has significant experience with transcription, editing, proofreading, and project planning.ย Additionally, she contributes to multiple research and business development projects by facilitating communications and developing a wide variety of documents.
Hope is a graduate of the University of Akron and has over 15 years of experience working the field of healthcare administration and documentation. In her spare time, she enjoys painting, golfing, and playing tennis with friends and family.
Hope can be reached at hope@roiinstitute.net.
Tim Brock,ย Ph.D., a senior consultant at ROI Institute, facilitates ROI Certification and ROI workshops and provides ROI consulting services. Tim leads ROI Instituteโs weekly live virtual group coaching sessions that support individuals working toward earning the Certified ROI Professionalยฎ (CRP) credential. He is also an invited presenter at multiple international conferences and has also authored chapters on the ROI Methodology in several books.
Tim is a retired Air Force field grade officer, having served in both the enlisted and officer ranks, serving as a nuclear weapons maintenance crew chief and a missile combat crew commander for both the Titan II and Minuteman II intercontinental ballistic missile weapon systems. During his later career at Lockheed Martin, Tim led their science of learning and performance improvement team as a human performance system engineer and architect. He has experience in the education profession as a K-12 private school principal, a college director of education, and associate professor. Tim earned his Ph.D. from Capella University in education with a specialization in training and performance improvement.
Tim enjoys spending time with his three grown children and three young grandchildren. He and his wife enjoy taking extended cruises to relax, read, and see the world.
Caroline Hubble is Vice President of Consulting Services with ROI Institute. She manages the implementation of complex program evaluation projects, including conducting research and evaluation studies in various areas such as leadership development, process improvement strategies, and program implementation. In previous roles, she managed evaluation, analytics, reporting, and operations for business line and enterprise-wide HR departments. Her operational, project, and relationship management expertise is noted for significantly contributing to improved business practices.
Caroline holds a BA in Psychology from Rollins College and received her Masters of Science in Organizational Development in May 2013. Her publications include: ASTD Handbook of Measuring and Evaluating Training, Chapter 4: Using Surveys and Questionnaires. ASTD 2010; Measuring ROI in Learning & Development: Case Studies from Global Organizations, Chapter 4 (co-authored). ASTD 2012โ Offering Money for School Pays Off, (co-authored) Chief Learning Officer Magazine, June 2012.
When not focused on evaluation efforts, she enjoys spending time on her small farm in the mountains of North Carolina, raising Savannah and Egyptian Mau cats, following NASCAR, and capturing memories through photography.
Caroline can be reached at caroline@roiinstitute.net.
Melissa Brown is the Director of Partnerships at ROI Institute. She manages ROI Instituteโs network of more than 70 international partners and associates, as they implement the ROI Methodologyยฎ globally. Melissa also oversees marketing by coordinating and designing marketing campaigns, the layout and design of course materials, research projects, promotional collateral, and other communication resources. Melissa works alongside clients, partners, and associates to ensure quality results. Melissa is a Certified Digital Marketing Professional and American Marketing Association Professional Certified Marketer in Digital Marketing, and she also holds a Qualtrics Platform Essentials Certification.
Melissa earned a bachelorโs degree in Communication and Information Sciences from The University of Alabama and a masterโs degree in Communication from Walden University. She also holds a teaching license in secondary language arts. Melissa and her family enjoy traveling, watching and playing sports, and spending time outdoors.
Melissa can be reached at melissa@roiinstitute.net.
Kylie McLeod manages research, assessment, and communication at ROI Institute. She develops data collection instruments, collects, and analyzes data, writes final evaluation reports, manages research projects, coordinates the communication process, and directs the ROI Institute Awards Program. She also edits ROI Institute books and articles, develops promotional and marketing materials, and assists with the proposal creation process. She served as editor, production manager, and coordinator of the book, Value for Money: How to Show the Value for Money for All Types of Projects and Programs In Governments, Nongovernmental Organizations, Nonprofits, and Businesses (Wiley, 2020).
Kylie graduated with a Bachelor’s in Communication and Information Sciences from The University of Alabama in 2015 and a Master of Arts in Journalism from the same institution in 2017. Kylie holds CoreXM and CoreXM Expert certifications from Qualtrics and earned the Certified ROI Practitioner credential in November 2019.
In her free time, Kylie cheers on the Alabama Crimson Tide, enjoys the (mostly) sunny weather in Northwest Florida, and dotes on her dog, Penny.
Kylie can be reached at kylie@roiinstitute.net.
Kylie McLeod manages research, assessment, and communication at ROI Institute. She manages proposals, develops data collection instruments, collects, and analyzes data, writes final evaluation reports, and manages research projects. She has previously edited ROI Institute books and articles and developed promotional and marketing materials. She served as editor, production manager, and coordinator of the book, Value for Money: How to Show the Value for Money for All Types of Projects and Programs In Governments, Nongovernmental Organizations, Nonprofits, and Businesses (Wiley, 2020).
Kylie graduated with a Bachelorโs in Communication and Information Sciences from The University of Alabama in 2015 and a Master of Arts in Journalism from the same institution in 2017. Kylie holds CoreXM and CoreXM Expert certifications from Qualtrics and earned the Certified ROI Professional credential in November 2019.
In her free time, Kylie cheers on the Alabama Crimson Tide, enjoys the (mostly) sunny weather in Northwest Florida, and dotes on her dog, Penny.
Kylie can be reached atย kylie@roiinstitute.net.
Patti P. Phillips, Ph.D., is co-founder and CEO of ROI Institute. She is a driving force in the
global adoption of the ROI Methodologyยฎ and measurement and evaluation to influence organizational change. Her work as an educator, researcher, consultant, and coach supports leaders as they build the capacity to create and deliver value from investments in all types of endeavors. Her work spans private, public, nonprofit, and nongovernmental organizations.
Patti serves as a member of the Board of Trustees of the United Nations Institute for Training and Research and the UN System Staff College faculty in Turin, Italy. Additionally, she is chair of the Institute for Corporate Productivity People Analytics Board; Principal Research Fellow for The Conference Board; board member of the International Federation for Training and Development Organizations; and board chair for the Center for Talent Reporting. In 2015, she was honored by the Association for Talent Development as a Certified Professional in Talent Development Fellow for her contribution to the professionalism of the talent development field.
Patti contributes to various journals and is the author of books on measurement, evaluation, and ROI. CNBC, Euronews, and other news outlets feature her work.
Patti can be reached atย patti@roiinstitute.net
Ann Akins has been associated with ROI Institute for over 23 years.ย While primarily providing financial support for the company, in 2019, she also became the President of ROI expanding her role into the operational areas of the company.ย Prior to joining ROI, Ann was a regional controller for Waste Management with over $250 million in annual revenue.ย She has also led a customer experience center for FIS (a financial services company) with over 1,200 employees.ย This previous experience has helped Ann provide significant financial and operational insights for ROI operations.
Ann has a BS in Accounting from the University of West Alabama and a Masterโs in Business Administration from Mississippi State University.ย An avid University of Alabama sports fan, she enjoys attending UA football games and spending time with her children.
Ann can be reached at ann@roiinstitute.net.
Evan Seidner is a Senior Analyst for ROI Institute. In his role as an analyst, Evan does mixed-methods data analysis for clients. Evan also supports other team members in the evaluation process and implementation processes. In previous roles, he has worked with environmental NGOs in China as well as working for an agribusiness in Tokyo, Japan.
Evan holds a BA in Global Studies with minors in Political Science and East Asian Languages and Cultures from the University of Illinois at Urbana-Champaign and received his MA in International Relations from the American University in Washington, D.C.
In his free time, Evan enjoys learning photography and videography. He is a Japanese film buff, which he watches to help maintain his language skills.
Evan can be reached at evan@roiinstitute.net
Jack J. Phillips, Ph.D., chairman of ROI Institute, is a world-renowned expert on accountability, measurement, and evaluation. Jack provides consulting services for Fortune 500 companies and major global organizations, and regularly consults with clients in manufacturing, service, and government organizations in 70 countries. The author or editor of more than 100 books, he conducts workshops and presents at conferences throughout the world and has received several awards and honors for his work.
Jack has enjoyed almost 30 years of corporate experience in the aerospace, textile, metals, construction materials, and banking industries. He has served as training and development manager at two Fortune 500 firms, as senior human resource officer at two firms, and as president of a regional bank. Also, he served as management professor at a major state university.
Jack has undergraduate degrees in electrical engineering, physics, and mathematics; a masterโs degree in Decision Sciences from Georgia State University; and a Ph.D. in Human Resource Management from the University of Alabama. He has served on the boards of several private businesses, nonprofits, and associations, including the American Society for Training and Development, the National Management Association, and the International Society for Performance Improvement, where he served as president (2012-2013).
Jack can be reached at jack@roiinstitute.net.
Patti P. Phillips, Ph.D., is co-founder and CEO of ROI Institute. She is a driving force in the global adoption of the ROI Methodology and measurement and evaluation to influence organizational change. Her work as an educator, researcher, consultant, and coach supports leaders as they build the capacity to create and deliver value from investments in all types of endeavors. Her work spans private, public, nonprofit, and nongovernmental organizations.
Patti serves as a member of the Board of Trustees of the United Nations Institute for Training and Research (UNITAR) and the UN System Staff College faculty in Turin, Italy. Additionally, she is chair of the Institute for Corporate Productivity (i4cp) People Analytics Board; Principal Research Fellow for The Conference Board; board member of the International Federation for Training and Development Organizations (IFTDO); and board chair for the Center for Talent Reporting (CTR). In 2015, she was honored by the Association for Talent Development as a Certified Professional in Talent Development (CPTD) Fellow for her contribution to the professionalism of the talent development field.
Patti contributes to various journals and is the author of books on measurement, evaluation, and ROI. CNBC, Euronews, and other news outlets feature her work.
Patti can be reached at patti@roiinstitute.net
Hope Nicholas the Director of Publications for the ROI Institute.ย In this role she coordinates all publications, including books, articles, and case studies.ย Hope has significant experience with transcription, editing, proofreading, and project planning.ย Additionally, she contributes to multiple research and business development projects by facilitating communications and developing a wide variety of documents.
Hope is a graduate of the University of Akron and has over 15 years of experience working the field of healthcare administration and documentation. In her spare time, she enjoys painting, golfing, and playing tennis with friends and family.
Hope can be reached atย hope@roiinstitute.net.
Caroline Hubble, M.S.O.D., is Vice President of Consulting Services with ROI Institute, Caroline manages the implementation of complex program evaluation projects, including conducting research and evaluation studies in various areas such as leadership development, process improvement strategies, and program implementation. In previous roles, she managed evaluation, analytics, reporting, and operations for business line and enterprise-wide HR departments. Her operational, project, and relationship management expertise is noted for significantly contributing to improved business practices.
Caroline holds a BA in Psychology from Rollins College and received her Masters of Science in Organizational Development in May 2013. Her publications include: ASTD Handbook of Measuring and Evaluating Training, Chapter 4: Using Surveys and Questionnaires. ASTD 2010; Measuring ROI in Learning & Development: Case Studies from Global Organizations, Chapter 4 (co-authored). ASTD 2012โ Offering Money for School Pays Off, (co-authored) Chief Learning Officer Magazine, June 2012.
When not focused on evaluation efforts, she enjoys spending time on her small farm in the mountains of North Carolina, raising Savannah and Egyptian Mau cats, following NASCAR, and capturing memories through photography.
Caroline can be reached atย caroline@roiinstitute.net.
Jack J. Phillips, Ph.D., chairman of ROI Institute, is a world-renowned expert on accountability, measurement, and evaluation. Jack provides consulting services for Fortune 500 companies and major global organizations, and regularly consults with clients in manufacturing, service, and government organizations in 70 countries. The author or editor of more than 100 books, he conducts workshops and presents at conferences throughout the world and has received several awards and honors for his work.
Jack has enjoyed almost 30 years of corporate experience in the aerospace, textile, metals, construction materials, and banking industries. He has served as training and development manager at two Fortune 500 firms, as senior human resource officer at two firms, and as president of a regional bank. Also, he served as management professor at a major state university.
Jack has undergraduate degrees in electrical engineering, physics, and mathematics; a masterโs degree in Decision Sciences from Georgia State University; and a Ph.D. in Human Resource Management from the University of Alabama. He has served on the boards of several private businesses, nonprofits, and associations, including the American Society for Training and Development, the National Management Association, and the International Society for Performance Improvement, where he served as president (2012-2013).
Jack can be reached atย jack@roiinstitute.net.
Example
MYTH: The monetary value for a measure is difficult to locate or calculate.
REALITY: Most measures that matter have been converted to money.
The Kansas City SWAT team implemented the Outward Mindset program to reduce citizen complaints about the police, a meaยญsure of the quality of their work. The team leader, Chip Huth, and the team knew they could avoid the complaints by being nice guys, but they still had their jobs to do. Measures of productivity were equally important, includยญing confiscating drugs, cash, and guns; serving warrants; and making arrests. As a result of Outward Mindset, they were able to improve proยญductivity and quality. Reducing complaints was an important quality meaยญsure of success. However, according to Chip, โThe Outward Mindset approach did not merely help us reduce complaints, but also helped us account for an unquantifiable reduction in lawsuits, injuries, etc., and an increase in public trust, collaboration, and drug and gun seizures.โ
What else cause the complaints to decrease? The number of missions did not change, and the types of missions didnโt change. There were no policy changes and no high-profile cases in the news. In essence, the team could not think of any other factors and believed that their new Outward Mindset approach had made the difference. According to Chip, the complaints disappeared because of the behaviors from the Outward Mindยญ set, โThe way we responded to the reality of others while executing our work, including some changes in procedures that were born out of our commitment to seeing others, made the complaints disappear.โ
When comparing the monetary benefits of reducing complaints for one year to the cost of preparing this team to use the Outward Mindset, the ROI is 5,724 percent. This is an almost unbelievable ROI, but the process and the data prove it is credible.
Story from Show the Value of What You Do, Chapter 6, Page 97
Example
MYTH: The success of one project rarely influences investing in another project.
REALITY: The best results to continue to invest in are previous successes.
Jessica Kriegel, an organization and talent development consultant at Oracle with expertise in strategic planning, talent management, and leadership development, was particularly focused on intergeneraยญtional understanding. More specifically, she realized that generational labels do not work. The labels arenโt bad. Itโs the associations that society puts on those labels that are bad.
Although labels abound with each generational era, millennials (those born between 1980 and 2000) are the most misunderstood genยญeration. These labels keep individuals, managers, and even organizations from being as successful as they should be. Jessicaโs work at Oracle proยญ vided her with an opportunity to tackle this challenge directly. One projยญect clearly focused on this challenge, and she needed to show its value.1 A product ยญdevelopment team member reached out to the person in charge of the Oracle College Hire Program about their problem with the millennials. The team member suggested that the millennials didnโt unยญderstand the corporate culture, and as a result, there were behavioral and communication issues. This suggestion included a request for a training program to help the millennials acclimate to the company.
Jessica took this project on. She wanted to understand the issue and ensure that the correct program was implemented. She did not want to take on the project on the face value that millennials were the problem, and if we fix them, everything is okay.
Each year, this program develops approximately 100 to 200 new college hires, making this an important program. She examined some of the data that were surrounding the situation. A lack of productivity was reported, along with the excessive turnover of the millennials. Some were leaving soon after employment, which was very expenยญsive. Consequently, the business outcomes of interest were imยญ proved productivity and reduced turnover.
To understand the right solution, Jessica conducted a detailed surยญ vey with the managers and the employees. The surveys indicated that:
Next, Jessica conducted focus groups to examine the problem in more detail, and the focus groups identified areas where improveยญment was needed. The managers:
Meanwhile, the millennials felt they:
With these issues identified, the solution was designed to work with both groups to ensure that they worked productively and effiยญciently together, addressing their individual needs in two different programs (one for the managers and one for the employees). She set out to show the value of her program.
As Jessica conducted the programs, she captured reaction data. The employees felt the program was valuable, and it helped them understand more about their roles in the organization. She measured learning from both groups and found they were learning what they needed to do to be more successful. She measured application to see the extent to which they were working together because of the training. The reports were positive that they were working collaboraยญtively. With the increased collaboration came improvements in retenยญtion and productivity. With these improvements, she took a step to sort out the effects of the program from other influences, converted these measures to money, compared program benefits to the cost of the program, and calculated that the return on investment was 695 percent. The executives were impressed, and she communiยญcated the results to other groups and included a copy of her bestsellยญing book, Unfairly Labeled.
Leveraging the results of Jessicaโs project has made a differenceโ not only for the organization in which she was working at the time, but also for the program participants and the individuals she now reaches through her writing and speaking.
Story from Show the Value of What You Do, Chapter 7, Page 117
Example
MYTH: Data collection to show the success of a project is almost impossible.
REALITY: With planning and effort, data collection becomes feasible and successful.
Zoe Moore has been very determined. She helps organizations deยญvelop their Diversity, Equity & Inclusion (DE&I) strategies by ensuring there is diverse representation in leadership and recurring profesยญsional development focused on DE&I that improves workplace culture and supplier diversity programs to increase opportunities for underยญ resourced businesses. She has garnished attention around the subยญ jects, but still, many leaders ask the question, โSo what? What value do diversity, equity, and inclusion bring?โ
Of course, supplier diversity is important, but that is just the startยญing point. Equity and inclusivity are imperative across the global business of hospitality and are where the real value of Zoeโs work reยญ sides. But how can she demonstrate this value? She needs to collect data about:
This creates a new data collection stream for Zoe. While sheโs worked hard to improve awareness around supplier diversity through representation metrics, the challenge is to make sure that the teams integrate DE&I successfully, and she must collect data along the same five levels of success that form the value chain, with supplier diversity being the beginning point. This situation highlights that the five levels of success, first introduced in Chapter 1, can be examยญined at different times in projects and often from different perspecยญtives. This requires data collection along the value chain to make it work.
Story from Show the Value of What You Do, Chapter 5, Page 83
Example
MYTH: Objectives add little value to the outcomes.
REALITY: Objectives are powerful drivers of success.
Martin Burt, Ph.D., has a lifelong quest to understand and abolish poverty. His inspirational experience in public service includes servยญing as chief of staff for the president of Paraguay, the mayor of Asunยญciรณn (the capital city of Paraguay), and the vice minister of commerce. Martin is the founder and CEO of Fundaciรณn Paraguaya, a nonprofit devoted to promoting social entrepreneurship and economic selfยญ reliance to eliminate poverty worldwide.
Martin has challenged many assumptions about poverty by asking, โWhat if everything we knew about poverty was wrong? What if the legions of policy makers, social scientists, economists, aid workers, charities, and NGOs marching across the globe have been using the wrong strategy and tactics to wage the wrong war against poverty?โ
In his book, Who Owns Poverty?, Martin lays out the frameยญ work necessary to eliminate poverty. The answer to his question, โWho owns poverty?โ is clearโthe people in poverty. They donโt want to be in poverty. But people in poverty are not just persons with lowยญ income labels. They are individuals with joy, generosity, and creativity. They have problemยญ solving and entrepreneurial spirits, and they want to rise out of poverty. They just need help and support to get there, and they will get there if we give them an avenue to do so.
Martin created the Poverty Stoplight program that shows families what they must do to come out of poverty. Itโs not just increasing inยญ come, but itโs tackling a host of issues that altogether contribute to poverty. He developed 50 indicators of poverty, as shown in Table 9. Martin created the stoplight program with clear measures and three phases: red, yellow, and greenโred (a worst ยญcase scenario), yellow (making progress), and green (out of poverty). Along with each indicator, for each phase, the Poverty Stoplight team developed speยญcific measures of success so that all stakeholders, including the famiยญlies in poverty, can see where they are going, and the progress being made. Progress follows the five ยญlevel framework of reaction, learning, application, impact, and ROI.
Martin needs to show the value of the Poverty Stoplight program. He needs to push its evaluation to the ROI level for governments, as they calculate benefitยญ-cost analysis for helping to eliminate poverty. He also needs to calculate the ROI for the companies supporting the program, showing them that this is a good investment for the company and the community. The major foundations involved in the NGOs and the charities donโt need to see ROI, but they all need to see the impact. The impact is getting families out of poverty and reaching the green light on the Poverty Stoplight. Martin needs the Show the Value Process to show the value of what they do.
Story from Show the Value of What You Do, Chapter 4, Page 61
Example
MYTH: The solution to a problem is almost always obvious.
REALITY: The right solution is rarely obvious.
Ginger Luttrell spent 10 years as a software engineer, including conยญ figuration and programming at one of the worldโs largest business software companies. The intent of new systems implementations is to improve output, quality, cost, and time. Over the years of working with these systems implementations, she noticed a problem. When an implementation project would go live, endยญusers, those who worked in the business functional areas or departments, would ask quesยญtions such as:
Interestingly, end-ยญusers received comprehensive training on these systems during projects. Despite this fact, Ginger noticed that they exยญperienced problems and frustrations on the job. As a result, productivยญity, quality, and time savings sufferer rather than improved. The types of problems Ginger was addressing were universal. Additionally, some end-ยญusers would become so frustrated they would leave the company altogether. Ginger also saw that there was no channel for the voice of the end-users to get to the senior executives to address their issues and concerns.
Ginger began to realize a possible solution by addressing the preยญcise business needs identified (productivity, quality, time, cost, and retention). The endยญ-users needed a person who would support them on a routine basis. This person would serve as a mentor, coach, trainer, counselor, and trusted advisor to help them through complex impleยญmentation issues. This person is called a super user. At the same time, super users would help develop the end-ยญusers to become more valuable business team membersโmembers with a broader vision and more complex skill sets, who could offer greater support in their organization.
Ginger realized that the cost of providing super users was much less than the savings that would be generated to make the software system more effective for the organization. She tested her theory in different organizations and was convinced that she had the right solution for the perplexing problem of largeยญscale systems implementation. Eventuยญally, Ginger founded the Super User Network and now spends much of her time preparing and developing super users to perform this essenยญtial role in business departments worldwide.
Story from Show the Value of What You Do, Chapter 3, Page 45
Example
MYTH: Itโs almost impossible to connect most projects to business needs.
REALITY: Essentially, every project can be connected to a business need.
Chip Huth, the new leader of a SWAT team in the Kansas City, Missouri, Police Department, knew what he had to do. Citizen complaints against the team were excessive, averaging about 30โ40 per year. They were also expensive, costing the department an average of $70,000 per complaint just for the investigations. The deputy chief (DC) who appointed Chip was clearโChip needed to โclean upโ the mess. The DC was concerned about optics from the complaints and the many irritations they were causing.
Expectations were vague, and the accepted remedy was potenยญtially a โhouse cleaningโ and subsequent creation of a new team. Chip knew what he was facing. He accepted the assignment because he loved working in teams. Initially, Chip didnโt believe the team could be โfixed.โ Admittedly, Chip was completely self-centered in his thinking and simply loved the thrill of the work. He reassured the DC that he could whip the team into shape (not believing anyone could do so) and initially sought token improvements by addressing problem behaviors.
Unexpectedly, through a series of personal and professional encounยญters, Chip was exposed to a personal improvement process called Outยญ ward Mindset from the Arbinger Institute. Arbingerโs research indicates that people operate at any given time from one of two mindsets: an inยญ ward mindset or an outward mindset. When operating with an inward mindset, you focus only on your own goals and objectives without conยญsidering your impact on others. With an outward mindset, however, you see others as people who matter as much as you do. You consider their needs, challenges, and objectives. And you focus on collective results.
As Chip began applying the Outward Mindset framework to each area of his life, including his leadership responsibilities with the team, it seemed logical that this could impact the team. Although Chip was not certain that the Outward Mindset would deliver fewer complaints or build a better relationship with the community, he was willing to give it a try.
He introduced the team to this process. When they were exposed to it, they responded positively. The team asked Chip to lead them in applying the Outward Mindset skills and framework, in roleยญ modeling the behaviors, and showing them that it works. That was all Chip needed. He had the business measure, citizen complaints at roughly $70,000 each, the right solution, Outward Mindset, and the right people at the right time. He was ready to go.
Story from Show the Value of What You Do, Chapter 2, Page 29
How to Develop Turnover Costs
The first step in monitoring turnover costs is to define and discuss several issues about a cost control system. The key issues are presented here.
Some Costs Are Difficult to Determine
The huge difference that often exists between the cost estimates from HR and the actual turnover cost lies in the indirect or hidden costs category. Where direct costs are usually in the cost accounting system, the hidden costs are almost never considered. However, they can be developed using assumptions and estimation processes.
Fully-Loaded Costs
Using the approach to capturing the fully-loaded costs of turnover, each cost is identified and put into a specific category. Where an estimate is required, the entry is adjusted later. If possible, someone from finance and accounting should review and approve the data. The process should be able to withstand even the closest scrutiny, so organizations must ensure that all costs are included.
Reporting Total Cost
Costs are typically expressed as a percentage of the wages and salaries of the employees in a particular job group. This figure is usually determined after a detailed cost study is conducted. The percentage can be fixed for a group (for example, the sales force) or a specific job (for example, client relationship manager [CRM]).
For example, if a cost study in another industry has concluded that the cost to replace a CRM averages 150 percent of pay, this amount can be a beginning point. If there is some concern about the cost being too high, perhaps a lower number would be appropriate, such as 120 percent or 100 percent. After a figure has been determined, the turnover cost is then reported on statements along with the actual costs.
Morteza Zohrabi, MD, MBB, PMP, CRP, is the lead director in the implementation of countless mega-projects in both public and private sectors for large hospitals, government offices, manufacturers, and universities, to name a few. He is also a Certified Return on Investment Professional, publishing numerous articles and presentations on guaranteed value for money.
With over 20 years of expertise and hundreds of millions of dollars in savings, Morteza has done it all. He has delivered innovative solutions to old-time problems, with a track record of outstanding results, enhancing throughput, capacity, staff/client satisfaction, and shrinking turnaround times.
Through a combination of conventional and modern management techniques, Morteza and his team have revolutionized the management consulting industry by providing state-of-the-art business transformations and distinctively conforming as growth partners, encompassing guaranteed client satisfaction with each endeavor.
Morteza can be reached at morteza.zohrabi@yahoo.com.
Tom has a strong track record of enhancing business and individual performance through learning. He has conducted research and led teams to achieve award-winning results for more than 50 Fortune 500 companies. His strengths include assessing training needs, designing and facilitating learning solutions, and measuring results, including ROI.
At Atkinson Analytics, Tom helps clients achieve better results throughout the learning process, from defining needs to measuring the learning experience, on-job application, and business results. Tom enables individuals to demonstrate value to executives, sustain and enhance performance gains, and target opportunities for increasing return (ROI) on learning investments.
Tom previously worked as a learning director at Fresenius Medical Care and led a team of professionals in delivering an ambitious curriculum of programs and projects, including more than 1,000 sessions of the companyโs keystone leadership development initiative. At Deloitte Consulting, Tom was a specialist master, designing award-winning training and measurement systems for some of Deloitteโs largest clients.
Tom also helps parents of children on the Autism spectrum build meaningful relationships and a foundation for growth and development.
Tom can be reached at tatkinson@atkinsonanalytics.com .
Suzanne Schell, CRP, is the CEO of ROI Institute Canada. Suzanne teaches, consults, and conducts ROI studies primarily focussed on the Healthcare industry.
Suzanne acquired her Certified ROI Professional designation in 2010. She has brought the ROI Methodology to healthcare organizations, hospitals, and healthcare ministries and authorities across Canada, through workshops, consulting, and ROI Certification.
Her workshops and consulting give healthcare professionals, HR professionals, and executives the knowledge and skills to measure impact, value and ROI of initiatives, programs, and projects. Key learnings include developing data collection and analysis strategies to identifying change in behavior and impact, ROI. Answering the questions โ did the investment make a difference, did it deliver the impact expected, and is this the solution moving forward?
Suzanne can be reached at suzanne@roiinstitutecanada.com.
Rana Imran is an HR and OD professional and strategist with 15+ years of experience with multinational corporations in Pakistan and the Middle East region in diverse multicultural and international environments. Rana has worked with telecom, e-commerce, FMCG, education, healthcare, and hospitality industries.
Rana’s expertise is in organization design and development, business transformation strategy, organizational culture, employee engagement, performance management, talent management and development, capability building, leadership development, and measuring program impact.
Rana has delivered more than 36,000 hours of training on behavioral and business skills.
Rana is certified in Hogan Assessment, Global Diversity & Inclusion standards, is an IFC World Bank Certified Trainer, and has received a Measuring Return on Investment Certificate from ATD and ROI Institute. He is Certified Practitioner of Global Leadership Assessment 360 and Working Group Leader for the Global ISO HR Standard development committee TC260.
Rana can be reached at ranaimran.hr@gmail.com.
Burdette (Pete) Fullerton PhD is the founder of Dr. Peteโs Leadership Accelerator, Inc., an Executive Coaching and Return on Investment (ROI) assistance firm. In order to assist community economic development professionals, Pete started up Dr. Peteโs Leadership Accelerator. Pete is a passionate advocate for passing it on and leaving the campsite better than he found it. He values character, trust, and integrity and looks to assist like-minded economic development and chamber of commerce professionals in achieving personal and professional excellence. Pete has been a community economic development professional for over 30 years. In his career, Pete has participated in the completion of projects that have directly invested over $3.5 billion, which currently employ more than 17,000 in Kansas City.
In 2017, Pete earned his Doctorate at the University of Southern Mississippi in Human Capital Development. Pete attended Texas A&M University and received his Bachelor of Arts degree in Political Science and a Master of Public Administration from the University of Missouri. Pete holds certifications as a Certified Economic Developer (CEcD), Certified Return on Investment Professional (CRP), Certified Professional Coach (CPC), and Certified Executive Coach (CEC).
Pete can be reached at pf@drpeteleads.com.
Nader Bechini is passionate about assisting people and organizations improve and maximize their performance and bottom-line results. His life mission is to support others in strengthening their abilities to inspire, influence, and create an impact.
Nader is the director of ROI Institute in the MENA region. He is also a global facilitator with the Association of Talent Development (ATD).For more than 20 years, he led human performance improvement projects, programs, and initiatives, in more than 30 countries in North and South America, Europe, Africa, Australia, and Asia.
Nader has received several awards for his achievements. On three occasions, ROI Institute awarded him for the best international implementation of the ROI Methodology (2015, 2019, and 2020). The Moroccan Society for Human Resource presented him with an award for the best African HR expert in 2019. His articles in learning and development have been translated to Korean, Russian, Chinese, French, Arabic, and Spanish.
Nader facilitates workshops, consults with organizations, and speaks at conferences worldwide. He has been interviewed by several radio and TV programs in Saudi Arabia, Sudan, Tunisia, France, and Algeria.
Nader holds a masterโs degree in marketing from the University of Tunis El Manar, Tunisia.
Nader can be reached at nader@roiinstitute.net.
Matic Kadliฤek is an organizational psychologist and CEO of Video Center, Ltd. He is a sought-after people development consultant to more than 100 companies, building and implementing internal learning centers, e-learning content and platforms, and tools for successful leadership development and skill building, with psychological testing, coaching, succession planning, work environment diagnostics, mentoring, on-boarding, and providing frameworks for credibly measuring the impact of people development programs using the ROI Methodology (ROI Institute, USA). He is one of the first EuroPSY certificate holders for Work & Organizational Psychology in Slovenia. Matic is a dedicated mentor to young psychologists and takes humor seriously.
Matic can be reached at matic.kadlicek@videocenter.si.
Hormazd Mistry, ATD Master Trainerโข, is the founder and CEO of Sarosh Consulting and ROI Institute India. He is the India partner for ROI Institute.
Hormazd is a learning & development professional who has twice received the Most Fabulous Training & Development Leaders (2020 & 2021) award by the World HRD Congress. He has been a part of the L&D community for over 18 years and has worked for multinational organizations like Wipro Ltd., HERE Technologies, IKS Health, leading various L&D teams across geographies.
With a passion for L&D, Hormazd has experience in different roles in various L&D verticals. Over the years, he has delivered over 25,000 hours of training on various topics including but not limited to technical, TTT, leadership, soft skills, customer service, behavioral training, etc., with high business impact.
Hormazd now works with L&D/HR professionals and teams to enable them to deliver high business impact with their solutions. He also helps them in measuring and showcasing the impact & ROI of their programs.
Hormazd can be reached at hormazd@roiinstitute-india.com.
Hashem Othman Hashem is a top-notch ROI specialist, trainer, and consultant with 13 years of experience in measuring the ROI of a wide variety of projects, including HR practices, training, health care, and KPIs. His expertise covers isolation techniques, forecasting ROI studies, training best practices, and designing and implementing training solutions based on their ROI. Hashem also has experience in overseeing career development, setting performance metrics, evaluating project productivity, and helping to create successful long-term initiatives within organizations. He serves as a point person for CEOs, CFOs, and project managers to ensure proper investing of project budgets. Hashem maintains excellent communication, change management, and leadership skills. He is distinguished for his problem resolution abilities and high level of confidentiality. Hashem is equally effective at conducting ROI studies, measuring project impact, and training supervision and delivery.
Hashem earned his Master of Strategic Human Resource Management (MSHR) degree at the University of Wollongong, Australia, and a Bachelor of Applied Physics degree at Muโtah University, Jordan. He achieved the designation of Certified ROI Professional with ROI Institute in July 2017.
Hashem can be reached at h.othman@criticalinnovation.ae.
Beryl Oldham has 30 yearsโ experience in organizational learning and development. Before moving fulltime into consulting in 2013, she held senior generalist HR, organizational development, and learning and development roles in a range of government, local body, and corporate organizations. Her experience spans workforce planning, technical/professional and leadership/management competency frameworks design, performance management systems design and implementation, learning design, training systems management and evaluation, and measuring ROI for human resources, training, and other organizational initiatives.
In addition to being a Certified ROI Professionalยฎ, Beryl also holds AQF certificates in Training Systems Management and Training Evaluation, and the NZQA Certificate in Adult Education and Training (Level Five). She was the 2014 recipient of the NZATD Education Trustโs Learning and Development Practitioner of the Year Award and the ROI Instituteโs 2014 Award of Excellence for Most Innovative Approach to ROI.
Beryl is passionate about measuring results and her company, Complete Learning Solutions, provides learning solutions that cover every aspect of L&D and make a difference by proving the value of capability development in people and organizations. Beryl has been a partner with ROI Institute for nearly 14 years.
Beryl can be reached at beryl.oldham@completelearning.co.nz.
Farzaneh Majed is an ROI Institute Partner and Balanced Scorecard Institute Strategic Partner and Advisory Board Member with over 20 years of successful business development, change management, and innovation experience who has a passion for excellence and thrives on driving change. Her extensive career at the global level has resulted in many successful initiatives being adopted lucratively. She believes in simplifying processes and delivering results through strategic planning and effective execution.
As CEO and Managing Partner of Transform Alliance, Farzaneh is committed to assisting organizations to achieve transformation through the engagement of their people with TA’s alliance partners. Farzaneh is an advocate of Inclusion and Collaboration and owes her success to putting herself in the other person’s shoes, seeing the world from their perspective, and seeking a win-win solution.
Farzaneh is a Key Performance Indicator Professional (KPIP), Balanced Scorecard Master Professional (BSMP), has a Master’s Certificate in Project Management from George Washington University, and an Honours degree in Combined Sciences from the University of Brighton, UK. She established the L&D Division of Informa, was selected as Centre of Excellence for Training among Informa Group, and achieved an innovation award for continuous improvement. Farzaneh is the author of Generation Inclusion.
Farzaneh can be reached at farzaneh-majed@transform-alliance.com.
Colin’s career spans more than 35 years, and he’s still smiling. He began as an information technology (IT) mainframe programmer, growing to run complex international IT projects for corporations in many business areas requiring advanced leadership, cross-cultural stakeholder management skills, and the delivery of quantifiable business value.
Originating from the United Kingdom, he has lived in the United States, the Netherlands, and Singapore at various times and operated in many other countries.
Since 2007, Colin has concentrated on consulting and training, developing several thousand project managers and leaders for corporate clients and educational institutions. In 2014, he completed his ROI impact study to become a Certified ROI Professional (CRP) and partnered his company with ROI Institute through various locations in South-East Asia.
Supported by his dedicated team, Colin conducts ROI consulting projects and courses as well as project management and related subjects. He is a Project Management Professional (PMP), Certified Scrum Master, Certified Product Owner, and holds a master’s degree from Arcadia University, PA. Colin also specializes in dispute resolution and sits on the Principle Panel of the Singapore Mediation Centre where he mediates large quantum business disputes. And, when he has five minutes, Colin organizes the Singapore Filmmakers Network.
Colin can be reached at enquiries@knightgriffin.com.