On the other hand, return on investment (ROI) is the amount of money an investor receives as proceeds from an investment. By tradition, ROI has always been measured in monetary terms, but not in the value return to the overall business or organization. Return on value (ROV), in my opinion, is the back bone of organizational emancipation. As we move deeper into a customer driven market, investors and business leaders alike should worry about the VBI (Value-built-in) engine. Although most may argue that measuring the intangible nature of value may make ROV a difficult KPI to measure, research shows organizations that make ROV a key indicator have recorded more success. These days, the “what “questions do not cut it any longer, but the “why” questions, sure make all the difference when integrated into the strategic business thinking.
In Mark .C. Crowley’s book “ Lead from the heart” subtitled transformational leadership for the 21st century, he explains how organizations with a value engagement and process tend to maximize returns as a result of continuous stream of value, customer satisfaction, employee engagement as well as conducive and flexible working environments. Companies such as SAS are driving engagement versus perks. It clearly shows the driver for$3.2billion revenue in 2016 up 1.3 % from financial year ending in 2015.In the words of SAS CEO Jim Goodnight, he stated quote; “We aim to help every customer turn analytic insights into value” and to deliver such customer value, Jim requires the right people with the right attitude and understanding of his vision. SAS as a company has created a value proposition that has in the past 33 years, increased its revenue in its 40 years of doing business. Mark Crowley pressed further to say that, individuals are seeking self- actualization and happiness in today’s work environment. As such, for organizations to return on investment, it is contingent on employees to be wholly engaged and contributing to the over all goal. After all, the driving force behind organizational success is people. Changing times have led to changing needs, which in turn, have brought about change in how individuals perceive treatment.
No doubt, employees want to work in an environment that makes them feel wanted, recognized and rewarded while having work-life balance. In my discussion with an employee of a company, and I quote “I spend more time at my job than anything else and as such my actualization derives from it” which meant “I depend on my job for a lot of things that are defining” as stated by the employee. This does not mean people are selfish but rather it underlines the fact that, when an individual is on the path to actualization, commitment to and by actualization drivers like work, is very primary.
These days, organizations and business leaders have to constantly ask “why” at every stage of driving forward their vision and goal statements. Technology taking the center stage has forever changed consumer perspectives and the spread of information. Globalization and deregulation have both increased competition and created overwhelming access for consumers who are looking to compare products before purchase. This has forced the hands of businesses to change their method of engagement. The push to adopt new ways of doing business has created a disruption to most existing business models, but it is a welcomed development as it is required to drive profit. Investment return today for any organization, requires appropriate synchronization of all components of sustainable ROV (Return on value) and includes respect for people, the way standards are stipulated and the laid out method of doing business.
Every organization has to continuously weigh the value proposition in the projects and tasks approved, people performing the task, what problem the solution addresses and why the solution is viable for the business at the time. Nonetheless, the VUCA (Volatility, Uncertainty, Complex and Ambiguous) scenario has set stage for a more incremental way of delivering value and ensuring there is return on value as well as investment. The first approach would be to agree on transformation and get in the swing of re-defining what an organization wants to be known for in the market place. The second approach involves pursuing an aggressive agenda to transform the market place. Mindset at this point would matter for the organization and its employees as a certain persona is required for this type of re-definition.
In summary, the VUCA challenge has made it almost impossible for businesses to run a centric model for long. The base for continued ROI (Return on investment) is ROV (Return on value) and it entails a dynamic approach to the driving factors such as people, customer and technology. No longer would businesses see significant ROI without the required flexibility in adoption, adaptation and acceptance of a value stream model in business engagement and dealings.
Think ROI! Think ROV!