Most people think of ROI as a business term. However, return on investment is just as relevant to your personal life as your professional life. Also, ROI is just as important to nonprofits as to for-profits.
Whether it is at home or at work, ideally, you invest your time and energy to advance what you care about most. We can list your four most important resources with the acronym TEMP which stands for time, energy, money, and people. Your goal should be to invest less resources to get the results that you want. To increase your results with less resources, you need to have strategic clarity on what matters. Here is how you can gain that strategic clarity.
First, clarify your vision. What is the picture of your preferred future? Second, choose your strategic themes or priorities. What are the 1-3 big deals you are going to focus on this year and next. Third, craft a few key strategies that are going to advance each theme. Fourth, choose a small number of measures that matter. These are the data sets you are going to track to see if you are making your desired progress.
Now you are ready for your fifth strategic element: initiatives. Strategic initiatives are carefully chosen projects that you think will move the needle on your measures. Of the 20 or more personal or professional projects that you could invest, you will need to choose where you invest your limited TEMP resources. For example, start by listing 10 or 20 projects that you think could advance your measures and strategy. Next, assess how much TEMP resources you will need for each initiative. Lastly, rank your list of initiatives according to which ones will move your measures the most with the least investment of TEMP resources. These high impact, low TEMP initiatives will give you the highest ROI.
Let’s look at an example from my personal life. I could have an objective: Burn more calories. My measures could be time and calories. Let’s say I want to burn 500 calories. To do that, I could run at 5 mph (about 500 cal/hr), which would take about an hour. I could also bicycle at about 10 mph (about 250 cal/hr) which would take about two hours, Lastly, I could mow the lawn (about 325 cal/hr), which would take an hour and a half. From this example you can see that running only takes half the time that cycling takes. If you really like cycling and only want to take an hour, you could move your speed up to 14-15 miles per hour.
The goal here is to see if you can get the return that you want with a smaller investment of TEMP resources. Let’s look at an organizational example. Let’s say you wanted to grow donor revenue by $300,000. Your objective could be: Grow donor revenue. Your measure could be donor revenue. Now you have to choose an initiative that will provide the return that you want with a smaller investment of TEMP resources. What initiatives could you use to accomplish this? Here are four candidates:
You could hire a full-time fund-raiser to help.
You could do an email campaign.
You could have a giving day for your organization.
You could put on a golf outing.
In these examples, the goal is not to work more or spend more. The goal is to choose the initiative that will be high ROI which means a higher return and a lower TEMP investment.
In past episodes, we have talked about the difference between inputs and outcomes. Inputs are the initiatives and projects that require a TEMP investment of time, energy, money, and people. If inputs require an investment of TEMP resources, outcomes are the results or return that you want.
Often when I ask people how they are doing. They most often tell me about the work they are doing. While initiatives and projects are important, they are not results. If I said to an academic dean at Trevecca where I teach, “how we are doing?” she might say, “we are doing on-campus faculty development, starting a new program, and hiring new full-time faculty.” I could say, “Wow, that is a large investment of resources. Why are you doing all this.” She might say because we need to. When pressed, she might say, because we want to
Improve student engagement.
Lower student-faculty ratio.
I could say to her, “you could move the needle on these three measures by:
Doing a faculty development video,
Better market the programs we have,
Hire some adjuncts who are well-qualified and working in the area.”
The three initiatives I propose would cost much less in TEMP resources than the three she suggested. At the end of the day, it doesn’t matter if we choose my initiatives or her. The goal is to move the needle on our measures with a smaller investment of TEMP resources.
Some next steps for you on this could be choosing an objective or measure that you care about, and then brainstorm on 3-5 initiates that could move these forward. After you have your list of 3-5 measures, rank them on 1) how much TEMP resources will they require, and then 2) how much will they move your measures forward?
We have now covered all five elements of our strategy model. You can use your strategy hand for a quick review. Look at the palm of your hand. Your thumb represents your MV3 which stands for your mission, vision, values, and value propositions. Your index finger represents your 1-3 strength themes or big deals for this year and next. Your middle finger represents a balanced set of strategic objectives that will advance each theme. Your ring finger represents a small number of measures that represent progress on your objectives and vision. Your little finger at the bottom represents your on-the-ground strategic initiatives. These projects are a carefully chosen investment of your TEMP resources which stand for time, energy, money, and people. You want to move your strategy forward as much as you can using the least possible resources.
Next week, we will focus on how you can use OKRs as a way to get strategic practice in your personal and professional life.