Thoughts on Leadership is the brain child of Paul Bridle. This is the place that Paul shares his monthly thoughts.

Return on Investment

Posted: December 2nd, 2009 | Author: | Filed under: Uncategorized | No Comments »

moneyFirst a quick apology for this being so late. Second remember there is also a video version and an audio version, that you can watch from the site or download to your computer for later viewing.

Today’s TOL is about ROI, does it have meaning in the events industry? Recently I have been talking to some meeting planners and speakers about return on investment. It is a well-known phrase with in the financial circles. But can it apply outside the financial services? Is this an expression that can be used? Many people are arguing that in the meeting industry, you cannot use phrases like ROI for their meetings, because, how can you measure the return on investment in financial terms?

I have a problem with this because it brings the phrase down to just being a collection of words. There are a lot of words that we use that have started out in one place and have now become more than the original word or phrase. For example, an expression like “a chip off the old block” came from the old maritime of building ships out of wood. However, now means how similar to people are when they are related i.e father to son or mother to daughter.

This extends to brands, which is clever marketing over the years to now be recognized for more than its original use. For instance Hoover is now commonly used as the name for a vacuum cleaner. Another example would be Google. From originally being just a search engine for the internet the word has become a metonym for internet searching.  This movement of words can also apply for ROI.

One of the speakers I was talking to said “We’ll be the laughing stock of the financial people because they know it’s about return on investment in terms of purely financial terms”. In reality, I have found that talking to financial people; they are welcoming the fact that what was traditionally enclosed in their industry has widened their perspective.

So what is ROI, and does it apply, does it have a wider application?

Let me give you an example; Recently my wife bought a Volvo. She likes Volvo, I like Volvo. My next door neighbor bought a Kia Ceed; another neighbor has bought a brand new Range Rover and my great friend from Canada has bought his wife a Lexus.

Each one of these individuals has bought their car for their own reason. Maybe it’s what they can afford in their pocket, maybe it is because they like the style of it, maybe it’s because of something specific that they want from that particular vehicle. Whatever the reason, there is a measurement that has taken place.  In their mind there is a value that they have placed on this vehicle. Return on that value would be over time. Whether they get to sell it and sell it for the right price, or whether they get the mileage out of it. Each one of those are having its own value in their mind. So the return on the investment of buying the car is something that we’ve proven over a period of time.

This is no different to the meetings and events industry. For whatever reason we hold a meeting, for whatever reason we hire a particular speaker, for whatever reason we do, or what it is that we are doing in terms of holding a conference or an event. There will be some sort of evaluation taking place; we may not call it ROI but it has taken place.

Some people want to keep the word locked up within financial services. The truth of the matter is value will be measured whatever name people want to use, hide or run away from. There will be a measurement! Who is in control of the measurement and how it is going to be measured is the real question? If that is thought out in advance, then measuring it later is so much easier. If it is left until after the event, then it can just go so wrong.

So ROI, used in the financial services, coming out of the financial services and began to be used wider and wider. I think it does the right thing. It makes people think; what are we here for? What we are trying to do and is it going to add value at the end of the day.  Adding value is the name of the game. And if we don not get our heads around that, where are we going to go? I am going to add value to my trip by borrowing my wife’s car.

Have a good month, see you next month.

– Paul

P.S – Remember to check out the Be Inspired series at theleadershiplounge.com.

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