Written by two of the world's most well-known ROI (Return on Investment) gurus, this guide is indispensable for anyone involved in showing the value of money for projects and programs in governments, non-governmental organizations, nonprofits, and businesses. These range from human capital programs to marketing initiatives, technology implementations, systems integrations, quality and lean processes, public health initiatives, procurement procedures, public relations events, risk management policies, economic development programs, corporate social responsibility projects, public policy programs, branding activities, innovation programs, customer satisfaction projects, and everything in between.
In a step-by-step process, the book shows how to measure the success of projects and programs, including measuring impact and ROI (Return on Investment). This book also shows how to forecast the value of the project in advance and how to collect data during and after project implementation. It addresses improvements throughout the process so that the project delivers optimum value. In addition to businesses, this book is appropriate for governments, NGOs, nonprofits, universities and healthcare organizations.
As a reference for those who are seeking ways to assign value to what they have measured, the book will clarify and resolve much of the mystery surrounding the conversion of data to monetary values. Building on a tremendous amount of experience, application, practice, and research, the book will be based on the work of many individuals and organizations, particularly those who have been reaching the ultimate levels of accountability using the ROI Methodology. Developed in an easy-to-read format and fortified with examples, tips, and checklists, this will be an indispensable guide for those who seek to understand accountability issues.
Table of Contents
Praise for Value for Money v
Foreword xxv
Preface xxvii
Value is Changing… xxvii
Need for a New Approach xxviii
The ROI Methodology: The Enhanced Logic Model xxix
We Can’t Measure Our Way to Success xxx
Flow of the Book xxxi
Acknowledgements xxxv
Authors xxxviii
1 The Value Evolution 1
The Value Shift 4
Why Now? 8
Challenges Along the Way 16
Final Thoughts 19
2 Six Ways to Show Value for Money 21
Six Ways to Show Value for Money 25
Barriers to Showing Value for Money 32
Final Thoughts 38
3 Needed: An Enhanced Logic Model 39
A Review of Models 42
Concerns about Current Models 47
How Does Your Current Model Stack Up? 60
Requirements for the Value for Money: A Measurement Process 64
ROI Methodology 65
Terminology: Projects, Solutions, Participants 66
Final Thoughts 67
4 Introducing the ROI Methodology 69
Types of Data 70
The Initial Analysis 75
Using Design Thinking to Deliver and Measure Results 77
The ROI Process Model 78
Operating Standards and Philosophy 87
Implementing and Sustaining the Process 87
Benefits of this Approach 88
Final Thoughts 91
5 Start with Why: Align Programs with the Business 93
Impact Measures are Critical 96
The Challenge 97
The Alignment Model 98
Payoff Needs 99
Business Needs 109
Final Thoughts 118
6 Make it Feasible: Select the Right Solution 119
Performance Needs 122
The Performance Dialogue 122
Use Analysis Techniques 125
Learning Needs 131
Preference Needs 134
Matching Solutions to Needs 135
The Matrix Diagram 136
Selecting Solutions for Maximum Payoff 138
Final Thoughts 140
7 Expect Success: Design for Results 141
The Power of Expectations 144
Defining the Success of Programs 147
Designing for Results at Each Level 149
Developing Objectives at Multiple Levels 152
The Power of Objectives 160
Defining Roles and Responsibilities 162
Planning the Evaluation 166
Final Thoughts 172
8 Make it Matter: Design for Input, Reaction, and Learning 173
Communicating with Results in Mind 174
Changing the Role of Participants 177
Creating Expectations 178
Think ROI 181
Design Input for Results 183
Design Reaction for Results 187
Design Learning for Results 193
Data Collection for Input, Reaction, and Learning 194
Timing of Data Collection 197
Final Thoughts 199
9 Make it Stick: Design for Application and Impact 201
Data Collection for Application and Impact 204
Monitoring Business Performance Data 219
Selecting the Appropriate Method for Each Level 222
Timing of Data Collection 224
Built-In Application Tools 226
Involving the Participants’ Manager or Significant Other 230
Final Thoughts 235
10 Make it Credible: Isolate the Effects of the Program 237
The Importance of Pinpointing the Contribution 240
Preliminary Issues 242
Quantitative and Research Isolation Methods 244
Qualitative Isolation Methods 254
Select the Method 263
Final Thoughts 264
11 Make it Credible: Convert Data to Monetary Value 265
The Importance of Monetary Value 267
Key Steps in Converting Data to Money 270
Standard Monetary Values 272
When Standard Values are Not Available 281
Selecting the Technique 290
Final Thoughts 295
12 Make it Credible: Identify the Intangibles 297
Why Intangibles are Important 299
Measuring and Analyzing Intangibles 304
Final Thoughts 313
13 Make it Credible: Capture Costs of the Program and Calculate ROI 315
The Importance of Costs and ROI 319
Fundamental Cost Issues 320
Specific Costs to Include 325
Cost Tabulation in Action 328
The ROI Calculation 333
Other ROI Measures 342
Final Thoughts 343
14 Tell the Story: Communicate Results to Key Stakeholders 345
The Importance of Communicating Results 352
Principles of Communicating Results 355
The Process for Communicating Results 357
Step 1: Analyze Reason for Communication 359
Step 2: Plan for Communication 359
Step 3: Select Audience 360
Step 4: Develop Reports 363
Step 5: Select Media 363
Step 6: Present Information 370
Step 7: Analyze Reaction 378
Final Thoughts 379
15 Optimize Results: Use Black Box Thinking to Increase Funding 381
Process Improvement is the Key: Black Box Thinking 383
Making Adjustments in Programs 387
The Timing of Changes 390
Increasing ROI 393
Influencing Allocation 396
Final Thoughts 400
16 Forecast the ROI 401
The Importance of Forecasting ROI 407
The Trade-Offs of Forecasting 411
Pre-Program ROI Forecasting 413
Forecasting with a Pilot Program 422
ROI Forecasting with Reaction Data 423
Forecasting Guidelines 427
Final Thoughts 429
17 Make it Work: Sustaining the Change to a Results-Based Process 431
Overcoming Resistance 433
Assess the Climate 434
Develop Roles and Responsibilities 434
Establish Goals and Plans 436
Revise Guidelines and Procedures 438
Prepare the Team 440
Initiate ROI Studies 441
Prepare the Management Team 442
Remove Obstacles 443
Monitor Progress 445
Final Thoughts 446
References 447
Appendix A 459
Appendix B 467
Appendix C 471
Index 473
