In the business world, there’s a standard metric that helps one determine if a project was a good financial investment. The metric is the “return on investment” or ROI.
Business leaders can often be heard walking through the halls spouting sentiments like, “Hey Bob, what was the ROI on that last research project?” Positive ROI means you got more out of the project than you put into it. In other words, if a company spends $25,000 on a research study and the results of that study help them grow sales by $100,000, then that’s a very positive return on investment.
It’s a simple equation that sums up the definition of success on a project. It’s really the only metric that matters in the business world and it matters a lot.
As it should.
You can also apply the same ROI equation to your personal life. ROI is why you want your child to get good grades when you’re paying for private school, why you don’t want to sell your house in a down market and why when you were growing up, your mother always insisted that the milk that was past its expiration date was “perfectly fine to drink.”
People want to get the most out of their money.
As they should.
But maybe there’s an additional metric that we don’t talk about in the business world or in life nearly enough. Earl, a mentor of mine, told me about it yesterday and I’m in love with it.