Journey from ROI to IOR. What is next?
When I went to Business School, I learnt that in any business we need to invest in the business and then expect a return out of it. This was Return on Investment. It was logical.
As I entered the corporate world, I faced steep targets in almost every job, usually without a strategy. Therefore, a plan for investment was out of the question. Usually, we were told to first create returns and then investment will be considered. We worked hard to create a business proposition and implement it without any investment. Once we succeeded in most cases management was kind enough to invest. I learnt a new management concept – Investment on Return (IOR).
Finally, I ended up working with a company where when the initial returns were demonstrated we were told to continue working similarly. There was no investment coming through. I learnt a new concept – Return on Return (ROR). While IOR was challenging, ROR was frustrating. I left the job and moved on.
What is the learning?
Every organization needs investment to grow. Teams are a microcosm of organization. The teams collectively create an organization. When managers set, or are forced to set, goals without discussing and providing resources, it is frustrating for the team members
While resource scanty organizations succeed more than well invested organizations, grossly underinvested organizations fail. Resource rich organizations do not innovate as much as resource scanty organizations. Resource deprived organizations are frustrated. Eventually the frustrated teams give up and organizations stagnate and eventually die.
Resources may not always only include additional team members or physical or monetary resources. Information is also a critical resource. In many organizations, information is privy to tenured teams and held in functional silos. Leaders should ensure the silos are busted, and information is stored so that it is available cross-functionally on a need-to-know basis. This should address several resource problems.
If resources are provided in line with the goals, capable teams will be excited to deliver.
When managers set goals:
1. They should discuss the resources needed to accomplish the goals.
2. Explain to the team members if the goals can be accomplished without the resources the teams are asking for.
3. Identify the information needed and sources of information. Use inter-functional relationships to mobilize the information needed.
This will ensure that teams meet the stretched goals set for them.
Please let me know how did you help your teams with the resources to achieve their goals?