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Increasing ROI Increases ROI

Posted by Mike Wiersma

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Jan 2, 2020 8:00:00 AM

ROI to ROII know what you're thinking. First, What does ROI mean? And second, why and how does increasing ROI create more ROI? 

ROI is the abbreviation for return on investment. It is our ability to create more value with less cost or effort, but I think there is more to these three letters than just financial wizardry.

Your Return on Investment (ROI) is directly related to your Rate of Improvement (ROI). In other words, the faster you learn and improve, the better results you will achieve. If we focus on improving more quickly, we are more likely to achieve the goals we are striving for, financial or otherwise. However, we often wait for reactive triggers to improve, much like a favorite belt that now feels a little too tight. It's not hard to argue that improving faster is typically better than improving slower...so why don't we do it?

Rather than complaining about all the reasons why we can't improve faster, let's talk about some practical ways others have increased Rate of Improvement (ROI).

1. Contain the chaos.

How much of your day-to-day life is just reacting to what is in front of you? Take the time to prioritize, plan, and be purposeful with the time you allocate to "firefighting" activities. It might not mean you can eliminate all of the chaos, but you can at least select when and where you will deal with it. Reducing your unstructured activities, multitasking, and unplanned work will give you back the time needed to test new proactive ways of working. 

2. Seek simple first.

If the way you improve is not easily described, a pleasant experience, or applicable to your daily life, you're likely not going to engage in improvement work again or at least at a meaningful pace. Remember also that what seems simple for you is not necessarily simple for your customers, peers, or the boss. Keeping it simple allows others to engage, drive action, and build mutual accountability across teams. Make time for #SimpleCI.

3. Measure your speed, but pace yourself.

When driving your car, it's easy to know how fast you're going. Just look at the speedometer. When is the last time you looked at your improvement dashboard, and what does it say? If you don't have one, consider answering these questions: 

  • What was your last improvement activity? 
  • How long did you work on solving that problem? 
  • Are you solving the same problem over and over?  

Your ideal rate of improvement must be at a sustainable pace. Setting goals that don't keep sustainability in mind is why most New Year's Resolutions come to a screeching halt well before the middle of the year. This pace does and will get faster with time, but it is not an immediate light switch that you can simply turn on. Practice and repetition create hard-wire muscle memory. 

4. Go and see how others are improving.

Most likely, the problems you're trying to solve are not unique to you, your team, or the organization. There are very few problems that haven't already been addressed in the world; instead, it is the speed and effectiveness of sharing that is the barrier to everyone solving problems every day. Go and see, ask why, and try to adapt what you observe to fit your style and your current need. When is the last time you showed interest in how others are improving by actively listening to their stories?

5. Clarify the win.

A Return on Investment (ROI) suggests that there is a reason to improve. It is not just the financial ROI we are talking about here because there are many other ways to clarify and quantify wins. It could be an Emmy award, the World Series, or even being the proud parent of a high school valedictorian. Regardless of the success, if we can't describe it or measure it, we won't be motivated to achieve it.

6. Frequency matters.

If I wanted to get better at playing a musical instrument, driving a stick-shift vehicle, or leading team meetings, I would have to engage in the activity more often to build skill, capability, and confidence. One of my former music directors once stated: "There are no rehearsals; only performances." In other words, we are not just practicing for the sake of practicing but ensuring that each practice matters. Treat each repetition with focus, intensity, and discipline. Be careful, though; practice doesn't always make perfect. Instead, perfect practice makes permanent. 

7. Get a health check.

Most people don't enjoy going to the doctor, and most don't like hearing that they should be doing something different to improve their health. However, by actively engaging in routine proactive check-ups, we can often diagnose attitudes, behaviors, and circumstances that might be preventing a faster recovery. The same is true with your rate of improvement. By taking the time to assess the health of your current situation and then taking one small step based on what we learned, we can often find a better way that day. The health of any process and customer experience depends on our ability to signal, swarm, solve quickly, and share problems and ideas. If you aren't doing it well, get a health check, and take a prescription that will help you get faster. When was your last improvement health check?

8. Run the next experiment.

There are always obstacles and barriers in our way to our next goal. If there weren't, we would already be at our goal. However, too often, we plan, debate, design, discuss, align, evaluate and assign blame to the obstacles well before we have evidence to know if we have made or can make something better with a quick test. Don't just play opinion sports, but bring the data before and after the test to help craft the next question to be answered. What experiment can you run today? This will begin shifting you into a more action-oriented person.

9. Seek new knowledge.

Sometimes our most significant barrier to improving (faster) is just understanding the different tools, techniques, and methodologies that are available. Many of the necessary improvement tools can be learned from reading a 1-page lesson, watching a short video, or by having a coach or practitioner demonstrate the tool or concept in just a few minutes. For others attending formal training or joining a community of practice can be a huge accelerator. What do you do to seek new knowledge? 

Hopefully, these ideas will help propel you to a faster return on investment. What do you do to increase your rate of improvement? 

 

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