Ganpati Bappa is here and will be with us for 11 days. Visiting pandals, observing the rituals, the delicacies and the prasad that we get is super.
In one such pandal I happen to meet a gentleman who was the VP HR of one of the Multi National Company. When I mentioned that our firm specialises in ROI, he raised his eyebrows; ROI that is very technical he said. Indeed it is I mentioned.
Following conversation took place...
VP HR: Our company spends a lot on training and HR activities. Yet they have never insisted on ROI. So there is no big deal about it. What will happen if we do not calculate the ROI?
ME: (Probing further). Spends! Why do you call it spending? What is the main objective of any company?
VP HR: Well, aa..., Don't know (silent). Of course the main objective of any company is to make profits.
ME: Here lies your answer you see. Your company perceives all the budget allocation as spending. When do you feel your company will perceive that all these are investments and not costs?
VP HR: Well when we start showing the returns.
Me: And when do we call it as returns?
VP HR: When we show the ROI.
ME: That is good. So now you have given the answer to your question- what will happen when you do not calculate the ROI.
VP HR: So how do we initiate the process. (In the midst of the Ganpati rituals our converation was getting very technical).
ME: 2 things need to be done with immediate effect
1st - Top management buy-in
2nd - Total cultural change, where every one in the department; that includes HR, L&D or training, admin, finance, marketing, sales, legal,purchase, production is tune in with the ROI process. Where every single person is aware that a company makes huge investment in them and they are bound to give measurable returns so set a multiple ROI.
Once the above things are done, setting ROI process is very easy...
VP HR: So we are getting somewhere.
ME: Of course you are. Unless the HR is convinced that ROI is the need of the hour and that HR can become a profit center, it is difficult to get a management buy-in. As there is no management interest, budgets are not allocated. We get trapped in the viscious cycle and every thing is considered as costs.
I left him with a couple of questions to probe on...
Do you ponder on such questions.... Do write to me on wagle.sonali@gmail.com
In one such pandal I happen to meet a gentleman who was the VP HR of one of the Multi National Company. When I mentioned that our firm specialises in ROI, he raised his eyebrows; ROI that is very technical he said. Indeed it is I mentioned.
Following conversation took place...
VP HR: Our company spends a lot on training and HR activities. Yet they have never insisted on ROI. So there is no big deal about it. What will happen if we do not calculate the ROI?
ME: (Probing further). Spends! Why do you call it spending? What is the main objective of any company?
VP HR: Well, aa..., Don't know (silent). Of course the main objective of any company is to make profits.
ME: Here lies your answer you see. Your company perceives all the budget allocation as spending. When do you feel your company will perceive that all these are investments and not costs?
VP HR: Well when we start showing the returns.
Me: And when do we call it as returns?
VP HR: When we show the ROI.
ME: That is good. So now you have given the answer to your question- what will happen when you do not calculate the ROI.
VP HR: So how do we initiate the process. (In the midst of the Ganpati rituals our converation was getting very technical).
ME: 2 things need to be done with immediate effect
1st - Top management buy-in
2nd - Total cultural change, where every one in the department; that includes HR, L&D or training, admin, finance, marketing, sales, legal,purchase, production is tune in with the ROI process. Where every single person is aware that a company makes huge investment in them and they are bound to give measurable returns so set a multiple ROI.
Once the above things are done, setting ROI process is very easy...
VP HR: So we are getting somewhere.
ME: Of course you are. Unless the HR is convinced that ROI is the need of the hour and that HR can become a profit center, it is difficult to get a management buy-in. As there is no management interest, budgets are not allocated. We get trapped in the viscious cycle and every thing is considered as costs.
I left him with a couple of questions to probe on...
Do you ponder on such questions.... Do write to me on wagle.sonali@gmail.com
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