ROI is stupid

Let me say, I love math and statistics. In the past I’ve actually spent time figuring out how quickly I could get out of debt if, say, I didn’t eat at all for a year, or only ate a little bit, or didn’t ever drive or lived in my car or…. Looking at these kinds of figures, seeing the return of the actions I take, I love that. But when it comes to small business, small nonprofits and people, I think ROI is a massive waste of time.

Before I go too much further let’s define what I’m talking about by ROI for those of you that may not know (and let’s say this is my definition from what I’ve learned since the time that I didn’t know!) ROI stands for return on investment (think cost/benefit analysis). It means measuring and analysing the amount of return (in terms of money, followers, publicity, whatever) for the amount of investment (in time, money, whatever). The idea sounds great. After all, don’t you want to know if what you’re doing is paying off, or if what you’re considering doing is going to be a good use of your time? Of course you do.

But here’s where my problem with ROI starts. You’re NOT an idiot. Really.

Think about your regular life. Don’t you do this examination all the time? You went to a party last night. You dressed up and bought some new clothes. It either went really well and you met some people and had a great time, went OK and you made a few connections or went horribly, you met no one and you poured red wine on that new white sweater. You file that away in your brain as either worth your time or not. You didn’t need to do a bunch of analysis… you knew it inherently. And there’s a couple of other things you know inherently too.

First, you know that asking about the return on your investment at the beginning of a relationship is a big fat no-no. You don’t ask your date, on the night of your first date, where this relationship is going. You might get an idea that this person is NOT for you, but even then we all know people who thought this about the love of their lives when they first met them. Besides, this is just an analogy. We’re really talking about social networking, not dating… spending a bit of time with something you don’t like isn’t quite as painful as spending time with a person you don’t like!

So we know to wait a bit before we jump to conclusions or expect results. We also get the idea that, just like relationships, we get out what we put in. We don’t expect a person to provide everything we’ve ever wanted and needed with no effort on our part. For that matter we don’t expect one person to provide EVERYTHING we’ve ever wanted and needed ever. That’s why we have more than one friend…. And when it comes to a business or nonprofit that’s why we have different tools. Some are good for raising money, some for growing connections (that might later raise money), some are good for spreading publicity (that might later grow connections or raise money). We don’t expect one tool to do everything and while it’s nice to think that one day, way off in the future we’ll find that special service that has everything we need, in the end we really don’t want all of our eggs in one basket do we? What would happen if that service died. It’s good to have at least a few different tools to lean on.

And this is why I hate that horrible, “but what’s the ROI on this” discussion that happens every time some new idea is presented. It doesn’t take into account our own innate intelligence. And it tries to turn everything into numbers.

Here’s an idea… how much time did you spend trying to determine the ROI on something? How much more useful would it be if, instead of analyzing the return on something you haven’t even started, you spent that time actually DOING it? If you spend a huge amount of time in analysis before action won’t you often kill any enthusiasm you might have had for the idea by beating it to death with math and analysis (and endless talking!)? How well will that idea go over if there’s no energy left in you to be excited about a project? How well will that relationship go if, from the very second you met the person, you’re only thinking about where it’s going? What if that person doesn’t wind up being the love of your life, but in an unexpected turn through them you find a job you really love? Is that a waste? If you have such specific goals for your ROI you’ll miss all the kismet opportunities that come about unexpectedly.

So here’s my idea instead. Be smart. Plug in to a tool, whatever it is and spend some time there. Get a feel for it and take a personal note of your sense of ROI for you. Do you feel like you’re spending too much time on something? Hmm… are there ways to spend less time? Can you ask other people how they get a task done quicker? Can you learn something about it to make it faster? Then, after spending some time there, ask yourself if you think you’re gaining something from it. If not are other people in love with the idea? What are they doing differently? Can you get some feedback of ways you might change what you’re doing so you’re getting better returns? And finally, if this tool just doesn’t fit with who you are and what you love, is it time to break up?

Trust yourself. You already know the answers.

These thoughts were brought out by the recent Idealware report on “Using Social Media to Meet Nonprofit Goals: The Results of a Survey”. Not because they were really using too much math, but because they were asking nonprofits how they felt about a tool. Not very good “science” probably but likely just as valid. To summarize, it’s the same thing we all know… Facebook good, Twitter better. Here’s the link.

So, what do you think about ROI?


About Jessica Dally

A random blog about travel, personal transformation, riding motorcycles solo, social media and whatever else seems interesting at the moment. View all posts by Jessica Dally

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