Enlightened Conflict

the science, and the lost art, of ROI

May 24th, 2017

choices-path-shopping-direction-decisions

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“… businesses want answers right away and many times high statistical reliability is not worth the cost it takes to achieve it.

 

Insights that point decision-makers to go “left” or “right” is innately good enough. Leaders are oftentimes not willing to pay for “turn left at a 30 degree angle” or “turn right at an 115 degree angle” because it may cost too much money and takes far too long to obtain those precise next steps through drawn-out methodologies.”

 

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Kuhn

 

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“Every great advance in science has issued from a new audacity of imagination.”

 

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John Dewey

 

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“Perfect numbers like perfect men are very rare.”

 

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Rene Descartes

 

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Well.

 

fire water contradiction ideas thinkThis is about how ROI gets abused in decision making and I am writing about that because the Trump administration issued their “national budget proposal” <which I fully acknowledge is simple a guideline of the administration’s desires> and immediately started ponying up all their “we made cuts where there was no evidence of appropriate results” justifications.

 

Some of those justifications are terrifying.

Some of their choices are terrifying.

 

As for the budget plan?  As one writer put it … “the math is terrifying.”

 

Cutting Medicaid would be devastating for all low-income Americans, but particularly for women and mothers: 45 percent of childbirths in the U.S. were funded by Medicaid in 2010, according to data from the Center on Budget and Policy Priorities.

Trump’s budget also cuts funding for after-school programs for children and support for domestic violence victims.

 

I am going to let other people tear apart the incredibly short sighted Trump budget plan <which, yes, has scraps of good ideas> and I will focus on the criteria it appears they focused on <excepting the parental leave initiative which was like placing a half-eaten M&M on top of a turd> — budget by ROI.

 

Budgeting by ROI.

 

Whew.

 

 

This provides me with another excuse to blast my generation of business leaders and how their misguided thinking has screwed up not only how business is conducted, in general, but how we think about business. Specifically about ROI … these hollow men hollowed out business of any of the ‘art’ and color which is associated with thriving businesses which contribute to society & cultural norms leaving at an empty husk of dollars & cents and black & white ROI decisions.

 

Look.

 

roi einstein

I am all for analysis and love quantitatively judging tactics and initiatives. But I also understand that <1>  numbers often do not always tell the entire story and <2> we far too often judge ROI on one specific outcome without assessing some value on some ‘ripple effect’ outcomes.

 

But, first, the numbers and ROI.

 

I wrote back in February that numbers have lost their mojo  … yeah … well … I still believe that … just in a different context.

 

In this case we are dealing with a generation of business people who have completely bastardized the use of numbers – stripping them of anything but the false veneer of what they call “simplistic stark truth.”

Now. ‘Simplistic stark truth’ sounds good … and it sounds really good in the business world.

 

And, yet, in this starkness there is found falseness. The falseness can be found in its lack of imagination, its lack of depth and its lack of seeing anything but ‘what can be measured.’

 

This stupid view of numbers wreaks havoc when viewing ROI analysis.

 

Now … back on November 13th 2016 I wrote about the Trump administration as the last stand of the old white men  <the business generation I continuously skewer> and discussed hollowness. And while I outlined a number of ‘hollow’ things which can be blamed on this generation in that piece I neglected to point one out — the hollowing of ROI.

 

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ROI.

 

ROI <return on investment> is a fabulous tool. It offers us every day unimaginative pragmatic schmucks an almost heuristic way to judge some fairly complex and complicated things in business.

 

But old white men hollowed ROI of anything intangible and along the way scraped away some of the most meaningful things associated with investment in their desire for simplistic “this led to that.” Certainly some investments have linear outcomes and results. But not all. And these hollow men in their black & white pursuit of profit, efficiency and outcomes became color blind.  Old white men started looking at people as equal to numbers & dollars and not organic organisms of less than linear productivity <in terms of Life actualization as well as business actualization>. These hollow men fell in love with numbers and began diminishing the value of humanity.

 

That is Trump in a nutshell.

 

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.......... hollow men making hollow decisions ......

………. hollow men making hollow decisions ……

Well.

 

I could argue this all happened because ROI analysis permitted a shortcut for business people — a thinking & decision making shortcut.

It permitted, and encouraged, an entire generation to not have to really think but rather fallback on “that’s what the analysis said.”

 

That is plain and simple lazy fucking business … not smart solid business.

 

I will not argue that a good ROI analysis can offer a quick spontaneous glimpse of truth viable snapshot … in fact … it was Ralph Waldo Emerson who stated that the growth of intellect is spontaneous.

 

Of course, he hadn’t been bludgeoned with measurement, ROI and data driven decisions.

 

Of course, he was also on the one who stated … what is the hardest task in the world? To think. And. We are all wise. The difference between create destroy pencilpersons is not in wisdom but in art.

 

And that is where Trump and his merry band of old white men doing this whole budget thing are most aggravating.

 

It is not that they cannot envision the art of decision making but rather they purposefully abstain from the art of decision making <and focus solely on ROI>.

 

It is not that they are incapable of holding two conflicting ideas at the same time but rather they purposefully choose to ignore one idea or thought for the one most supported by the science of ROI.

 

 

It is not that they are oblivious to the qualitative nature & benefits of budgetary decision but rather they avoid the more difficult defense of the qualitative to utilize the more easy, and lazy, rationale of the quantitative.

 

I don’t blame them specifically <although it is their budget blueprint> but it is the unfortunate legacy of that entire generation to do those things.

 

All that said.

 

While ROI seems a straightforward way to analyze … ROI, when evaluated properly, can be devilishly tricky … but when done well it can inform some great insightful decisions and ideas.

 

ROI, when evaluated properly, can be devilishly painful … like having the devil screaming at you type painful … and even when done well tends to dull <not sharpen> the good ideas.

 

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The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.

 

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F. Scott Fitzgerald

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But ROI, measurement … practical rewards & output … that is what we ‘do’ these days.

This seem o be our “how we conduct business handbook” these days.

philosophical-discovering-gravity

We seem to have forgotten the value of unsought discovery and the value of … well … the benefit of the benefit <I spent money which created ‘x’ outcome … which enabled this other ‘x’ outcome>.

 

We seem to have culturally decided consciously to … “inevitably we will show a failure of imagination.”

 

What do I mean ? Let me use a quote from Le Carre’s Tinker Tailor Soldier Spy:

 

 

 

“…in the hands of politicians grand designs achieve nothing but new forms of the old misery…”

 

 

 

In our failure of imagination in our analysis of existing programs and initiatives we come up with grand designs begetting new forms of old misery. But what makes today and this budget worse? These are supposed to be fucking business people and not politicians in place making these ‘grand designs’ <isn’t that what some people voted for with Trump?>.

 

I admit.

 

I am wary of how ‘we the people’ will move forward with regard to budgeting tough-choices-shopping-decisions-lifeand programs and policies and deciding what we should do to better America..

 

I am wary because I see little moving forward, no ‘trying to do what it takes to get there’ other than bludgeoning people with simplistic harsh solutions and no imagination to overcome the cries of ‘why waste money on something like this!”

 

I am wary because I see men of a generation who bastardized ROI analysis applying their own bastardized version of ROI thinking to people’s lives <under the guise of “applying it to people’s money/taxes” — no, they are not the same>.

 

I am a business guy.

 

I cannot envision running a business, or a government, without solid measurement, ROI & budgeting rigor.

 

But I also know from running a business with hundreds of employees that the greatness of an organization does not reside solely in some number … or some ROI analysis.

 

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“The true greatness of a nation is not measured by the vastness of its territory, or by the multitude of its people, or by the profusion of its exports and imports; but by the extent to which it has contributed to the life and thought and progress of the world.

 

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I tend to believe most of us every day schmucks recognize that ROI is part of doing business and insuring our hard earned money/taxes is used effectively.

But I also believe that most of us every day schmucks also realize that some things just cannot be measured solely by numbers.

 

 

I worry that this Trump administration is reflective of the lost art of ROI family choices tough decisions aheadanalysis and the value of discovery

 

In their love of money as ‘winning’ they have lost sight of the value of seeking what is beyond the horizon. They have devalued imagination to such a point that they most likely define imagination as measurable in an ROI analysis. In other words they take ideas and thoughts, even ones with no history, and embrace them not by saying “what if” and “what could be” but rather by grinding it through some veg-o-matic ROI machine to assess its true value.

 

And that, my friends, is how they came up with their “blueprint for a national budget.”

 

And that, my friends, is how they plan on running this country and making their decisions.

 

And that, my friends, is not how America does business … because it shows a failure of imagination and it is imagination, not ROI analysis, which drives real change and progress.

 

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“Imagination has brought mankind through the dark ages to its present state of civilization.

Imagination led Columbus to discover America. Imagination led Franklin to discover electricity. Imagination has given us the steam engine, the telephone, the talking-machine, and the automobile, for these things had to be dreamed of before they became realities.

 

So I believe that dreams–daydreams, you know, with your eyes wide open and your brain machinery whizzing–are likely to lead to the betterment of the world.

 

The imaginative child will become the imaginative man or woman most apt to invent, and therefore to foster, civilization.”

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Baum

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Enlightened Conflict