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December 28, 2011
Most all of us have interest in increasing the value of our own personal investments. Over the last several years there has been much concern with the economy, the market and how it affects our livelihood as it pertains to our investments. These same questions occur within Boards and management as they work to grow the value of the companies they manage and/or oversee.
One age old benchmark or metric that has been used by companies and individuals over the years is “Return on Investment” or ROI. A simple calculation of taking your year-end profits and dividing by the Stockholders Equity determines what your ROI was for the year (example: If you made $100,000 profit on an investment of $1,000,000 you would have a ROI of 10%. 100,000/1,000,000).
Within a company there are several ways to increase profits. The more successful a company is at driving these areas typically the better the ROI will be.
Now here is the challenge or opportunity for each and every employee within a company they work for. You as an individual or within a team can directly or indirectly have a positive effect on one of the processes above. Your own observation and/or creativity with effective communication can assist with being a “change agent” to improve the Return on Investment for your company. The results end up being a win/win situation with much gratification and feeling of accomplish for all!