Total Return on Investment states just how much value is created per unit of investment made. We need to look at the total value created by all programs and activities to gauge the real value being created so we can maximize that value. The following questions are important questions that need to be asked and answered to measure and ultimately, maximize the total value we create.
- What is the program or activity being assessed?
- How accurate and detailed does the assessment need to be? The less accurate and detailed the assessment, the less effective the results.
- Who affects and/or is affected by the program? Which groups (and subgroups) of people or organizations? Who is going to use the information produced, and what decision or decisions need to be made?
- Who has changed and/or who will change?
- How have they changed, including positive and negative, and expected and unexpected changes?
- How long will the organization be accountable for the change?
- How can the change be measured?
- Based on that, how much change happened?
- How much change was caused by our activities?
- What is the relative importance of the different changes from the perspective of those experiencing them?
- How does whoever is using the information get assurance that the level of detail, accuracy and completeness is adequate for the intended decision or decisions and that the information supporting the answers is transparent?
- Who will answer these questions?
After measuring the total value created by your program and the total return on investment, you will be able to assess if you have met your objectives, if they are the right objectives, and whether you should change what you do.
If any of these questions are not answered the risk of incomplete information increases and this increases the risk that either no decision or the wrong decision will be made. When these questions are not answered with the appropriate degree of rigor and transparency, usually the conclusion is that given more money there will be more impact. But this doesn’t help decisions when their are competing programs for limited resources. It also doesn’t say how effective the organization is in creating value, and it most likely will over-claim the value they are creating.