ROI is often the wrong metric.

Think of some common business metrics used to measure whether an action or decision is the right one.  Of the top of my head I think of:

  • Return on Investment
  • Return on Assets
  • Earnings per Share
  • Internal Rate of Return
  • Productivity Increase/Improvement
  • Payback Period
  • Customer Turnover

Each of these have one thing in common: they force you to think short-term.  Not one of these metrics endorses decisions that payback five years from now, let alone 10 years from now.  This is MBA thinking at its finest.  Make the best decision for today, let the future come to us.

Why do businesses or people start blogs?  It’s a hard, painful road to build an audience and online reputation.  You have to take valuable hours and devote them to the effort week in and week out.  Often you will use your best people for it.  Even attempting to measure success will be difficult, if not impossible.  The ROI is non-existent in the short-term and probably even the medium-term.

Think of new technology/development and trying to open a new market.  There’s no telling when the efforts will pay off but the efforts could in big ways.  The payoff over the long term could be an entirely new business and 200% growth.  But over the next 3 years there may be a net cost.

Patience and risk is part of the game we sign up for.  Pick the metrics that support you over the right time frame.

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