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Failure to measure returns on Investment 8 January 2016


In consultancy we often hear how businesses say they “invested heavily” in areas such as marketing, brand awareness, staff and management development but have been disappointed with the “return”.

In many cases these statements are made based upon “gut feeling” and are not backed by statistics or financial data. This often leads to the follow up question of “but how can I measure the return on holding a staff training day?”

The problem often lies at the very outset of these “initiatives”. Management may decide “it would be a good idea to have a training day” for staff and then some else might say “yes and lets combine it with a social or bonding day!” Such initiatives will be doomed from the outset as there are no clear measurable objectives or outcomes nor any clear idea as to what can be measured and how.

The only lasting memory might be of staff getting too drunk but unlikely that anyone will remember the training subjects!

In order to obtain a return from any initiative it is essential to:

  • Decide on specific objectives

  • Decide on the most cost effective way of delivering these

  • Don’t mix objectives or purposes of the initiative

  • Find a way of measuring results either qualitative or quantitative

  • Assess the return on investment before repeating the exercise

A recent finding showed that over 80% of businesses failed to measure their return on investment in management development!


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