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09/15/2014

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I am puzzled as to the distinction between costs and investments. Both represent expenditures of funds to acquire resources used to provide a product or service at a profit. While the ROI formula treats costs as a reduction in the numerator and captures investments in the denominator, an ROI is improved whenever you reduce either of them without diminishing your realized benefits. No well-managed company spends a dollar of investment more freely than a dollar of cost if the benefit doesn't justify it.

Requiring an ROI or a positive cost/benefit from labor dollars does not diminish or crowd-out strategic conversations. It certainly impacts the content of those discussions and focuses our action on plans that provide returns sooner rather than later.

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