Return on Investment? — What about Return on Change?
by Tom Mandel
I’m starting to think that we need a new way of thinking about the ‘return’ on new technologies like those comprised by Enterprise 2.0. The traditional metric of “Return on Investment” is really not useful when discussing disruptive steps forward.
The most important ‘returns’ from these new technologies can’t be known in advance, and certainly they can’t be quantified in terms that come from the very contexts they are about to transform! How would a CxO have framed the ROI of telephones in a world where they weren’t in existence? Not possible.
Hence, I propose the idea of Return on Change — ROC — as a new framework for discussing the benefits of adopting the new. ROC can only be communicated in the form of stories — or maybe it would be better to call them scenarios — that envision the possible serendipities, singularities, black swans, or whatever term you prefer when you talk about the unexpected and transformative.
The term “black swan” I take from Nassim Taleb’s book of that title, which I think is essential reading for anyone who wants to investigate this complex world we live in and think we understand. The term refers to the singular, unexpected events that statistics cannot explain, and Taleb argues convincingly that there are more of these than you might imagine.
The idea is relevant to our subject — the influence of new social technologies on business. At its heart, ROI is a form of extrapolation — but you cannot extrapolate the new and change, however fervently you think you can.
Hence… Return on Change. Lets start using this term and thinking about what its radicalness means for the future of those who commit to The New.
