When you really break it down, there is only one measure that really drives results. I call it Return on Energy:
Results Achieved ÷ Effort
This is a contextual subjective measure, not a scientific one, so please don’t get all analytical on me. Also, I’m not trying to be philosophical with this blog, so please stick with it and read to the end.
If the result is less than 1, then it means that what you achieve isn’t worth the effort you put in. If it’s 1, I’d say why bother, that’s just break-even and it gives you nothing. If you can achieve 3+ then it’s really worth doing.
ROE is measured on how you feel about an outcome as a result of the effort you put in:
ROE<1: chances are you’ll feel frustrated, you’re not making any headway, in fact you worry about future outcomes, it feel like you are going backwards. You question whether you should just pack it all in
ROE=1: mild frustration, you feel like you are marking time and going nowhere. Maybe in a bit of a rut
ROE >1-3: contentment. You are moving forward, your actions are purposeful and produce results. Life is pretty good
ROE3+: your energy is self perpetuating. The results seem effortless, your strategy is right, what you do is exhilarating. It inspires yourself and others.
Our actions everyday are driven by how we feel. How we feel is driven by what we think.
THINK → FEEL → ACTION
So if how we feel (ROE) sits in between our thoughts and actions, step 1 must be to focus our thinking on the actions that will produce the results that make us feel ROE3+. If we are ROE3+, we are truly thinking and acting strategically.
When you use ROE as a model to determine what effort you put into which activities in your business, you can prioritise your actions based on likely results. After all, don’t we enjoy doing the things that make us feel good?
- Going to watch your son Rugby versus cleaning the pool.
- Developing a solution for a client that adds significant value to them versus doing your firm’s book work
- Taking 3 hours out every Friday morning to clear your head and develop strategies that will produce ROE3+ results and then implementing them
In my previous blog post Charging Hours is Only Part of the Revenue Equation owners of businesses focus too much on doing the work and squeezing as much as possible out of the orange they currently have. Instead, as the leader of the business, it is your responsibility to drive priorities and action plans to produce the results. Remember a fish rots from the head down. If you use an ROE approach to action planning and you are currently ROE<1 or ROE=1, then don’t be disillusioned, many people are.
What’s the answer? Work out the things that you are passionate about and love doing, and only do these things. If you don’t, then you’ll stay ROE<1 or ROE=1 and you’ll continue to feel frustrated, stressed and disillusioned. What your personal actions are in the business, as the owner, as the leader, will dictate the ROE of the business. Step 1 is to get yourself ROE3+ and your business will follow. The answer is in your head, trust your instinct.