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Return On Vision

Imagine checking your voicemail messages and hearing the following company-wide broadcast:
"This is the corporate communications officer with some great news for all employees. Management has just announced that third-quarter earnings per share were sixty cents, an increase of 11 percent over fifty-four cents per share for the same period last year. Third-quarter profits rose 35 percent. The company earned $73.8 million in the quarter; that’s up from $66.4 million from a year ago. Excluding discontinued operations, we earned $59.1 million. Best of all, ROA was 1.75 percent and ROE was 21.6 percent. Management thanks you for your contribution to these results."
Messages like this appear in employee voicemail and e-mail boxes every day, as part of corporate communication programs. In their efforts to improve communication, companies feed employees the only information they know how to convey: their financial data. But does knowing that the corporation's faceless stockholders earned six cents more per share because you knocked yourself out meeting departmental goals inspire you to work even harder?

Try reframing the message to make it meaningful to all employees:
"I have interesting news for all employees, customers, and stockholders. Management has just announced that third-quarter sales were higher than last year. That means more customers are choosing our products over our competitors. They obviously appreciate the superior quality you put into every item, and they value the outstanding customer service you provide every day. In addition, third-quarter profits rose 35 percent. Higher profits reflect your commitment to workplace safety. By keeping one another safe, you've eliminated costly accidents and increased productivity. And I'm happy to say we've accomplished these results while further reducing emissions into the environment. You should be proud of your achievements."
In truth, few employees understand the significance of terms like ROA (Return On Assets) and ROE (Return On Equity); maybe a handful know how to calculate it, and of that handful, one or two can imagine how their individual efforts might influence the stated figure. So why talk about ROA and ROE at all? Usually, it's because most leaders are at a loss for words, so they use numbers to fill that void.

To be an effective leader, you must be able to communicate inspiring messages that promote the organization's values. Possessing the ability to communicate your vision separates you from the great majority of business leaders -- all those bureaucrats who hide in the shadows, wishing they knew what to say, while relying on their media relations staffs to inspire the troops.

Stop worrying about ROA and ROE, and start measuring your ROV: Return On Vision.
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