• INSIGHT
WHY YOU SHOULDN ’ T ONLY BE THINKING ROI
By Arjen de Bruin , MD at OIM Consulting
In its most literal sense , ROI – or return on investment – is a profitability metric that refers to the business value derived from spend . It involves dividing an investment ’ s profit by its cost and is generally expressed as a percentage . So , if my ROI is 1:20 , it essentially means that for every rand I spent , I received R20 in profit ; also known as a hella good investment !
In theory , ROI could also include those metrics that are often less tangible and harder to quantify , such as value or benefit creation , which may or may not have a rands-and-cents figure attached to it .
The challenge is that – in a behavioural change context – it is not always that easy to quantify these benefits without a clear framework in place , and so we all too often default to the simple rands-and-cents calculation in its most basic form : the increase in profitability divided by the cost of a programme .
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problem-solving , we help our supervisors take true ownership of their day .
Proper planning and organising mitigate that reactive , knee-jerk response to issues that arise by removing the stress factor and minimising downtime while reducing the likelihood of risky behaviour , which may lead to a higher prevalence of accidents .
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Arjen de Bruin , MD at OIM Consulting |
OIM Consulting |
Ultimately , any organisation is in business to make money . We want to see our investments result in profit ; we need to see revenue growth over time . But if we only look at this one simple metric , it increases the pressure to show rapid and explosive growth – often at the cost of sustainability .
The danger of solely focusing on ROI is that it often entails costcutting while driving people to work harder . And while working hard is good , burnout is not . We want to trim the fat , but if we cut too deep , we might inadvertently damage the muscle of an organisation .
So , what do we look at instead ? We need to look at broadening our definition of value .
In our line of work , we focus on supervisor development within the mining environment . We aim to capacitate our front-line leaders to lead more effectively so that they can engage workers better , boost participation and positively influence safety outcomes .
And typically , when we have a more competent , equipped , empowered supervisor , we see a sharp upsurge in productivity . This has a direct correlation to tonnage yield as well as a reduction in the cost per ton , improving profitability .
Through a focus on coaching core competencies such as planning and organising , leadership and development , and analysis and
Good leadership and development increase employee engagement , creating buy-in and alignment to organisational purpose while setting the stage for a healthy workplace culture , which also positively influences a company ’ s bottom line .
Finally , analysis and problem-solving help our supervisors get to the root cause of reoccurring incidents , showing them how they can both proactively preempt , avoid or mitigate these incidences .
So yes , let ’ s not forget our rands-and-cents ; these are important . But let ’ s include proper frameworks that measure other variables as well , such as supervisor competency , safety , and employee engagement , when we set out to determine the value a programme brings to our business .
And let ’ s keep reassessing – before we start a programme , to give us a baseline ; immediately post-programme and six months down the line . This offers a more realistic read on the efficacy of our programmes . However , bear in mind that true sustainability will always be determined by an organisation ’ s leadership , and their willingness to keep embedding these practices and behaviours every day .
In the absence of a more holistic , complete metric , ROI is not going anywhere any time soon . However , let ’ s look more broadly than any one metric when measuring our impact and determining real value . •
• BUYER ' S GUIDE
AUTOMATION AND SENSORS
BEARING , VALVES & RUBBER PRODUCTS
BRAKE TESTING
46 • African Mining • September 2023 www . africanmining . co . za