Continuing from the previous blog about Gartner’s “death by ROI”… Gartner pointed out that “while our results were specific to the D&A [data & analytics] practice, it’s safe to assume any similar support function could encounter this same trap,” so the study’s parallels to corporate sustainability/ESG functions are indeed valid. For those wanting to avoid “death by ROI,” Gartner has two suggestions:
- As discussed by one chief data officer – “emphasize partnership and blurring the lines between her department and those it supports, highlighting that victory for her is when her partners think of her as an extension of their own team.” In my opinion, the two most important building blocks for this are (a) developing strong internal relationships and allies, and (b) having a deep understanding of your company’s business. But there is a risk to this approach as I wrote about earlier this summer.
- “Leaders should focus on the goals that matter to the organization and put all ROI conversations in that light.” To be honest, I find this point uninspiring.
- First, it is strange to suggest developing ROI in the context of the article/study about avoiding ROI, so it is somewhat counterfactual.
- Second, the example given is an initiative that reduced a company’s regulatory fines from $7 million to $1 million – perhaps not the best example. Definitive dollar values in this example make an ROI calculation easy (something not always available for ESG/sustainability initiates), and the end point still indicates substantial non-compliance – probably not something I’d emphasize.
Taking this path “does not mean organizations should abandon efforts at measuring the business value enabled by D&A or any other support function. The most effective leaders are able to shift the framework of their value assessment conversations grounded in the whole, rather than the parts.” Sustainability/ESG leaders understand this idea implicitly, but may not necessarily have the vocabulary to voice it effectively.
Sustainability leaders, staff and advisors: It can be easy to get sucked into the “death by ROI” black hole or to fall back on garbage economics. Before resorting to either, talk with colleagues in other support functions – especially those responsible for AI and D&A – to explore if your executives are open to a “No ROI” business case. If so, learn how you can adopt that approach and apply it to sustainability. Not only will you save time and frustration, but you show that you both partner with other functions and that you are up-to-date with the company’s internal philosophy.
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