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What Is Your ROI As A Corporate Asset?

July 9th, 2012

     We spend our time constantly assessing financial results, retooling forecasts, and debating the legitimacy of OpEx or CapEx spend. However, when was the last time that you sat back and calculated your personal ROI and the contribution margin you deliver for your company? Whether you are a candidate in transition, or a current member of the Executive team, are you ensuring that you are delivering the proper value?

      It’s rather easy to look at the majority of the positions in a company and determine the value those positions deliver.  Whether you are looking at overall revenue per employee metrics, new sales generated by a new channel manager, or the improvement of collections through a new Credit position, it’s a relatively basic calculation. However, what is the multiple you assign for senior Finance positions, particularly a CFO position?

     First, have you determined what the necessary overhead is to support your position? This will be an all inclusive figure that should include everything from salary, benefits, and other compensation….to any travel and related OpEx considerations. You need to figure out your “all-in” number.

     Second, are you clear about the expectations on your position? Are you being tasked with a turnaround, overall EBIT growth, or other projects that will result in improved operating metrics? Are you setting additional goals that will add to the EBIT-multiple your position will generate? Can you look back at your results over the last 2-3 years and see the value you were able to deliver as a result of your direct involvement and guidance?

     Although we are constantly dealing with nothing but firm metrics and comparisons against historical results, we have an obligation to deliver the highest achievable multiple for the investment that is being made for us to have a seat at the table. Whether that multiple is a 10x, 20x, or higher, you better be able to quantify what your contribution is…or will be. It’s absolutely critical to assume the role of asset rather than expense.

Thanks for reading…

Jeffrey Ishmael

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