S1:Lesson Ten

Measuring Value for ROI

Your investment in this training has cost you both time and money.

When doing x10 thinking we are focused on creating real x10 value. Value that was not there before the x10 intervention but is now. Three ways to measure this x10 value are:

• DOLLARIZATION: The translation of the benefits of x10 thinking into the financial impact in dollars that these strategies may have is what we mean by dollarization. For example, multiplying a specific KPI by ten may be dollarized at $150,000 pa or $450,000 over the next 3 years. Or, a B2B product or an applied research service may decrease maintenance or security costs by 3%. This can be translated into dollars per annum over one, two or three years. Dollarization is a strategic financial skill that can be learned and practised.

• VALUATION: In this context, valuation is an extension of dollarization. After dollarizing, what has been the impact on the valuation of the asset? What is the added x10 value for house improvements or for a business’s future cash flows? In a new venture or start-up situation, what is the potential for success, growth, and, eventually, profits? The degree of difficulty in calculating a valuation can vary but the extra effort gives you an edge which is worth it.

• RETURN: What is the gain from an investment of time, energy or capital? The gain is called the return. There is a continual virtuous cycle between INVESTMENT > RETURN > INVESTMENT. The better the return from a previous investment the better will be the next round of investment. For example, if an investment of $1 million produces a return of $200,000 then (in a 50/50 split) $100,000 can be returned to investors as a dividend, and an extra $100,000 can be re-invested into the growth of the asset eg new plant, equipment, jobs. 

This return may also apply to investments of time and energy. If one hour is invested in doing a GBB for a client, the gain from this time and effort can be dollarized. Then it may make sense to do further GBBs for other clients. What will be the return for your business if you do ten GBBs? ‘Doing a GBB’ is the focused effort you make to map out how the return might be up to ten times the investment … or ROI x10.

READ here, or on page 28 of the coursebook …

MEASURE/PROJECTION: Measuring the future is called a projection. Projections are educated guesses and notoriously wrong. Nonetheless, when individuals and CEOs consider an investment they make a deliberate attempt to look to the future return on their investment (ROI).

Looking ahead over the next 36 months what do you feel may be the valuable benefits to you from your investment in this AIXIO training?

In what way might you dollarise this projected ROI?

Would you say your projection is conservative or ambitious?

13 thoughts on “S1:Lesson Ten

  1. Despite my age (77) I am still enjoying my advising work and intend to keep expanding my knowledge in the areas of business I have built up expertise in to date as well as taking on additional work to assist an associate to modernise his accounting practice.

    The use of the AI (ChatGPT) has already been useful in putting forward cases for future investments for my major client – the ability to research quickly and provide lucid arguments around key decisions is clearly a powerful aspect of ChatGPT.

    My ongoing guiding mind memes 1. – the only “constant in life is change” and 2. – the “only certainty is uncertainty” and 3. – “it’s only a problem until you find a solution” still are relevant to my life..

    However, I now see that Chat GPT means that any problems or issues can now be readily dealt with in a more systematic manner at a faster rate using than I could have previously.

    I now expect to be able to provide increased value to clients due to acquiring an understanding of this tool and increase my monthly charges substantially to various clients that I advise on an ongoing basis.

  2. To me this A1x10 training has come at right time may be a year before retirement. I look forward to enlisting it as one of the products I am developing in this transit period to be in my consulting portfolio. I will however dive deep into practicing to develop my GBB skills with the help of ChatGPT.

    As first step in the year ahead I target to train at least 5 people including my two boys before I roll it out to the public in general where I trust with the enthusiasm generating around the use of AI, I will hit over x10 in my ROI plus all the qualitative benefits that will come with it in all the other life strategies. This is a very conservative projection – I see myself hitting the ground flying.

    Again, thank you so much Michael for the compliment.

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