{"id":1263,"date":"2025-12-21T16:17:30","date_gmt":"2025-12-21T16:17:30","guid":{"rendered":"https:\/\/debane.org\/franck\/?p=1263"},"modified":"2025-12-21T16:18:53","modified_gmt":"2025-12-21T16:18:53","slug":"how-to-decide-on-strategic-projects-why-roi-is-not-enough","status":"publish","type":"post","link":"https:\/\/debane.org\/franck\/how-to-decide-on-strategic-projects-why-roi-is-not-enough\/","title":{"rendered":"How to Decide on Strategic Projects- Why ROI Is Not Enough"},"content":{"rendered":"\n<p>ROI has become the default decision filter in most organizations.<\/p>\n\n\n\n<p>If a project has a strong return on investment, it moves forward.<\/p>\n\n\n\n<p>If it doesn\u2019t, it is delayed, reduced, or quietly abandoned.<\/p>\n\n\n\n<p>This approach feels disciplined, objective, and rational.<\/p>\n\n\n\n<p>It is also incomplete \u2014 and, in some cases, dangerous.<\/p>\n\n\n\n<p>Because ROI is designed to measure <strong>financial performance over a defined period<\/strong>, not to answer the questions that matter most to leadership:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Will this decision keep the company relevant?<\/li>\n\n\n\n<li>Will it reduce existential risk?<\/li>\n\n\n\n<li>Will it preserve the ability to adapt?<\/li>\n\n\n\n<li>Will it strengthen trust with customers and partners?<\/li>\n<\/ul>\n\n\n\n<p>Treating ROI as a universal decision tool creates a structural blind spot: projects that protect the future are systematically disadvantaged compared to projects that optimize the present.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>When the tool becomes the problem<\/strong><\/h2>\n\n\n\n<p>This tension is particularly visible in innovation and transformation initiatives.<\/p>\n\n\n\n<p>Many of these projects:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>deliver clear customer value<\/li>\n\n\n\n<li>strengthen strategic positioning<\/li>\n\n\n\n<li>build critical capabilities<\/li>\n\n\n\n<li>reduce long-term fragility<\/li>\n<\/ul>\n\n\n\n<p>Yet they often struggle to show a clean, credible ROI upfront.<\/p>\n\n\n\n<p>As a result, organizations end up doing one of two things:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>they reject projects that are strategically necessary but financially unclear<\/li>\n\n\n\n<li>or they artificially force benefits into ROI models that everyone knows are fragile<\/li>\n<\/ul>\n\n\n\n<p>In both cases, the decision process becomes dishonest.<\/p>\n\n\n\n<p>A simple question captures this limitation well. Written on a wall at the headquarters of <a href=\"chatgpt:\/\/generic-entity?number=0\"><strong>Zappos<\/strong><\/a>, it reads:<\/p>\n\n\n\n<p><strong>\u201cWhat\u2019s the ROI of hugging your mom?\u201d<\/strong><\/p>\n\n\n\n<p>The point is not that ROI is useless. It is that ROI is not the whole story.<\/p>\n\n\n\n<p>Some forms of value are real, essential, and strategic precisely because they do not fit neatly into a spreadsheet.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The real issue: all value is treated as financial value<\/strong><\/h2>\n\n\n\n<p>Most governance systems implicitly assume that all projects exist to maximize profit.<\/p>\n\n\n\n<p>In reality, projects create value in <strong>different dimensions<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>some ensure survival<\/li>\n\n\n\n<li>some create future options<\/li>\n\n\n\n<li>some strengthen robustness<\/li>\n\n\n\n<li>some build learning and capabilities<\/li>\n\n\n\n<li>some deepen customer trust<\/li>\n\n\n\n<li>some protect financial breathing room under uncertainty<\/li>\n<\/ul>\n\n\n\n<p>Using a single metric to evaluate all of them is a category error.<\/p>\n\n\n\n<p>This is why a different approach is needed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>A different lens: the Strategic Project Arbitration approach<\/strong><\/h2>\n\n\n\n<p>The <strong>Strategic Project Arbitration approach<\/strong> starts from a simple premise:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>Not all projects should be judged in the same dimension.<\/strong><\/p>\n<\/blockquote>\n\n\n\n<p>Instead of asking only <em>\u201cWhat is the ROI?\u201d<\/em>, leadership teams explicitly ask:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>What kind of value does this project actually create?<\/em><\/li>\n\n\n\n<li><em>In which dimension does that value exist?<\/em><\/li>\n\n\n\n<li><em>What trade-offs are we consciously accepting?<\/em><\/li>\n<\/ul>\n\n\n\n<p>This reframes decision-making from optimization to arbitration.<\/p>\n\n\n\n<p>Below are the key dimensions this approach explores.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>1. Continuity &amp; survival<\/strong><\/h2>\n\n\n\n<p>Some projects exist primarily to reduce existential risk.<\/p>\n\n\n\n<p>Examples include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>cybersecurity and resilience investments<\/li>\n\n\n\n<li>regulatory compliance<\/li>\n\n\n\n<li>reducing dependency on a single technology or supplier<\/li>\n<\/ul>\n\n\n\n<p>These projects often have weak or negative ROI \u2014 until the day they are needed.<\/p>\n\n\n\n<p>Their value lies in <strong>keeping the organization alive<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>2. Strategic optionality<\/strong><\/h2>\n\n\n\n<p>Other projects create future choices rather than immediate returns.<\/p>\n\n\n\n<p>They may:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>open access to new markets<\/li>\n\n\n\n<li>enable future pivots<\/li>\n\n\n\n<li>lower the cost of change later<\/li>\n<\/ul>\n\n\n\n<p>Optionality is rarely visible in financial projections, but it dramatically increases freedom of maneuver.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>3. Business model robustness<\/strong><\/h2>\n\n\n\n<p>Some initiatives make the business model less fragile:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>diversifying revenue streams<\/li>\n\n\n\n<li>increasing recurrence<\/li>\n\n\n\n<li>reducing exposure to cycles or single points of failure<\/li>\n<\/ul>\n\n\n\n<p>These projects may reduce short-term margins while strengthening long-term resilience.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>4. Learning &amp; capability building<\/strong><\/h2>\n\n\n\n<p>Many innovation projects exist to help the organization learn:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>about customers<\/li>\n\n\n\n<li>about new technologies<\/li>\n\n\n\n<li>about new operating models<\/li>\n<\/ul>\n\n\n\n<p>Learning does not scale linearly and cannot be fully predicted \u2014 but organizations that stop investing in it slowly lose relevance.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>5. Customer trust &amp; relational capital<\/strong><\/h2>\n\n\n\n<p>Some investments primarily strengthen relationships:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>improving customer experience<\/li>\n\n\n\n<li>increasing transparency<\/li>\n\n\n\n<li>delivering reliability rather than growth<\/li>\n<\/ul>\n\n\n\n<p>Trust rarely appears in ROI models.<\/p>\n\n\n\n<p>Its absence is immediately visible when it erodes.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>6. Time asymmetry<\/strong><\/h2>\n\n\n\n<p>A critical question often ignored is <strong>who pays when, and who benefits when<\/strong>.<\/p>\n\n\n\n<p>Some projects:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>cost immediately and pay off later<\/li>\n\n\n\n<li>or deliver short-term gains while eroding the future<\/li>\n<\/ul>\n\n\n\n<p>Understanding time asymmetry prevents organizations from optimizing themselves into decline.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>7. Financial sustainability (not ROI)<\/strong><\/h2>\n\n\n\n<p>Finance still plays a central role \u2014 but a different one.<\/p>\n\n\n\n<p>Instead of asking whether a project maximizes returns, the key question becomes:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>Is this project financially sustainable given the company\u2019s current situation and uncertainty?<\/strong><\/p>\n<\/blockquote>\n\n\n\n<p>A project may proceed with negative ROI.<\/p>\n\n\n\n<p>It should not proceed if it threatens the company\u2019s ability to endure.<\/p>\n\n\n\n<p>Finance acts as a <strong>guardrail<\/strong>, not a verdict.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What this changes in practice<\/strong><\/h2>\n\n\n\n<p>Using this approach:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>innovation projects no longer need to pretend they are something they are not<\/li>\n\n\n\n<li>trade-offs become explicit rather than hidden in spreadsheets<\/li>\n\n\n\n<li>leadership discussions shift from justification to intent<\/li>\n<\/ul>\n\n\n\n<p>The goal is not to remove tension from decisions.<\/p>\n\n\n\n<p>It is to make that tension <strong>visible, deliberate, and governable<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Endurance over optimization<\/strong><\/h2>\n\n\n\n<p>Profit remains essential.<\/p>\n\n\n\n<p>But profit is a condition of survival \u2014 not its purpose.<\/p>\n\n\n\n<p>Organizations that last are not those that maximize metrics in isolation, but those that <strong>invest deliberately in continuity, adaptability, and coherence over time<\/strong>.<\/p>\n\n\n\n<p>ROI tells you how you performed. Strategic arbitration determines whether performance will still be possible tomorrow.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>ROI has become the default decision filter in most organizations. If a project has a strong return on investment, it moves forward. If it doesn\u2019t, &hellip; <\/p>\n","protected":false},"author":1,"featured_media":1264,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1263","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Decide on Strategic Projects- Why ROI Is Not Enough - Digital Evolution<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/debane.org\/franck\/how-to-decide-on-strategic-projects-why-roi-is-not-enough\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Decide on Strategic Projects- Why ROI Is Not Enough - Digital Evolution\" \/>\n<meta property=\"og:description\" content=\"ROI has become the default decision filter in most organizations. 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