From an agrarian culture, humans have already somewhat developed the idea of a return on investment. From an agriculture standpoint it can be the value of a harvest expressed as a ratio over the cost, in terms of the seeds sowed, the resources exhausted up till harvest time. In nominal terms, it is about the money made or loss over time of investment expressed as a ratio against the money put in. But the real question is, whether this is an ex ante or an ex post concept. Whether it is used to assess performance that have passed or to foresee what lies before us.
I find it as a useful way of reflecting on what has gone before and to really help us assess the process that we have been through in order to get the return. But the world and the society seem to consider it more useful as a planning tool, to help make decisions on what to invest in, by collapsing all value into one dimension (usually money) and then instead of taking time as a resource as part of the investment, it becomes merely another parameter in the indicator (because returns need to be benchmarked against the time period as well).
I wonder if this puts us at the risk of glorifying the rosy planning picture over the actual execution. Where upfront reporting to investors and stakeholders seem more important than what happens later at presenting of results (either a credit-grabbing exercise or apologise-and-ask-for-forgiveness). Because we are so ‘forgiving’ in the back end, we may be concentrating the gains on most return on investment, and socialising its losses.
Is ROI your way of reflecting or a means of planning for you?