The Return on Investment (ROI) from a Strengths Intervention

The Return on Investment (ROI) from a Strengths Intervention, or How to Add $1Million in Revenue Without Adding More Expense

By Ryan Houmand, Qwerke CEO and Gallup-Certified Strengths Coach

One of the compelling statistics from all of the research behind the use of the Clifton StrengthsFinder is that “People who learn to use their strengths every day have 7.8% greater productivity.”  This is from a study of 1,874 individual employees, most in sales functions, after a strengths intervention.

There are lots of ways to measure productivity, but a good general definition is the ability to do more with the same resources.  Time is a resource that spans all functions and occupations and so for the purpose of this analysis, we will use time as our measure of productivity.

If we assume a 40 hour work week, a simple way to look at this would be to calculate how much time is 7.8% of 40 hours.

• 40 x .078 = 3.12 hours per week.

So, assuming that an increase in productivity because you are doing things faster and more efficiently, it should leave you with 3.12 extra hours per week to do either more of the same productive work of focus on other things.

Converting that to hours per day you get:

• 12 / 5 = .624 hours per day

Since no one has a watch that tells time in decimal equivalents we convert this into something we can grasp, minutes per day:

• .624 X 60 = 37.44 minutes per day.

So, every day that you get to use your strengths to do what you do best, should leave you nearly 40 minutes per day to focus on other things, or of course, more of the same thing and get more of it done.

If you’re a manager, now that you have this increase in productivity, it would be nice to know when you can achieve an FTE (Full-time Equivalent) based on all this strengths focus.  To determine this, you perform the following calculation:

40 hours per week divided by the increased productive hours per current FTE, or:

• 40 / 3.12 = 12.82!

This is the cool part, say you have a team of 13 people, if they all have a productivity gain of 37.44 minutes per day, you get an FTE of productivity.

Taking this further, how much revenue to you have to add to justify hiring another FTE?  Let’s assume a median wage of around $50,000.  It is generally accepted that to add a new employee it is going to cost you at least 2X the salary when you factor in hiring costs, training, salary and benefits.  Conservatively a new employee is going to cost you $100K.  To justify a new employee you have to add something more than $100K in revenue or you’re losing money by hiring.

Helping people use their strengths every day will allow you to add that new business revenue and it goes almost 100% to the bottom line (profit).  Only the cost of a strengths intervention, which should include a qualified coach will impact that almost pure profit.

What’s more, your employee engagement will go up because people will start loving what they do.   Likewise, your employee retention will rise, and clearly your profitability will increase.

Let’s take this one step further.  Assume you’re a CEO of a company with 10 teams of 13 people.  Applying strengths across your organization you can expect 10 new FTEs worth of productivity.  You are already going to be more profitable by this alone.  However, now with some management finesse in arranging the workload properly you could add – using the figures above – $1million in new revenue from sales and theoretically, should not need to add any new employees – the most valuable AND most costly resource you have on your P&L (Profit & Loss Statement).

Play to your strengths!