Calculating Team Building R.O.I.

Before proceeding with an executive retreat or team building initiative, it is important for your executive team to assess the costs and benefits of such an initiative. The following steps will help you undertake such an analysis.

Step 1: Identify Situations

Focusing on the past year, please identify 3 specific situations, events or circumstances involving members of your team that could have been handled more effectively. Pinpoint the impact on business and results:

Examples:

• reduced efficiency and effectiveness in decision-making
• increased costs
• difficulty in completing an initiative
• delays

Step 2: Situational Analysis

For each situation, identify what it cost the company in terms of:

• time and money to resolve the situation
• opportunity cost (examples: customers or business opportunities lost due to poor decision making or because the team did not work cohesively)
• quantify time lost by multiplying time vs. the salaries of the parties involved in the situation

Step 3: Pinpoint Indirect Costs

Factor in indirect costs of situations such as negative impact on morale, turnover & and productivity, customer, & revenue losses due to poor decision-making or the erosion of team cohesion.

Step 4: Identify & Calculate Value of Opportunities

Identify opportunities that can be generated by more cohesive teamwork and pinpoint their value. For example, pinpoint a specific piece of business that was generated by improved teamwork and track the results in hard dollar value.

Step 5: Assess Total Impact

Add up the amount that would have been saved or generated if the team had been able to work together more cohesively.

Step 6: Calculate Proposed Investment in Team Building

Use these figures to:

determine time and budget requirements

determine what it would be worthwhile to invest in team building

set time and budget parameters

Step 7: Compare cost & time benefits to proposed investment