This diagram represents a holistic metric we developed for a system of charter schools in California in 2009. It illustrates the connections to various inputs (influences) and outputs across a wide range of stakeholders. You can see how this might apply to private sector firms in a similar situation. Examples would be Sustainability, Triple Bottom Line, Brand Experience, Non-Profit institutions, Charities and so forth. The denominator (1 + change in operating expenses%) is critical as it prevents the ratio (VCI or ROI) interpretation from “blowing up to infinity” whenever the operating expenses are not changing. It also shows the performance advantage for reductions in operating costs, even while the numerator (chief value metric) is static. VCI is “Value Creation Index”, which is more generic meaning than ROI, “Return on investment, which is typically represented in monetary expenditures and revenue (or profit) returns. This metric and the associated diagram can inspire scorecards or dashboards, where the values, changes and trends are displayed. (click image to enlarge)
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