Identifying the ROI of Team Building

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 team work and pintpoint their value. This video gives a particularly strong example of a specific piece of business that was generated by improved teamwork as well as comments about team building from a variety or business owners:

Step 5: 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
content by Anne Thornley-Brown, M.B.A.