The ROI on ROI

Post by
Scott Francis

Thanks to a colleague at BP3 for bringing this to my attention - an article from Quartz on the DuPont invention that changed business forever.?

Of all the inventions US chemical giant DuPont has given the world?Lycra, Teflon, Kevlar, Freon, Lucite, Nylon, and so on?perhaps none has been more influential than the one it developed that is now at the core of nearly every major company on the planet: Return on investment.

Let that sink in for a moment.? Maybe another moment.?

And why did it spread beyond DuPont?

When DuPont bought a huge stake in General Motors in the 1920s, Brown?and his return-on-investment analysis?made the jump to GM as its CFO, where his techniques became enmeshed with American management pioneer, Alfred Sloan, who was then the automaker?s chief executive. By the 1950s, their techniques and methods spread to GM rival Ford, when the Ford family began to cede control of the then-struggling company to a contingent of professional managers known as the ?Whiz Kids.?

Can you just imagine for a moment, the ROI of inventing ROI?? It has to be staggering.? From 1912 to today, ROI has been a critical tool for managing business.? And it certainly has been at the heart of BPM initiatives for more than a decade, and tech investments for decades longer than that.? Although many people pair ROI with short-term focused myopia of current public companies, the article points out that DuPont has just paid its 445th consecutive quarterly dividend, going all the way back to 1904.? It appears that they have kept the long arc of history firmly in mind.


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