Just Say No?

ROM Boosters

One way to increase your company's ROM is to seek out and destroy ROM-lowering traits. Simons and Dávila have identified five ROM-destroying business practices which are related to the test questions above.

A "sky's the limit" strategy is one sure sign of a lack of focus and, consequently, low ROM. Similarly, if you're tracking too many performance measures (such as customer satisfaction and market share), that's another sign of trouble. And if people don't know which performance variables they're accountable for, that's yet another enemy of ROM.

Has creating reports become a goal in itself? Beware, says Simons, because another sign of a ROM that's not as high as it should be is the failure to control planning and budgeting. Finally, if employees don't know what your company strategy is, ROM suffers. No matter how well you manage yourself, a failure to communicate goals to others limits your ROM.

ROM also has some reliable allies that help raise it. Clarity about strategic boundaries is one. This means everyone in your company knows what types of opportunities are off-limits. It also helps if key performance variables are widely known and understood, which means there can't be many. And when reports, forecasts and other paperwork are only prepared if they add to the bottom line, that's another ROM ally.

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This article was originally published in the August 1998 print edition of Entrepreneur with the headline: Just Say No?.

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