Presentation made at recent CHART conference by John Kidwell and Curt Archambault. John presented via Second Life as an avatar named Roi Reanimator. Groundbreaking for CHART.

1. ROI Demystified “A proven approach in good times and bad” Curt Archambault – Jack in the Box/Roi – Cyber Space Cleveland, Ohio/July 2009

2. Managing What Counts Financial“Has our financial performance improved?” What areour financialgoals? Customer“Do customers recognize that we are delivering more value?” What customers do wewant to serve and howare we going to win andretain them? VisionandStrategy Internal Business Processes“Have we improved key business processes so that we can delivermore value to customers?” What internalbusiness processesare critical to providingvalue to customers? Learning and Growth“Are we maintaining our ability to change and improve?”

4. ROI Demystified “A proven approach in good times and bad” The question is asked today more than ever before. It is also one of the most difficult to answer. One reason for the difficulty is a definition problem. A common financial definition is: “ROI is a measure of the net income a company is able to earn with its total assets”. An acceptable definition for a company as a whole; but, hardly realistic for a single project or product. Others prefer a more micro-definition: “ROI is the gain from an action divided by the cost of that action”. Works well if both gain and cost are easily known and clearly result from the action. When someone asks about ROI, they are really asking: “What do I get back ('return') for the money I'm being asked to spend ('investment')?”

5. ROI Demystified “A proven approach in good times and bad” To understand the business value of investments: “If it's important enough to spend money and time on, it's important enough to figure out if you're getting the end result you were hoping for”. * To make resource allocation decisions and manage a budget: “You can’t manage what you can’t measure”. ** * Erica Iacono, PRWeek, 14/03/05 ** Hewlett-Packard

6. THE TOP FIVELIST ROI Demystified “A proven approach in good times and bad”

7. 1 "The Bottom Line - PROFIT!“ 2 Shows tangible outcomes, not "touchy-feely" motivations 3 Gets Senior Executives to "buy in" to Training initiatives 4 Speaks in a language the CFO understands 5 It serves as a prime tool to support the needs analysis process The Top 5 Reasons ROI is“A proven approach in good times and bad”

10. Activity vs. vs. Proactive Results Reactive ROI Demystified “A proven approach in good times and bad”

11. ROI Demystified “A proven approach in good times and bad”

12. WONDER WHAT IT WILL BE LIKE TO ORDER A PIZZA IN THE FUTURE?... THE FUTURE…

13. Coming to you live from the mystical, magical, real-time, virtual world of SecondLife… THE FUTURE… IS NOW!

14. ROI Demystified “A proven approach in good times and bad” Benefits - Costs ROI (%) = x 100% Costs Benefits BCR = Costs Let’s start simple. What is…

15. Level 1 DO SESSION SURVEYS Kirkpatrick-Phillips Model Level 2 TEST FOR LEARNING Level 3 APPLY THE LEARNING Level 4 BUSINESS IMPACT Level 5 RETURN ON INVESTMENT Jack Phillips Donald Kirkpatrick ROI Demystified “A proven approach in good times and bad”

16. ROI Demystified “A proven approach in good times and bad” The “MUST” ListFor An Effective ROI Process... 1) Be Simple 2) Be Economical 3) Be Credible 4) Be Theoretically Sound 5) Be Flexible: Analysis, Data, Programs 6) Account For Other Factors 7) Include Cost Of Program 8) Have A Successful Track Record

17. ROI Demystified “A proven approach in good times and bad” Reversing the Model… Level 4 OPERATIONAL NEEDS Level 3 JOB PERFORMANCE NEEDS Level 2 SKILL/KNOWLEDGE GAPS Level 1 TRAINING PROGRAM PREFERENCE …gives you an ASSESSMENT PROCESS

18. OperationalNeeds INITIATIVE INTERVENTION Job PerformanceNeeds Non-TrainingSolution Skill/KnowledgeGaps AnticipatedProblem/Opportunity ExistingProblem/Opportunity Non-TrainingSolution 4 Training Program Preferences 3 Estimate ProgramCosts 2 1 Design & Implement Assessment Process

19. ROI Demystified “A proven approach in good times and bad” What is the Business Impact $ALE$ Don’t rely exclusively on sales…Everyone wants a slice of that pie!

20. ROI Demystified “A proven approach in good times and bad” “HARD DATA” Productivity Time Costs CASE STUDY * CASE STUDY * CASE STUDY * CASE STUDY *

21. ROI Demystified “A proven approach in good times and bad” Data Collection Methods Performance Impact CASE STUDY * CASE STUDY * CASE STUDY * CASE STUDY *

23. Observation

24. Interviews

25. Focus Groups

26. Historical Data ()  ()  Pre-program Post-program CASE STUDY * CASE STUDY * CASE STUDY * CASE STUDY *

27. ROI Demystified “A proven approach in good times and bad” TRAINING SOLUTION Estimate ProgramCosts Cost Categories Analysis Development Implementation Evaluation Cost Accounts CASE STUDY * CASE STUDY * CASE STUDY * CASE STUDY *

28. PROGRAM COST WORKSHEET

29. 40,000 1.3 … includes vacation = 365 - 104 234 222 … Lodging & Meals 105 5 1635 238 … Avg. of Mileage & Airfare = .005 FC & Labor increases 90 15 29,445 6938 = Activities & Outside Speaker 36,383 PARTICIPANTS’ COSTS WORKSHEET ÷

30. EvaluationTools EvaluationTiming Collect ROI Data IdentifyTangible Results IdentifyIntangible Results Isolate Effectsof Program Measuring ROI Convert Data to Monetary Value CalculateROI Communicate Results

32. Observation

33. Interviews

34. Focus Groups

35. Historical Data ()  ()  Pre-program Post-programAnalysis Evaluation

39. Food Costs

40. Historical cost data

41. Internal/external expert estimates

42. External databases

43. Linking to other measures

45. Determine a value for each unit Sometimes Easy… …Sometimes hard FOOD COSTS * LABOR COSTS GUEST SATISFACTION TURNOVER

46. CUSTOMER SERVICE INDEXSurvey 1% “will return” = $ales x .05607 Value = $1052640 x .05607 = $59021 TURNOVER* Historical Data Comparison ** Linking to Expert Estimates * Avg. # of Empl. x $1150/12 Value = 400 x $96 = $38400

48. Determine a value for each unit

49. Calculate the change in performance data

50. Determine an amount for the change - Annual - Quarterly - Monthly

51. Calculate the total valueSELECT THE APPROPRIATE DATA

53. ______________________________

55. ______________________________

57. ______________________________

59. ______________________________

60. ______________________________Soft>>

61. ROI Demystified “A proven approach in good times and bad” Converting Data to $$$ EVALUATION OF RETURN Measure: ________________________ Unit of Measure:__________ Value or cost of unit of measure: $_____________ How much change occurred in unit of measure? X _____________ (Average per quarter/month) Period of evaluation (quarters/months) X _____________ POTENTIAL IMPACT= $_____________ CONFIDENCE FACTOR Percent of change caused by program: _______% X ____________ Confidence in information: _______% X _____________ (100% = Certainty<<>>0% = No Confidence) ESTIMATED RETURN = $____________

62. ROI Demystified “A proven approach in good times and bad” Converting Data to $$$ LABOR FOOD COST TURNOVER Voice of Guest $__________ X __________ X __________ =$__________ X __________ X __________ $__________ $__________ X __________ X __________ =$__________ X __________ X __________ $__________ $__________ X __________ X __________ =$__________ X __________ X __________ $__________ $__________ X __________ X __________ =$__________ X __________ X __________ $__________ Unit Value: Degree of Change (Average per qtr/mo) Timeframe POTENTIAL IMPACT CONFIDENCE FACTOR % Impact % Confidence TOTALS

63. ROI Demystified “A proven approach in good times and bad” LABOR FOOD COST TURNOVER CSI“RETURN” $___1052640 X ___.006275 X ________3_ =$_____19816 X _______050 X _______050 $ 4954 $___1052640 X ___.002833 X _______3__ =$______8946 X _______050 X _______100 $ 4473 $_____38400 X _______.03 X _______3__ =$______3456 X _______030 X _______100 $ 1036 $_____59021 X ______.666 X _______3__ =$____118041 X ________60 X ________30 $ 21247 Converting Data to $$$ Unit Value: Degree of Change (Average per qtr/mo) Timeframe POTENTIAL IMPACT CONFIDENCE FACTOR % Impact % Confidence TOTALS TOTAL BENEFIT = $31710

64. ROI Demystified “A proven approach in good times and bad” Benefits - Costs ROI (%) = x 100% Costs $31,710 - $10,000 ROI (%) = x 100% $10,000 Benefits BCR = Costs $31,710 BCR = $10,000 Calculating the Return

65. ROI Demystified “A proven approach in good times and bad” Calculating the Return ROI (%) = 217% BCR = 3.17

66. ROI Demystified “A proven approach in good times and bad” “SOFT DATA” “HARD DATA” IDENTIFY INTANGIBLE BENEFITS Productivity Time Costs

68. Improved Teamwork

69. Reduced Complaints

70. Reduced Conflicts

71. Improved Communications

72. Improved Customer Service

75. The ROI analysis should always include one or more strategies for isolating the effects of training

78. The ROI analysis should always include one or more strategies for isolating the effects of training

79. When using estimates, use the most reliable and credible sources

81. Involve management in developing the returns

82. Approach sensitive and controversial issues with caution

85. Do not try to use ROI on every program

87. jkidwell@mazzios.com 918-641-1227 curt.archambault@jackinthebox.com 425-687-4952