Praise for Value for Money |
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v | |
Foreword |
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xxv | |
Preface |
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xxvii | |
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xxvii | |
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xxviii | |
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The ROI Methodology: The Enhanced Logic Model |
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xxix | |
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We Can't Measure Our Way to Success |
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xxx | |
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xxxi | |
Acknowledgements |
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xxxv | |
Authors |
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xxxviii | |
1 The Value Evolution |
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1 | (20) |
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4 | (4) |
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5 | (1) |
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The Importance of Monetary Values |
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6 | (1) |
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6 | (1) |
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The New Definition of Value |
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7 | (1) |
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8 | (8) |
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8 | (1) |
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9 | (1) |
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Project and Program Costs |
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9 | (1) |
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Donors are More Demanding |
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10 | (1) |
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Measurement at the Impact Level Is No Longer Optional |
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11 | (1) |
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12 | (1) |
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Managers' New Business Focus |
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12 | (1) |
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12 | (1) |
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13 | (1) |
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The Growth of Project Management |
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14 | (1) |
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Evidence-Based or Fact-Based Management |
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14 | (1) |
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15 | (1) |
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15 | (1) |
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The Executive Appetite for Monetary Value |
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16 | (1) |
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16 | (3) |
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17 | (1) |
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17 | (1) |
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17 | (1) |
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18 | (1) |
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18 | (1) |
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19 | (1) |
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19 | (2) |
2 Six Ways to Show Value for Money |
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21 | (18) |
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Six Ways to Show Value for Money |
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25 | (7) |
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27 | (1) |
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2 Focus on Impacts and Intangibles |
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28 | (1) |
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29 | (1) |
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4 The Payoff of Improved Behaviors |
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29 | (1) |
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5 Cost-Effective Approach |
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30 | (1) |
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6 Cost of Not Implementing the Program |
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31 | (1) |
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32 | (6) |
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Barriers to Showing Value for Money |
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32 | (1) |
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32 | (1) |
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Because there are No Profits, ROI is Not Possible |
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33 | (1) |
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ROI is Just Not Appropriate for the Public Sector |
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34 | (1) |
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We Don't Have the Resources |
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35 | (1) |
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36 | (1) |
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No One is Asking for this |
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37 | (1) |
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38 | (1) |
3 Needed: An Enhanced Logic Model |
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39 | (30) |
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42 | (5) |
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42 | (2) |
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44 | (1) |
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45 | (2) |
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Concerns about Current Models |
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47 | (13) |
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Lack of Focus on Benefit-Cost Analysis |
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47 | (2) |
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Lack of Emphasis on Attribution |
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49 | (1) |
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Confusion on Outcomes and Impact |
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49 | (1) |
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Little Focus on the Chain of Value of a Particular Program or Project |
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50 | (1) |
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Unclear Timing of Data Collection |
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51 | (1) |
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Needs Assessments versus Activities |
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52 | (1) |
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52 | (2) |
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Inability to "Show the Money" |
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54 | (2) |
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Not CEO- and CFO-Friendly |
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56 | (1) |
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Managing Resources for Evaluation |
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57 | (1) |
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Lack of Focus on Process Improvement |
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58 | (1) |
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The Inability to Influence Investment |
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59 | (1) |
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How Does Your Current Model Stack Up? |
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60 | (4) |
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61 | (1) |
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61 | (1) |
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61 | (1) |
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62 | (1) |
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62 | (1) |
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63 | (1) |
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63 | (1) |
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63 | (1) |
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63 | (1) |
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64 | (1) |
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Requirements for the Value for Money: A Measurement Process |
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64 | (1) |
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65 | (1) |
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Terminology: Projects, Solutions, Participants |
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66 | (1) |
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67 | (2) |
4 Introducing the ROI Methodology |
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69 | (24) |
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70 | (5) |
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70 | (2) |
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Reaction and Planned Action |
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72 | (1) |
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73 | (1) |
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Application and Implementation |
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73 | (1) |
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74 | (1) |
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74 | (1) |
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75 | (2) |
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Using Design Thinking to Deliver and Measure Results |
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77 | (1) |
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78 | (9) |
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78 | (4) |
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1 Start with Why: Align Programs with the Business |
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78 | (3) |
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2 Make it Feasible: Select the Right Solution |
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81 | (1) |
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3 Expect Success: Design for Results |
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81 | (1) |
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82 | (1) |
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4 Make it Matter: Design for Input, Reaction, and Learning |
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82 | (1) |
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5 Make it Stick: Design for Application and Impact |
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83 | (1) |
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83 | (3) |
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6 Make it Credible: Isolate the Effects of the Program |
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83 | (1) |
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7 Make it Credible: Convert Data to Monetary Value |
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84 | (1) |
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8 Make it Credible: Identify Intangible Benefits |
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84 | (1) |
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9 Make it Credible: Capture Costs of Projects |
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85 | (1) |
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10 Make it Credible: Calculate the Return on Investment |
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85 | (1) |
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86 | (2) |
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11 Tell the Story: Communicate Results to Key Stakeholders |
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86 | (1) |
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12 Optimize the Results: Use Black Box Thinking to Increase Funding |
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86 | (1) |
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Operating Standards and Philosophy |
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87 | (1) |
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Implementing and Sustaining the Process |
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87 | (1) |
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Benefits of this Approach |
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88 | (3) |
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89 | (1) |
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Validating the Value Proposition |
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89 | (1) |
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89 | (1) |
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Enhancing the Image and Building Respect |
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90 | (1) |
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90 | (1) |
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Justifying or Enhancing Budgets |
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90 | (1) |
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Building Productive Partnerships |
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91 | (1) |
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91 | (2) |
5 Start with Why: Align Programs with the Business |
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93 | (26) |
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Impact Measures are Critical |
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96 | (1) |
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97 | (1) |
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Begin with the End in Mind |
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97 | (1) |
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97 | (1) |
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98 | (1) |
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Avoid Paralysis by Analysis |
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98 | (1) |
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98 | (1) |
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99 | (10) |
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102 | (1) |
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Obvious versus Not-So-Obvious Payoffs |
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102 | (2) |
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104 | (1) |
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105 | (2) |
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107 | (1) |
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107 | (1) |
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To Forecast or Not to Forecast |
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108 | (1) |
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108 | (1) |
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109 | (9) |
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Determining the Opportunity |
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109 | (1) |
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Identifying the Business Measure-Hard Data |
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110 | (2) |
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110 | (1) |
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110 | (1) |
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110 | (2) |
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112 | (1) |
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112 | (1) |
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Defining the Business Need-Soft Data |
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113 | (2) |
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114 | (1) |
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Work Climate/Satisfaction |
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114 | (1) |
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114 | (1) |
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Employee Development/Advancement |
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114 | (1) |
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114 | (1) |
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115 | (1) |
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Using Tangible versus Intangible-A Better Approach |
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115 | (1) |
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Finding Sources of Impact Data |
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115 | (1) |
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Identifying All the Measures |
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116 | (1) |
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What Happens if You do Nothing? |
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117 | (1) |
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117 | (1) |
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118 | (1) |
6 Make It Feasible: Select the Right Solution |
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119 | (22) |
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122 | (1) |
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122 | (3) |
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Examine the Data and Records |
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123 | (1) |
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123 | (1) |
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123 | (1) |
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Use Benchmarking from Similar Solutions |
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124 | (1) |
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Use Evaluation as the Hook |
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124 | (1) |
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125 | (1) |
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Discuss Disasters in Other Places |
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125 | (1) |
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125 | (6) |
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126 | (1) |
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127 | (4) |
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131 | (3) |
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Subject-Matter Experts (SMEs) |
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131 | (1) |
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131 | (1) |
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132 | (1) |
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132 | (1) |
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132 | (1) |
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133 | (1) |
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133 | (1) |
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134 | (1) |
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134 | (1) |
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135 | (1) |
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Matching Solutions to Needs |
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135 | (1) |
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Some Solutions are Obvious |
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135 | (1) |
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Solutions Can Come in Different Sizes |
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136 | (1) |
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Some Solutions Take a Long Time |
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136 | (1) |
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Solutions Should be Tackled with the Highest Priority Items First |
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136 | (1) |
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136 | (2) |
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Selecting Solutions for Maximum Payoff |
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138 | (2) |
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Short-Term versus Long-Term Costs |
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138 | (1) |
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138 | (1) |
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Time Needed for Implementation |
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138 | (1) |
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139 | (1) |
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139 | (1) |
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Tackling Multiple Solutions |
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140 | (1) |
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140 | (1) |
7 Expect Success: Design for Results |
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141 | (32) |
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The Power of Expectations |
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144 | (3) |
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144 | (2) |
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146 | (1) |
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Defining the Success of Programs |
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147 | (2) |
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Designing for Results at Each Level |
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149 | (3) |
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149 | (1) |
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150 | (1) |
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150 | (1) |
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150 | (1) |
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150 | (1) |
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151 | (1) |
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151 | (1) |
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151 | (1) |
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Developing Objectives at Multiple Levels |
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152 | (8) |
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152 | (1) |
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153 | (1) |
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154 | (1) |
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155 | (2) |
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157 | (1) |
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Return on Investment (ROI) Objectives |
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158 | (1) |
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158 | (2) |
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160 | (2) |
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Application/Impact Objectives Drive Programs |
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160 | (1) |
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Application/Impact Objectives Enhance Design and Development |
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160 | (1) |
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Application/Impact Objectives Improve Facilitation |
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160 | (1) |
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Application/Impact Objectives Help Participants Understand What Is Expected |
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161 | (1) |
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Impact Objectives Excite Sponsors and Donors |
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161 | (1) |
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Application/Impact Objectives Simplify Evaluation |
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161 | (1) |
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All Levels of Objectives Inform the Stakeholders |
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162 | (1) |
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Defining Roles and Responsibilities |
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162 | (4) |
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163 | (1) |
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163 | (1) |
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163 | (1) |
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164 | (1) |
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164 | (1) |
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164 | (1) |
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165 | (1) |
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Managers of Participants/Significant Others |
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165 | (1) |
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165 | (1) |
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165 | (1) |
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166 | (6) |
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166 | (1) |
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Feasibility of Outcome Evaluations |
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167 | (1) |
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167 | (1) |
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167 | (4) |
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171 | (1) |
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172 | (1) |
8 Make It Matter: Design for Input, Reaction, and Learning |
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173 | (28) |
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Communicating with Results in Mind |
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174 | (3) |
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175 | (1) |
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175 | (1) |
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175 | (1) |
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176 | (1) |
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Workbooks and Participant Guides |
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176 | (1) |
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Changing the Role of Participants |
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177 | (1) |
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177 | (1) |
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177 | (1) |
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178 | (1) |
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178 | (3) |
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Identifying Impact Measures Before Participating in the Program |
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179 | (1) |
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179 | (2) |
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Involving Managers or Significant Others |
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181 | (1) |
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181 | (2) |
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182 | (1) |
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182 | (1) |
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183 | (1) |
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183 | (4) |
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183 | (1) |
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184 | (1) |
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184 | (1) |
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185 | (1) |
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185 | (1) |
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186 | (1) |
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186 | (1) |
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187 | (1) |
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Design Reaction for Results |
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187 | (6) |
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188 | (1) |
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189 | (2) |
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191 | (1) |
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192 | (1) |
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192 | (1) |
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Forecasting ROI at this Level |
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192 | (1) |
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Design Learning for Results |
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193 | (1) |
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194 | (1) |
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194 | (1) |
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194 | (1) |
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Data Collection for Input, Reaction, and Learning |
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194 | (3) |
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Questionnaires and Surveys |
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194 | (2) |
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196 | (1) |
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Measuring with Simulation |
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196 | (1) |
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Timing of Data Collection |
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197 | (2) |
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198 | (1) |
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198 | (1) |
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Collecting at Periodic Intervals |
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198 | (1) |
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For Long Programs with Multiple Parts |
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199 | (1) |
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199 | (2) |
9 Make It Stick: Design for Application and Impact |
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201 | (36) |
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Data Collection for Application and Impact |
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204 | (15) |
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Questionnaires and Surveys |
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204 | (1) |
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Improving the Response Rate for Questionnaires and Surveys |
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204 | (5) |
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209 | (1) |
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210 | (1) |
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210 | (1) |
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211 | (6) |
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212 | (1) |
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Define the Unit of Measure |
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212 | (2) |
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Place a Monetary Value on Each Improvement |
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214 | (1) |
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Implement the Action Plan |
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214 | (1) |
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Isolate the Effects of the Program |
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214 | (1) |
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Provide a Confidence Level for Estimates |
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215 | (1) |
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215 | (1) |
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Summarize the Data and Calculate the ROI |
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215 | (2) |
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217 | (2) |
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Monitoring Business Performance Data |
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219 | (3) |
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219 | (1) |
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220 | (1) |
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221 | (1) |
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Selecting the Appropriate Method for Each Level |
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222 | (2) |
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222 | (1) |
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Participants' Time for Data Input |
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222 | (1) |
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Manager (or Significant Other) Time for Data Input |
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223 | (1) |
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223 | (1) |
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Disruption of Normal Work Activities |
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223 | (1) |
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223 | (1) |
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Utility of an Additional Method |
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224 | (1) |
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Cultural Bias for Data Collection Method |
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224 | (1) |
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Timing of Data Collection |
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224 | (2) |
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Collecting Application Data |
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224 | (1) |
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225 | (1) |
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Built-In Application Tools |
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226 | (4) |
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Improvement Plans and Guides |
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227 | (1) |
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Application Tools/Templates |
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227 | (1) |
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227 | (1) |
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228 | (2) |
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Involving the Participants' Manager or Significant Other |
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230 | (5) |
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The Most Influential Group |
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230 | (1) |
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231 | (1) |
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During the Program Activities |
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232 | (1) |
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232 | (1) |
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232 | (1) |
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233 | (2) |
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235 | (2) |
10 Make It Credible: Isolate the Effects of the Program |
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237 | (28) |
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The Importance of Pinpointing the Contribution |
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240 | (2) |
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240 | (1) |
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240 | (2) |
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242 | (2) |
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242 | (1) |
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243 | (1) |
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Quantitative and Research Isolation Methods |
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244 | (11) |
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244 | (2) |
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246 | (3) |
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249 | (3) |
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252 | (1) |
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Calculating the Impact of Other Factors |
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253 | (1) |
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Qualitative Isolation Methods |
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254 | (1) |
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Participants' Estimate of Impact |
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255 | (8) |
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Steps to Measure Attribution Using Estimates |
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258 | (1) |
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Manager's Estimate of Impact |
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259 | (1) |
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Customer Estimates of Program Impact |
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260 | (1) |
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Internal or External Expert Estimates |
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260 | (1) |
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Estimate Credibility: The Wisdom of Crowds |
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261 | (1) |
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261 | (2) |
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263 | (1) |
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264 | (1) |
11 Make It Credible: Convert Data to Monetary Value |
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265 | (32) |
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The Importance of Monetary Value |
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267 | (3) |
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267 | (1) |
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Money Makes Impact More Impressive |
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268 | (1) |
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Converting to Monetary Values is Similar to Budgeting |
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268 | (1) |
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Monetary Value is Vital to Organizational Operations |
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269 | (1) |
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Monetary Values Are Necessary to Understand Problems and Cost Data |
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269 | (1) |
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Key Steps in Converting Data to Money |
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270 | (2) |
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272 | (9) |
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Converting Output Data to Money |
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273 | (1) |
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274 | (2) |
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Calculating the Cost of Inadequate Quality |
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276 | (2) |
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278 | (1) |
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Converting Employee Time Savings Using Compensation |
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279 | (1) |
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280 | (1) |
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281 | (1) |
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When Standard Values are Not Available |
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281 | (9) |
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Using Historical Costs from Records |
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282 | (2) |
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282 | (1) |
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282 | (1) |
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282 | (1) |
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283 | (1) |
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284 | (1) |
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Using Values from External Databases |
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285 | (1) |
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Linking with Other Measures |
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286 | (2) |
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Using Estimates from Participants |
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288 | (1) |
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Using Estimates from the Management Team |
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289 | (1) |
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Using Program Staff Estimates |
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289 | (1) |
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290 | (5) |
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Choose a Technique Appropriate for the Type of Data |
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290 | (1) |
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Move from Most Accurate to Least Accurate |
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290 | (1) |
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Consider Source Availability |
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291 | (1) |
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Use the Source with the Broadest Perspective on the Issue |
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291 | (1) |
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Use Multiple Techniques When Feasible |
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291 | (1) |
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Apply the Credibility Test |
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292 | (1) |
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Consider the Short-Term/Long-Term Issue |
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292 | (2) |
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Consider an Adjustment for the Time Value of Money |
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294 | (1) |
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295 | (2) |
12 Make It Credible: Identify the Intangibles |
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297 | (18) |
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Why Intangibles are Important |
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|
299 | (5) |
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Intangibles are the Invisible Advantage |
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|
300 | (1) |
|
We are in the Intangible Economy |
|
|
301 | (1) |
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More Intangibles are Converted to Tangibles |
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|
302 | (1) |
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|
302 | (1) |
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Intangibles Drive Programs and Investments |
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|
303 | (1) |
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Measuring and Analyzing Intangibles |
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|
304 | (8) |
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Measuring the Intangibles |
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|
304 | (3) |
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|
307 | (1) |
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|
307 | (3) |
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|
310 | (1) |
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Identifying and Collecting Intangibles |
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|
311 | (1) |
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|
312 | (1) |
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|
313 | (2) |
13 Make It Credible: Capture Costs of the Program and Calculate ROI |
|
315 | (30) |
|
The Importance of Costs and ROI |
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|
319 | (1) |
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|
320 | (5) |
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|
320 | (1) |
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|
321 | (1) |
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Costs Reported without Benefits |
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|
322 | (1) |
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Develop and Use Cost Guidelines |
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|
323 | (1) |
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|
323 | (1) |
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Prorated versus Direct Costs |
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|
324 | (1) |
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|
325 | (1) |
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Specific Costs to Include |
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|
325 | (3) |
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Initial Analysis arid Assessment |
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|
326 | (1) |
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Development of Program Solutions |
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|
326 | (1) |
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|
326 | (1) |
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|
326 | (1) |
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|
327 | (1) |
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Maintenance and Monitoring |
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|
327 | (1) |
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|
328 | (1) |
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|
328 | (1) |
|
Cost Tabulation in Action |
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|
328 | (5) |
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|
328 | (1) |
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|
329 | (1) |
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|
330 | (1) |
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|
331 | (1) |
|
The Drivers of Evaluation |
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|
331 | (1) |
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|
332 | (1) |
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|
333 | (9) |
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|
334 | (1) |
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|
335 | (1) |
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|
336 | (1) |
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|
337 | (1) |
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|
338 | (1) |
|
Social Return on Investment |
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|
339 | (1) |
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|
340 | (1) |
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|
340 | (2) |
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|
342 | (1) |
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Payback Period (Breakeven Analysis) |
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|
342 | (1) |
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|
342 | (1) |
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|
343 | (1) |
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|
343 | (2) |
14 Tell the Story: Communicate Results to Key Stakeholders |
|
345 | (36) |
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|
346 | (6) |
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|
347 | (1) |
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|
348 | (1) |
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|
348 | (2) |
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|
350 | (1) |
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|
351 | (1) |
|
Conclusion and Recommendations |
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|
351 | (1) |
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|
352 | (1) |
|
The Importance of Communicating Results |
|
|
352 | (3) |
|
Communication is Necessary to Make Improvements |
|
|
352 | (1) |
|
Communication is Necessary to Explain the Contribution |
|
|
353 | (1) |
|
Communication is a Politically Sensitive Issue |
|
|
353 | (1) |
|
Different Audiences Need Different Information |
|
|
353 | (1) |
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|
354 | (1) |
|
Principles of Communicating Results |
|
|
355 | (2) |
|
Communication Must be Timely |
|
|
355 | (1) |
|
Communications Should be Targeted to Specific Audiences |
|
|
355 | (1) |
|
Media Should be Carefully Selected |
|
|
356 | (1) |
|
Communication Should be Unbiased and Modest in Tone |
|
|
356 | (1) |
|
Communication Must Be Consistent |
|
|
356 | (1) |
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|
356 | (1) |
|
Testimonials Must Come from Respected Individuals |
|
|
357 | (1) |
|
The Audience's Bias of the Program Will Influence the Communication Strategy |
|
|
357 | (1) |
|
The Process for Communicating Results |
|
|
357 | (2) |
|
Step 1: Analyze Reason for Communication |
|
|
359 | (1) |
|
Step 2: Plan for Communication |
|
|
359 | (1) |
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|
360 | (3) |
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|
363 | (1) |
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|
363 | (7) |
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|
363 | (3) |
|
Interim and Progress Reports |
|
|
366 | (1) |
|
Routine Communication Tools |
|
|
366 | (1) |
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|
367 | (2) |
|
Email and Electronic Media |
|
|
369 | (1) |
|
Program Brochures and Pamphlets |
|
|
369 | (1) |
|
|
370 | (1) |
|
Step 6: Present Information |
|
|
370 | (8) |
|
Routine Feedback on Program Progress |
|
|
371 | (2) |
|
|
373 | (1) |
|
Presentation of Results to Senior Management |
|
|
374 | (2) |
|
|
376 | (2) |
|
|
378 | (1) |
|
|
379 | (2) |
15 Optimize Results: Use Black Box Thinking to Increase Funding |
|
381 | (20) |
|
Process Improvement is the Key: Black Box Thinking |
|
|
383 | (4) |
|
|
384 | (1) |
|
|
384 | (2) |
|
|
386 | (1) |
|
Making Adjustments in Programs |
|
|
387 | (3) |
|
|
387 | (1) |
|
You Can Always Make it Better |
|
|
388 | (1) |
|
When Do You Discontinue the Program? |
|
|
388 | (2) |
|
|
390 | (3) |
|
|
390 | (1) |
|
Level 1, Reaction Measures |
|
|
390 | (1) |
|
Level 2, Learning Measures |
|
|
391 | (1) |
|
Level 3, Application Measures |
|
|
391 | (1) |
|
|
392 | (1) |
|
|
392 | (1) |
|
|
393 | (3) |
|
|
393 | (2) |
|
Addressing the Monetary Benefits |
|
|
395 | (1) |
|
|
395 | (1) |
|
|
396 | (4) |
|
|
396 | (2) |
|
|
398 | (1) |
|
Anxiety and Downturns Translate into Cost Reduction |
|
|
399 | (1) |
|
|
400 | (1) |
16 Forecast the ROI |
|
401 | (30) |
|
The Importance of Forecasting ROI |
|
|
407 | (4) |
|
|
407 | (1) |
|
High Risks and Uncertainty |
|
|
407 | (1) |
|
|
408 | (1) |
|
|
409 | (1) |
|
|
410 | (1) |
|
The Trade-Offs of Forecasting |
|
|
411 | (2) |
|
Pre-Program ROI Forecasting |
|
|
413 | (9) |
|
|
413 | (1) |
|
Basic Steps to Forecast ROI |
|
|
414 | (3) |
|
|
417 | (1) |
|
|
418 | (1) |
|
|
419 | (1) |
|
|
419 | (1) |
|
|
420 | (2) |
|
Forecasting with a Pilot Program |
|
|
422 | (1) |
|
ROI Forecasting with Reaction Data |
|
|
423 | (4) |
|
|
424 | (2) |
|
|
426 | (1) |
|
|
427 | (2) |
|
|
429 | (2) |
17 Make It Work: Sustaining the Change to a Results-Based Process |
|
431 | (16) |
|
|
433 | (1) |
|
|
434 | (1) |
|
Develop Roles and Responsibilities |
|
|
434 | (2) |
|
|
434 | (1) |
|
|
435 | (1) |
|
Establishing a Task Force |
|
|
435 | (1) |
|
Assigning Responsibilities |
|
|
436 | (1) |
|
Establish Goals and Plans |
|
|
436 | (2) |
|
Setting Evaluation Targets |
|
|
437 | (1) |
|
Developing a Plan for Implementation |
|
|
438 | (1) |
|
Revise Guidelines and Procedures |
|
|
438 | (2) |
|
|
440 | (1) |
|
|
440 | (1) |
|
|
440 | (1) |
|
|
441 | (1) |
|
Prepare the Management Team |
|
|
442 | (1) |
|
|
443 | (2) |
|
|
443 | (1) |
|
|
444 | (1) |
|
|
444 | (1) |
|
|
445 | (1) |
|
|
446 | (1) |
References |
|
447 | (12) |
Appendix A |
|
459 | (8) |
Appendix B |
|
467 | (4) |
Appendix C |
|
471 | (2) |
Index |
|
473 | |