Return on investment

Over the weekend, I watched a film called “Air”. If you’re not familiar with it, it tells the story of how Nike courted the then rookie basketball player Michael Jordan, hoping to secure his endorsement. If you plan on watching it (and somehow don’t know the outcome), spoiler alert for the following.

Nike took the decision to spend its entire $250,000 budget on Jordan. Controversially for 1984, they also gave him a percentage of every Air Jordan shoe sold. It was a huge gamble but it paid off: against an expectation of $3 million, Nike earned $162 million from Air Jordan in the first year and the brand has become a steady source of income since.

Not every investment works out like this. But one thing’s for certain – if you don’t invest then there’s no chance of reaping a return.

I understand that companies don’t have bottomless pockets and that HR departments create salary bandings for a reason. However, it always surprises me when a business won’t be flexible when negotiating with their chosen person for an executive level role, especially when it’s over just a couple of thousand pounds.

What if this person is the Michael Jordan of sales or finance? What if their input, ideas and abilities are the difference that doubles revenue or halves costs? If there’s even a chance of this, the small amount extra the company needs to pay to secure them is insignificant.

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