When we do strategic planning for corporations, we begin with the premise that
the whole purpose of the exercise is to reorganize and reallocate people and re-
sources to increase the rate of return on equity, or capital invested in the busi-
ness. Invariably, this is done by emphasizing some areas and de-emphasizing
others, by allocating more resources to areas with higher potential return and by
taking resources away from those areas that represent lower potential returns.
By developing or promoting newer and better products and services and by dis-
continuing those products and services that are less profitable, the company and
all the people in it can channel their resources to maximize their returns.
In doing personal strategic planning, the first thing you want to think about is
increasing your personal “return on energy,” rather than return on equity. You
need to realize that the most essential and valuable thing that you have to bring
to your life and to your work is your ability to think, to act, and to get
results. Your earning ability—which is a function of your education, knowledge,
experi-ence and talents—is your human capital, or your equity. And the way
you use it will largely determine the quality and quantity of your rewards, both
material and psychological, both tangible and intangible.