October 2017

Training and Development: What Is Your ROI?

Staff Training Programs: What Are My Options?

Search for “Training” and you will find  2,220,000,000 results on Google!

Search for “Training ROI”, and you will find 79,6m results on Google.

Is this significant?

The Problem with Training Courses

“Why is performance poor?”

“We need training!”

It’s the most common solution in the book.

Training will fix our sales/ops/finance/SHEQ/teamwork/IT/management/leadership/skills problems. We hope.

But let’s look at the training model for a second. Training companies have a single commercial KPI: bums in seats.

There are predictable variable costs to providing training services: the trainer, venue, food and drink, training materials, IP and licensing costs, sales and marketing, admin and support.

From a pure business perspective, training is a good business opportunity. The costs are predictable, the model is stable and profitability: good.

training and development

So training probably attracts its fair share of entrepreneurs who like to make money. Nothing worse for an entrepreneur than a complicated business.

But when the training company sells off-the-shelf training courses, are they focused on the needs of the trainees or the number of seats they need to fill?

If the company pays a salesman a great commission to sell courses, what is the salesman more focused on? Improving the capability of your people or their own commission?

To make matters worse, what about the recipient of the training? HR gets a request from sales: “We need a training program.” Or the PA gets a note from the boss: “we need a training course.” During a sales meeting, the sales manager complains that “the quality of people HR sends through for interviews is terrible. We need employee training, we need skills development training, we need employee development …”

Okay, detail?

Training programs – One size fits all?

Here’s the second problem. We’re not sure. Sales are off target. Is it bad management, poor marketing, a bad market, poor product, bad prospecting, poor closing, bad service …? Or a combination of some or all of the above?

And should everyone get the same training? Not sure. Probably not.

So when the training salesperson arrives, it’s possible that some companies are sitting ducks for a good spiel, well-presented sales materials, a good looking curriculum/qualified faculty and lots of complimentary references.

So, it’s possible that we simply shortcut the process by rationalising that the course being offered by the training company is probably going to be “good for everyone” anyway? I present the solution to the requesting manager (who’s busy anyway), and if he likes what he sees, we’re on our way.

If the training company is marketing savvy, the venue will be attractive, the food: good, the presenter: funny and the certificate: smart. Naturally, the content must be good too.

What training course do YOU need?

So think about your company: What training could you or your people use right now? If you did a thorough training needs analysis, you might find a number of needs quite specific to your company. They could be related to your products or services, your industry, people, processes or management.

But if you search for employee development, you’re unlikely to find a solution that fits like a shirt in a shop. You’ll be provided with smart brochures, curricula from which to choose, venues, dates and volume pricing options.

But if the company hasn’t done a proper needs analysis and the salesperson is good at selling his or her training services, the chances are that the company will receive a standard off-the-shelf-course which may or not deliver the expected outcomes which themselves may be poorly defined.

What is the solution?

  1. Define the capability requirements per job in your business. See my post on this topic here.
  2. Score your people: how capable are they?
  3. Identify the gaps
  4. Source development options to close the gaps
  5. Implement the development plan
  6. Post-development, score your people
  7. Measure ROI

Find training solutions that specifically address the gap. This means customisation which implies that the training provider (internal/external) needs to pay attention to your needs in some detail, not just sell an off-the-shelf product like the ubiquitous ‘Finance for Non-Financial Managers’ (‘Finance for Non’ fetches 179m results on Google) or Microsoft Excel Training (over 90m results on Google).

The key KPI for training budget holders should be Training ROI.

If that can’t be measured, we’re simply guessing that the training pays.

Don’t get me wrong: I’m not against training or training providers.

I am for Capability Measurement, Gap Analysis and Training ROI. It’s a topic that should be reported on at board level. It’s no longer good enough to report that the budget was X and we spent it. People reported that the training was good. Management is happy. Not good enough. Given the massive investment that companies make to employ, develop, manage and retain people, we need a comprehensive ROI measurement on that spend.

Two good KPIs to start the discussion are:

  1. People: Total Cost of People (incl. the HR and Training Departments) as a % of Revenue over time
  2. Training: Total Cost of Training as a % of Revenue over time.

The trend is the important issue.

Changing topics to finish: My favourite sport is rugby by a village mile. So watching the Kiwis succumb to the Aussies this last weekend was sweet to say the least. The world cup in 2019 is going to be a humdinger. Boks and Aussies on the up, Kiwis overdue for a slump. Just for fun: my prediction: Springboks v Aussies in the final at the world cup! All best until next week.

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Why Your Promotion Policy is Broken

Last week, I started answering Doug’s question about retaining people. I used an example of a person with an excellent track record and good management potential.

The Traditional Promotion Policy

But here’s a fundamental fact: not many people are built to become leaders of people. So the traditional hierarchy (See Figure 1) is redundant as a career planning model. It assumes that the only way forward is up the ladder of worker/supervisor/manager and leader. And that makes sense, where’s the money, status and perks? At the top. But if that’s true, then very very few people are enjoying these benefits because the traditional hierarchy automatically suggests that there are many people at the bottom and very few at the top. We heavily reward leaders, we compensate workers according to the law.

Figure 1 Promotional policy

Figure 1: Traditional Organisational Hierarchy

Now, don’t get me wrong, I’m not suggesting the tired socialist view that leaders are over-paid (some are) and workers underpaid (many are). I don’t see any rational route around the fact that the most talented people who start and/or lead organisations can and should demand excellent remuneration and benefits. They achieve it with a mixture of talent, social, political and leadership skills, hard work, some luck and in some cases, a little guile. We’ve seen that in South Africa a few times, unfortunately.

But is management and leadership talent, the only talent required in an organisation? Can a great restaurant function without excellent waiters? Can retail stores make a great profit long term without good store service and sales staff? Could Disney remain a top tourist attraction if the actors who play the Disney characters didn’t get a kick out of wide-eyed kids and grateful parents? Could your local hospital survive if the surgeons rated their chance of a successful operation at 50%? Could Contiki Tours keep going if their coach drivers frequently had accidents and tourists were injured or worse? Could Elon Musk contemplate trips to the stars and back or massive battery factories if he didn’t employ highly qualified and talented scientists and other specialists? Can a country fight crime without dedicated police officers on the ground?

No.

So, shouldn’t we build a career hierarchy that enables everyone to have a place in the sun?

An Organisational Hierarchy – With a Difference

How about Figure 2?

Figure 2 Organisational Structure

Figure 2: An organisational hierarchy that recognises the multiple talents required for an organisation to succeed.

So, back to Doug’s question. Last week, we talked about management potential. The blue and purple columns in Figure 2.

But if our staff member belongs to the Specialist column, now what?

Easy.

Back to behaviour.

Scientists, technicians, bookkeepers and a million other specialists are specialists because they care or worry about getting things done correctly. They don’t like it when they are blamed for errors as they take the blame personally. So, to avoid blame, they take the time to make sure that their work is done to a high standard, accurately and comprehensively. Which business owner doesn’t want that approach to work in the roles that demand that? Specialists gain their confidence from what they know and are skilled to do. They tend to have less confidence in themselves. They’re often patient and methodical so they don’t find it stressful to find the time it takes to get things right. They do get stressed though when they’re put under unpredictable pressure with unplanned deadlines. Typical of line managers!

So how do you retain specialists?

First of all, take off your leader hat.

Leaders can assume that specialists want what they want: money, power, prestige, status. But those are not the key drivers. Think for a second: if I care about the quality of my work, what will motivate me? A BMW, R10,000, a fancy job title? Unlikely as a primary retention driver. Specialists need to know that their leaders appreciate their contribution. They perceive this when they are complimented in a low key way for good work, given positive, constructive feedback about poor work, sent on training that builds their capabilities, get exposed to conferences, workshops and top talent in their field. In other words, the reward system for a specialist should be centred around building their capability.

Example: “I’m sending you to the XYZ conference in Cape Town (London, New York). I’d like you to focus on this and that and come back to me with your insights. By the way, I know you’re into red wine, book an extra 3 days for yourself to enjoy the wine route while you down there. You’ve delivered great work this year in A, B and C areas. You deserve a well-earned break.”

If I’m the specialist, what do I sense:

1. My boss has bothered to research the conferences in my field (Even if he or she delegated the task to the PA!). He values my work.
2. He’s spending good cash to send me. I’m valued.
3. He complimented me for good work and has added a small time off bonus. I’m recognised.

The worst thing that confident, extroverted, impatient and big picture managers can do is to look down on the work at ground level. Those people make you look good. Value them.

Understand, they are not driven by ego. They care about the quality of their work. They respect structure. They take the time to deliver high-quality work.

So, when managers say “Ok, guys change of plan. We need the work by Monday not Wednesday”, stress rises.

When managers say “You’re so pedantic/sensitive/picky, relax man”, they demotivate specialists.

When managers promote specialists to manager “because we all wanna progress, ja? Obviaas!” We lose a good specialist and gain a bad manager.

Doug, have I partly answered your question? The specifics will differ organisation to organisation, culture to culture, person to person.

Bottom line: The old axiom is wrong: its best to treat people how they would like to be treated, not how we would like to be treated.

Thanks for reading as usual. Look forward to next week’s blog!

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Simple Tools To Identify And Retain Top Talent

Well, I’m happy to eat my words of last week. I thought the All Blacks would see us off again with ease. But, happily, I was wrong. In fact, they were unlucky not to win! What a turnaround! The game taught me that the All Blacks are very uncomfortable defending and playing without the ball. Simple lesson South Africa: hold onto possession and stop the mindless kicking. Victory will follow.

It was also a good weekend for Bafana (finally) as they sorted out Burkina Faso 3-1. But to qualify for the World Cup, they must beat log leaders Senegal … twice apparently! If they believe they can, they probably will. Powerful stuff: belief.

I’m writing this week in response to a good friend and client, Doug Franke.

He wrote last week:

“… It would be helpful in a future article to suggest ways for employers to work with their best staff so that they stay. If bonuses are not the answer, what processes/rewards do work? My staff are fantastic. I want to keep them happy.”

Thanks Doug. Good question. Caveat emptor: I’m not an expert by any standards in retention, remuneration and reward strategy. Having said that, I can comfortably support an argument for the type of retention strategy I would employ for people based on the same criteria we discussed last week.

So let’s choose a real person, fictionalised to protect their identity and make the point.

Tool One To Retain Our Best Staff: The CV Summary

Sipho is in his late twenties. He has achieved a BCom and CA to date. Good job! At school and university, Sipho occupied various leadership roles and was an active sportsman. He also busied himself with voluntary work. Already, I know I’m dealing with a pro-active and busy citizen. He did his articles with a large accounting and consulting house, but decided the consulting gig was not for him. He joined my client in a finance role and his boss would like to keep him satisfied, performing and onboard. Cool so far.

Tool Two: The PPA

retain top talentA simple 10-minute assessment that enables us to understand his preferred work behaviours and the type of work that he’s likely to enjoy. Sipho’s PPA profile indicates that he is an outgoing and persuasive person, reasonably confident, quite quick and impatient, prefers variety and pays an average amount of attention to detail and structure. This may have prompted his move to my client because the intricacies, detail and repetitiveness of audit were probably taxing on this bright but behaviourally sales/people-centred individual.

This personality provides us with a few insights useful to retention: working with people, management, sales (not necessarily product sales but service sales, persuading people, leadership, general management, etc) and working with variety, change and unpredictability. Sipho enjoys the intellectual challenge of detail (see Shadowmatch below for more evidence of this), but he might not appreciate doing it all day, every day. If the job demands that, he’s likely to tire and eventually move. Sadly, he may blame the company and not the work for the move as he rationalises the move and, if he’s not careful, could end up in the same kind of job with a different boss and environment. Not ideal.

Tool Three: Shadowmatch

Shadowmatch helps us to understand the strength of our habits, our task efficiency and attitude. Our habits are the engines that sustain activity. If I have a strong habit of problem-solving, I have a disposition towards solving problems on a conceptual, social and practical level. Ignoring a problem is not regarded as a way of solving it.

Sipho prefers to actively engage problems to resolve them. There are 19 habits in total and Sipho has strong habits of ownership, resilience, responsiveness, discipline, self-confidence and leadership. Shadowmatch also poses 10 conceptual problems to solve. Your speed and accuracy combine to form what they call Task Efficiency. People who score lower on task efficiency are less concerned with solving new problems in their environment and prefer to master what is as against frequently solving new problems to understand what could be. Sipho is both conceptually fit and fast.

Conclusion

Sipho’s CV indicates a pro-active, involved and busy individual. He’s well qualified in his late twenties and plainly looks to grow his career. His PPA indicates that Sipho is a people person with management, sales or leadership potential. His Shadowmatch indicates he likes to get stuck into work that varies and is challenging. He may get bored if the environment doesn’t invite him to solve challenging and new problems.

I want him to stay.

Money. Yes, money is useful as a basic tool but it’s not going to work long term. Talented people need to feel they’re being utilised for challenging, rewarding and meaningful work. They need to see a bigger and exciting future.

Development Tips to Increase Staff Retention

So where to, Sipho? Given his successful CV to date, but lack of business experience, his people-oriented profile with fair speed and detail orientation and his strong habits, it makes sense to expose Sipho to 5 areas of development, among many other options:

  1. Academic: Management development such as a management development programme (MDP) offered by most universities as a good start to a management career
  2. Work exposure to managing a project, team, function or initiative to test his practical on-the-ground management capability and potential
  3. If possible, find a management mentor for Sipho. The mentorship model is powerful but under-utilised in our busy lives where our own lives are undernourished, never mind the lives of our would be protégés.
  4. Reading: Our cellphones enable incredible self-study options from the net to Kindle to Audible, not to mention a million apps and podcasts. Carefully selected and well used, our cellphones turn the daily commute into twice daily self-improvement sessions. Mostly for free. But, to add value, this can’t be a generalised delegation – “listen while driving”. That won’t help. As the manager or HR, you need to become somewhat informed on the available content. For example, on most cell phones, there’s a podcast app. If you click on Search and type in the word ‘manage’, you’ll find a lot of management related topics. Unfortunately, this is a buffet you need to test. You’ll discover problems from boring voice artists, long-winded content, slow pace, scattered topics and ear breaking accents. But amongst the noise, there’ll be excellent options presented by professionals in their areas.
  5. TED Talks: If you search for ‘manage’, you’ll find about 204 talks on management. TED is different to YouTube because while anyone can post a talk on YouTube, very few are invited to talk at TED. To be invited, you have to have something useful to say.

Effectively, the internet has generated a capability for anyone almost anywhere to grow and learn on any subject. It’s almost entirely free which makes many of the old excuses redundant. Sipho can learn and grow as much as he chooses to. With time, experience and hard work, he’ll build a solid management career. He’ll leave his organisation when he hits the opportunity ceiling. That can’t be prevented and in fact, should be encouraged. People remember the people who supported their career growth and the wheel turns.

Next week, we’ll carry on with another example of a person opposite to Sipho but also talented.

By then Doug, I hope to have answered your question!

Thanks for reading as usual. Look forward to next week’s blog!


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