One of the best investments you can make in your business is the investment in employee education and development.
This should start at the top with making sure you as the CEO/ business owner never stop learning.
Here’s why: In the 1960’s, Robert F. Stewart at SRI in Menlo Park, Ca. lead a research team on a major study to discover what was going wrong with management change. Over the 10 year period they interviewed 1100 companies and organizations and a 250-item questionnaire was completed by over 5000 executives.
One of their key findings was that there are three factors which separate excellence from mediocrity:
Continued education of the senior executive
Overt attention to purchasing
Short term written down departmental plans for improvement
Said another way, continual education of the CEO/business owner is highly correlated to their business’ success. So it’s important for you to make the time and find the money to continue to develop yourself. By improving your leadership skills, you will be able to get more out of your team and also motivate them to work on getting better themselves. If you can motivate a few of your good performer to become star performer you will get an unbelievable benefit. Studies made at AT&T Laboratories showed that star performer were four to eight times more productive than good performers.
Improving your business skills can have equally rewarding results. Really understanding your financial numbers and reports would give you more options. Negotiating better can give you immediate return in your business and your personal life. Knowing how to establish and build relationships with your customers can win you a lot of business and strengthen your revenues. Sharing experiences with CEO peers can help you learn through the mistakes and successes of others.
A lot of CEOs say their employees are their greatest asset. Clearly it’s easy to see in engineering firm, legal practices, and in medical groups that the employees are the real assets. But in every business the employees are critical to its success. That is why it is so important to invest in them through employee development as well.
In previous recessions, one of the first costs that
corporations cut was the cost of educating their employees. Training workers and developing new initiatives is expensive, and that expense was a big and easy target for companies under pressure to economize in hard times.
But according to a recent study highlighted in Strategy+Business, despite layoffs and corporate
restructuring, savvy executives are seeing education as the opportunity of the future for at least five
One reason is that education improves productivity — companies can get more output from each employee, so the cost is actually an investment that leads to higher profits.
The second reason is that companies can gain a competitive advantage by making their employees more competent and giving them broader “skill sets. With new skills employees are capable of handling bigger responsibilities and making decisions. Being able to empower employees at lower level can really help the company with retention and with its results. Not only that it’s a real motivator, because employees like challenging assignments that offer flexibility and growth.
The third reason is that learning improves morale, because workers realize that the company is not only planning on being around, but it is planning on keeping its employees around, too. It’s not going to invest in them and then fire them.
The fourth reason is the shift to a knowledge economy. In the 20th century model of a corporation, employees were trained in a rote task and then simply repeated it until they retired. Today, employees have to be able to think critically and analytically, to solve problems, and to innovate. To do so, they often have to move out of their area of specialty and do completely new tasks — and they have to keep up with a rapidly changing technological landscape.
The fifth reason is the aging of the Baby Boomers. As Boomers retire and take with them valuable skills and knowledge acquired over an entire career, those capabilities have to be transferred to younger employees who have not had a lifetime to absorb company-specific knowledge.
What approach have you taken? I hope you have you continued to invest in your people’s development, so they will be ready to meet the challenges of the future.
Actions to take now:
Review your personal development plans and decide if they will get you where you need to be.
If you don’t have any plans for your personal development or they are inadequate, decide what you will do to get better and when you will start.
Review your training and development plans for your employees. Are you making the necessary investments to prepare them for the future? If not decide what you can afford to do and do it.
Look at every opportunity to use your people to train others in the company. This can be very effective and considerable less expense than outside the company training.