The Metiss Group's Blog

President: “We need to invest more in developing our employees.”

Controller: “We can’t invest in them, what if they leave?”

President: “What if we don’t invest in them and they stay?”

The largest expense line item on most company’s income statement is their payroll.  Studies and corporate bottom lines show that companies reap many benefits from investing in training for employees.  Why is it then that leaders are reluctant to invest in developing their talent?

Based on the training investments of 575 companies during a three-year period, researchers found that firms investing the most in training and development (measured by total investment per employee and percentage of total gross payroll) yielded a 36.9 percent total shareholder return as compared with a 25.5 percent weighted return for the S&P 500 index for the same period. That’s a return 45 percent higher than the market average. These same firms also enjoyed higher profit margins, higher income per employee, and higher price-to-book ratios.

Firms that invest $1,500 per employee in training compared with those that spend $125 experience an average of 24 percent higher gross profit margins and 218 percent higher revenue per employee (source: Laurie J. Bassi et al., “Profiting From Learning: Do Firms’ Investments in Education and Training Pay Off?” American Society for Training and Development, 2000).

For example, The Cheesecake Factory, one of the most successful restaurant chains in the nation, spends about $2,000 per employee for training each year and reaps sales of $1,000 per square foot—more than twice the industry average.

Empower your team to invest in talent development and you’ll experience more success than your competition.

If you’re a baseball fan, you’ve probably seen times when a player begins to argue with an umpire and is about to be ejected from the game.  Suddenly their manager leaps out of the dugout and interrupts the argument, engaging the umpire while deflecting attention from their player.  The manager kicks dirt, throws objects, and screams inches from the umpire all in an attempt to rescue the player.  After the game, when tempers are back to normal and in the privacy of the clubhouse, the manager will offer feedback to the player, coaching them on what to do when experiencing similar situations in the future.

Empowering leaders challenge their direct reports by putting them in difficult situations.  Inevitably, direct reports will struggle as they learn from the experiences.  Good leaders know when to jump in and use their influence to prevent their direct report from embarrassing themselves.  After the incident, in calmer circumstances, the leader provides course correction coaching and helps the direct report grow from the situation.

Not only will the leader benefit from their direct report’s development, the direct report will move mountains for the leader in the future.

Empower your direct reports to pursue challenging tasks, jump in and save them when necessary, and you’ll experience more success.

If you’ve ever embarked on an exercise program, you know how difficult it is to stay committed.  Unless you have health issues, it’s one of those “important, not urgent” activities that frequently doesn’t get the proper attention.  Personal and professional development is another “important, not urgent” activity.  Like exercise, you know you are supposed to do personal development, but often don’t get around to it.  Similar to exercise, some are better at it than others and everyone feels better when they have finished.

Most regular exercisers will tell you that having workout buddies is what keeps them going and that is the key to effective personal development. Encourage your team to commit to working on similar developmental opportunities.  Group accountability is a great motivator.

One of the easiest development approaches is for the group to all read the same book.  The synergies and sharing coming out of the group as they recount parts of the book are amazing.  One leader we work with had his whole team read/reread Stephen Covey’s “The 7 Habits of Highly Effective People” then as a group talked how to apply the principles to their business.  The individuals benefited from personal growth, the team developed a greater bond, and the organization became more efficient – win-win-win.

Empower your team to grow together and you, your direct reports, and the organization will all experience more success.

We recently met a General Manager who has had an assistant manager working for him for the past six years.  The GM has groomed the protégée well, and the assistant is prepared for a more challenging role.  Unfortunately, the GM is not ready to move on and there is nowhere for the superstar to move up within the organization. Instead of enjoying the luxury of having a competent direct report staying on as his right-hand man forever, the GM strongly urged/requested the direct report look for a GM’s role in another organization.  The GM was beaming like a parent watching their child graduate from college as he told us about all the great opportunities for which his direct report was interviewing.

We admire the GM’s vision, altruism, and business savvy.  By realizing it was time for the direct report to leave and encouraging him to do so, the GM can now develop other leaders in the organization and will have a close colleague he can turn to within the industry.  If the assistant had stayed on, he would lack challenges and growth, would stagnate, and perhaps his work would suffer.

One of our favorite interview questions for leaders is to ask them to describe the accomplishments of their direct reports. How they have developed others provides great insight about their potential as a leader.

Empower your direct reports to gain the skills for them to outgrow their role, encourage them to move on to more challenging roles internally or externally, and you will both experience more success.