How to invest in your employees and guarantee high ROI

Posted on May 08, 2017 by Faiyaz Farouk, One of Thousands of Business Coaches on Noomii.

According to the Association of Talent Development (ATD), companies in the United States invested over $164M in training and development in 2015. ATD recognizes that training is still a major priority across most sectors and trade in Executive agenda. Have you ever wondered if your money expended on training was actually well spent or created any measurable return (ROI)? In my years of having trained thousands of people from all over the world, I’ve heard most Senior Managers say they do feel there is a benefit, but have never measured it. Some don’t even know that measuring training is possible. Typically, they associate training as likes of motivational seminars. It makes the Executives feel worthy about the support their attempting to provide their employees and it’s usually a great recruiting tool to say “we train our people.” Most managers conduct training without having any sound reason or purpose. If money is budgeted for training purposes, it has to be done, right? It’s like the stories you hear about military spending. Every year, all of the unused bullets are used to purchase new ones to keep up with the budget. Doesn’t this sound ridiculous? When I asked the attendees the same question, they would often respond with answers such as: it was something they had to do and it was time off from their daily work. Both of these intentions and responses are the very root cause of why most trainings fail to deliver results and why training alone is not the solution.

​What is the solution? Well, I may sound like a cynic being that I’ve managed an international training organization for some time. However, that experience along with being an Executive in charge of hiring training organizations and today working as a change agent, I am qualified to make the following statement. With a high degree of confidence, I can tell you that I don’t believe that training alone or training only firms are the solution to most organizational challenges. As an Executive, I always measured for a return on every dollar that wasn’t responsible for directly creating revenue that left our company; this discipline gave me greater results and yields in a faster time frame than most of my colleagues or predecessors before me.

A common framework some training organizations use to achieve maximum peak effectiveness and permanent change is to measure every single time. In order to measure, you must have a start position, set goal(s), train, coach, and measure again. If the goals set haven’t been achieved, then train again, tweak the coaching, and measure again. Surprisingly, most training companies aren’t equipped with qualified coaches and most coaches aren’t qualified trainers. There is an art and skill set to both duties, but there is still a missing component to this entire formula and the way we have been looking at training and coaching. Using this method today is like paying for pagers that your company isn’t using anymore, or having Windows 2000 as your operating system. Sadly enough, I do know of Fortune companies that still have pagers on their expenses and never use them. We can all agree this is a total waste of money.

An additional flaw with this formula is that it assumes the organizational system the individual belongs to and is being trained for is optimal to begin with. Over the past decade, I have discovered that this theory couldn’t be farther than the reality. This is why training and coaching isn’t enough. The organization providing the training and coaching solutions must be able to understand the entire cycle of your business and how this role is applicable to your process flow. They must also understand with experience at some level and relate to their students. This is where most in-house trainers fail. They aren’t experienced enough on the business side to be effective. But then again, most corporate trainers use videos and workbooks to use up their allotted time because accountability is not a factor.

This leads to the question: What is the biggest missing component of all the money and time wasted in training and coaching? The answer is “systems thinking.” Having spent a good amount of time learning about this approach at The Drucker School of Management, I am now a believer. What is “systems thinking” and why is it relevant to training for change? By dictionary definition, “systems thinking” is a holistic approach to analysis that focuses on the way a system’s constituent parts interrelate and how systems work over time and within the context of larger systems. It involves detailed diagrams of how everything works together and by changing the aptitude of the manager can increase or decrease whatever is being measured. This is not a systems thinking paper; however, I would recommend looking into this business theory in detail or contact us for consultation.

​Some years ago, I had the honor of auditing a management training program designed by a small training company. The awesome salesperson who sold the multi-million dollar program was also the trainer and creator of the program. What was interesting about this program was that the salesperson had no idea how the companies actually operated! Obviously, a company’s cultures and details are critical to success of every manager. He knew enough to have small discussions with the Executive team and lead training groups throughout the country. Additionally, he understood very well the training he designed and found a way to fit it into the current strategy the company had. Unfortunately, the training lacked the framework for mangers to follow and greater insights for experienced managers to adopt (framework like Peter Druckersseven steps in decision making for managers as an example that we offer in our organization, RowPoint). The program’s adoption rate by the managers was less than 30%, which was why I was hired to help figure out the reasons and gaps in the training and adoption process. During my investigation, I discovered that the root cause of the 30% achievement was due to the trainees’ unwillingness to change their routine, adhere to the trainer’s philosophy, and adapt to their generic, non-systematic training material. The experienced managers didn’t “buy-in” to the new methodology. When we ran several private focus groups, we discovered no one respected the Executive decision on hiring the firm and the training itself. We also learned that the training company failed to understand the nature of the business and most importantly the aging management team who was used to achieving revenue budgets using their own methods.

What was the solution? The goal of the new management training was to provide managers with tools to help drive more revenue, yet there was no sales training for the sales team which worked directly with the managers for revenue generation. My report back to the Executive team was just like Obamacare; it’s a step in the right direction, but wasting billions of dollars on a website and increasing premiums for hardworking adults is not the right and focused solution. After some discussion, the company decided to scrap the training program and our firm was hired to create a comprehensive program for managers, sales teams and the Executives to follow. The program launched in February of 2015, and my last conversation with the Executive team and our own field feedback we received was very positive. Over a 70% adoption rate with managers was achieved along with a 300% increase in revenue.

​​Let’s take another look at how “systems thinking” could have rescued another company. A family run commercial van company contacted me regarding enhancing their small sales team capabilities. After an initial analysis, we were in agreement with the management team that the organization was missing over 30% of buyers that were ready to purchase. The number would equate to over $10M in annual sales if they implemented a sales system, training and coaching that helped enhance and enforce the system. During our analysis, we discovered many key management holes that needed to be filled to help solve the challenge. Some of the gaps were in finance, service, and the insurance departments of the companies, which directly affected sales. We recommended they needed more than just sale training. This concept of a complete sales and management overhaul we proposed was outrageous to the management team. Wrongfully so, they felt the company didn’t need a system but merely sales training. The management team refused our proposal since they felt they didn’t need to change their ways to make more money. Needless to say, we humbly declined the opportunity to provide only sales training. With a high degree of confidence, we knew that sales training would generate little to no measurable results and it wouldn’t be a permanent change for the sales team.

At RowPoint, we take pride in the fact that our organization’s sales training has a strong reputation of creating major permanent changes in sales revenues. Ann average sales person who graduates from our one day programs, can increase his or her sales by 23% in less than 60 days. For any training to be effective and have a lasting effect, it needs to be holistic in approach and have all the necessary tools to help the organization. A comprehensive program includes: an analysis from external and internal sources, a training program that is short in duration, and consistent coaching for direct behavior and a skill sets change and measuring process to track the return on the investment.

If you are seeking to improve your organization’s management or sales force in 2016, please look us up and let’s have a discussion on how we can become your partner.

Tell us your thoughts on your previous training and coaching you’ve gone through or your organization.

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