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Show me the money! That’s what every senior leader says to
the HR or training and development department when programs are initiated. They
want to see a return on investment. They want to see a result… a result that can
be measured. Get Now => Book | Kindle
This has been a perpetual dilemma between the C-suite and
human resources for years… for many reasons. Here’s my 2 main reasons. The
first is a misunderstanding of behavior change (and so programs are chosen that have little to no impact) and the second, there hasn’t been a common, easy to
use method to measure behavior and calculate returns.
Because of these and a few others, senior leadership sees most,
if not all of the spending on training and development as a cost rather than an
investment. (Which makes a request for “roi” kind of funny since most asking
for it don’t really see it as an investment, but a cost.”)
The sad part is, in many cases spending needs to occur
because there are operational demands that must be and can only be met with employees. But with “cost” as a line of thinking,
decisions are made that undermine the very thing needed to improve operations
and positively impacts profits. Leaders are in effect working against their own company needs and yet some blame others for it. This serves as a relentless frustration human resource
and talent management professionals face.
With a few bonus insights and nuggets, Show Me The Money! answers
these primary concerns:
1.How do we measure the impact and value of
training and developing our employees no matter the methodology (whether
e-learning, coaching, one day seminar, etc.) and
2.More broadly, how do we connect behavior to
money so that we can assess and wisely spend to address employee performance.
For the most complete financial management of any size
organization, understanding and being able to valuate how money is spent on
a company’s human resource is essential. Very few leaders know how to do this. When the
popular phrase, “We can’t afford it” is used, it's a reflection of this. My response to many clients, “When you understand behavior and the financial impact
on your operations and company goals, you can’t afford not to. It’s costing you
– one way or the other.”
I’ve had conversations where they “know” training and
development is needed and yet refuse to take action aka spend money….yet “knowing”
it could help them make more money and mitigate losses. In essence they are
saying, “We are making enough profits, I don’t care that we’re loosing a bit of
money and I don’t want to risk any money to do anything about it.”
I guess it’s ok for a company leader to say, we make enough
profits. But it doesn’t seem rational. Don’t most leaders want to make as much
as they can while minimizing losses?
What this type of conversation
really reflects, is a mental block and a lack of knowledge and understanding that
investing in specific behaviors (aka employee performance and development) can improve
operations and thus generate more profits. In fact, there is no risk at all if
implemented properly. By the way, the area in which this conversation feels the
most ridiculous is management training… you have a retention problem but you
can’t afford management training. After reading Show Me The Money!, that will not be said again.
Show Me The Money!
Is a must read for any one who manages and leads. It provides a definitive
paradigm shift in how to view employee behavior/performance (I describe it as being behavior
literate) and how to apply financial value to that behavior in the context of
business operations (termed financial literacy).
If you are a human resource/talent management professional it is a must have because it meets 2 compelling needs in our industries:
for business acumen
can serve as a guide to accelerate your business acumen helping you become an expert
advisor and internal consultant with key decision-makers. It will raise and reinforce your status as a relevant, invaluable business partner.
2.Need for a simple method/approach
for calculation ROI (and employee performance in general)
will give you the simple methodology you need to prove with numbers the value of
the initiatives you promote and advocate.
You will be able to make a
business case for more effective talent management
This is a new release, so coming in the next few months will be a few webinars and leadership roundtables. I recommend you subscribe to the blog to continue to learn more and be notified of any scheduling.