Organizations and their senior leaders will often publicly say that their people are the most important resource they have.
Then they will routinely cut training budgets before executive perks. The HR team will be marginalized. The customer service organization will cut back severely.
Here are some numbers that talk to the return on investment individuals and companies get from investing in developing the talent of their people…
An American Society of Training; Development (ASTD) study on the value of training, found that companies with well-designed training programs had on average:
– 57% higher net sales per worker
– 37% higher gross profits per worker
– 20% higher ratio in market-to-book values.
Companies with above-average leadership talent enjoy above-average 36-month revenue growth relative to their industry peer group. (Corporate Leadership Council)
A McKinsey study titled: “The War for Talent,” found that firms with leadership depth were much more profitable than those without it. And yet, one recent Conference Board study found that only 54% of companies felt they had the leadership necessary to respond to change, and only 8% of executives rated overall leadership as excellent. (The War for Talent, HBR 2001)
A landmark study in 1997 showed companies that scored high in their ability to manage highly talented employees earned a 22 percent higher return to shareholders than their industry peers. Companies that scored low in talent management created earnings on par with their industry peers. (McKinsey; Company, 1997)
According to a study conducted by the Corporate Executive Board in 2006, rising leaders reporting to senior leaders who are very effective at developing other leaders:
– Outperform their peers by as much as 27%
– Put forth 18% more discretionary effort
– Are 25% more likely to stay [retention]
– Are 25% more committed to their organizations [loyalty]
And yet nearly eight out of ten senior leaders say their organizations are only mildly effective at showing them how to prepare rising leaders for more senior roles. (Corporate Executive Board)
The numbers go on and on. The bottom line is clear… If you want to win in today’s crazy competitive landscape, you will only win with a team that is more talented than the competition.
When was the last time you invested in your team’s development? When was the last time you invested in your own development?
