Corporate training positions your company for future growth Featured

8:00pm EDT June 25, 2010

The training was a failure. All of that time, all of that effort, all of that money, just gone, just out the window and gone. What other explanation was there, after all, for drop after drop in the hard numbers from a talented sales team in the wake of a training and development session?

It could have happened at any business, but for the purposes of this story, it happened at a large technology company with headquarters in the Midwest. The top executives, frantic for answers, called a corporate training firm. “Our sales are down,” the executives said. “We need training.”

That technology company was part of a large percentage of businesses that continued to invest in corporate training, education and development during the last couple of years. Thousands and thousands of others turned away from training, unable or unwilling to spend more money during the recession.

But a panel of more than 30 industry experts and academic professionals agreed that it would have been far better for businesses to continue to spend on training during those tough times — to invest in their employees and to show the extent of that investment, to improve the business and keep it up to date, to be in a better position when the economy ultimately turns around — than to tighten the budget. The same rule applies now, too.

“It has to start with the company’s strategy for winning in this economy,” says Melanie Weaver Barnett, chief executive of executive education, Stephen M. Ross School of Business, University of Michigan. “Then there has to be a thoughtful approach to determining the organizational capabilities necessary to realize this strategy, and then an honest assessment of the current reality with regard to those organizational capabilities. What emerges are the gaps in capabilities.”

Make a plan

Members of the corporate training firm arrived the next day and talked with as many employees as possible at the technology company, from executives to engineers to those slumping sales representatives and everyone else in between. They prodded and probed and asked questions. They were curious about what, exactly, had happened.

They wanted to know, before they embarked on another training session, whether another training session was actually necessary.

This is what you should do when you’re in the process of determining whether to invest in training and development for your employees. You should prod and probe and plan, because just as you shouldn’t approach a new business venture without a model and a solid idea of what you want to accomplish, neither should you approach training without thoughts of what you need to tackle.

“This is the key question, and the answer is ... it depends on the company, their strategic and business objectives, their culture, their current capabilities, their revenue projections,” says Sandi Nielsen, director, Professional Education Center, College of Business, Eastern Michigan University. “Where one company may be focused on new product research and development and need innovation training for employees, another company may be strategically focused on customer service and satisfaction and require relationship building and interpersonal skills training for staff.”

And even though those needs will vary from business to business, from industry to industry, there are a number of common training areas on which almost all businesses should focus. Leadership development, project management and team building are all increasingly important because of the changing demographics and economy and because general communication and technology skills are as important now as always.

“The work force demographics are changing and more young, bright employees are moving into management and leadership roles without the training or experience needed to be effective,” Nielsen says. “Having the technical knowledge and experience is one aspect of leadership but not the most important. In order to lead effectively and achieve performance objectives, they need to be able to lead, motivate, build working relationships, define vision, mission and goals, inspire, coach, develop, monitor performance, and provide feedback to others.”

Open your wallet

Those members of the corporate training firm remained in the offices for a couple of days. They wanted to follow every lead and turn over every stone. They wanted to find out what had happened to the sales team after that apparently disastrous training and development session. And the technology company executives had no problem paying to keep them around. They wanted to find out what happened, too.

Do you want to keep your top employees after the job market opens again? Do you want all of your employees to be happy and to enjoy their work right now? Investing in training and education is an important part of helping you do just that. The average business spends about $1,060 on training and education per employee per year, according to research by ASTD.

There are also effective ways to spend a little less, if your revenue is still down or if you opt to not invest as much in training. Turning toward local colleges and universities to design a custom program for your employees is often less expensive than sending them to open enrollment courses, as are distance learning and online courses. Some businesses opt to look within for employees who are experts in a specific area and can train the rest of the staff.

“What we’re seeing from the smartest and best-performing companies is there still is this strong demand for the face-to-face learning experience but also that there is some development that can be done with different technologies,” Barnett says. “We’re seeing learning initiatives that are very integrated with the company strategy and with the real work of the company.”

Keep an eye on results

At last, an answer for our corporate training firm and our technology company in the Midwest. That previous training session, as it turned out, was not to blame for lower sales numbers. No, the culprit was instead the fact that the technology company executives had recently installed a drastic restructure of the compensation program. That program encouraged the sales team to try and sell only one of their many products, and that is what changed everything.

The training had not been the problem at all.

In fact, without that recent training session, the technology business might have planted itself in more trouble because of the new structure of the compensation program. The best money spent might well have been the money spent on the training — and the worst might have been the money that was about to have been spent unnecessarily correcting that training.

“You have to look at several things,” Barnett says. “One is, ‘What is the cost of not doing this? If we don’t develop our people, what are the likely consequences and how costly will that be?’”

The only way to know where you are is to know where you were. In order to receive a more relevant return on your investment, watch the progress from the planning stages through the training itself, then during the months, even years, beyond.

“This time of slowed productivity and action is perfect to spend building the skills, knowledge and behaviors that will be needed and critical to the company and the work force when the economy and business picks up again,” Nielsen says. “Building the capacity of leaders to lead and drive organizational change is critical. And building company cultures focused on building relationships — with customers, vendors, suppliers and employees — and on innovation today will drive business in the future.”