Why Training Should Be the #1 Investment for CEOs
I was reading an article titled “A Legend’s Look at Learning” in CLO Magazine written by two folks I have known for a lot of years, Jack and Patti Phillips from the ROI Institute. They were writing about a new Tom Peters book titled “The Excellence Dividend: Meeting the Tech Tide with Work That Wows and Jobs That Last”.
In his new book, Peters dedicated an entire chapter to the importance of training. He believes training is critical and investments in training should be significant. In his book, Peters makes some huge bets on how executives perceive training:
His conclusion is that training should be investment #1 for CEO’s and that training investments pay off immediately.
- Bet 1: 5 of 10 CEO’s see training as an expense rather than an investment
- Bet 2: 5 of 10 CEO’s see training as defense rather than offense
- Bet 3: 5 of 10 CEO’s see training as a necessary evil rather than a strategic opportunity
- Bet 4: 8 of 10 CEO’s, in a 45-minute tour d ’horizon of their business, would not mention training.
I am reminded of what we wrote in Running Training Like A Business” 19 years ago that business executives are sold on learning, but they are not sold on training. They see training in this way:
We suggested that the future for training should be that it is:
- They are skeptical of the people and processes
- They see training as fixing a problem
- They see it as intrinsically tactical
- And, it delivers improved performance … sometimes.
So, Tom and I are pretty closely aligned on this. The big question, however, is why after 19 years, do CEO’s continue to not be sold on training? As I have argued often, I believe it is all about creating measurable business value and that, as a whole, L&D has a broken investment/value equation. Jack and Patti, in their article, said “To see learning as an investment, strategic, expensive and important programs must add business value. This pushes the evaluation of learning to the impact level with a clear connection between learning and business impact.” I also believe that executives have a low expectation of training, likely because we have not shown them what is possible. This expectation thing is not a trivial matter. It is what causes CEO’s to think that training is a cost and is not strategic,
- An important strategic player
- Considered a source of competitive advantage
- Focused on the application not the activity
- Viewed as an investment
- Demonstrating tangible value.
So, what should we do to dramatically change these CEO’s perception of training? First and foremost, we need to talk with them, help them understand the potential that training offers to their business, and help them raise their expectations of training. Secondly, we need to identify some key projects where training can have a significant business impact and nail them. And we must measure and quantify the business impact. If we do this enough times, the confidence level of executives for investing in training will grow and their expectations will go up.
A guy who wrote a book titled In Search of Excellence and for 4 decades has spent much of his time with top corporate executives says what we do is critically important. You should all go out and buy his book and give it to your CEO with a note attached saying “Read the chapter on training and then let’s talk!"