Wednesday, 27 October 2010

To Grow or not to Grow? That is the Leadership Question!

You’ve heard the cry. “Recession is upon us, cut training, cut marketing, cut people, save money! Batten down the hatches and we’ll somehow survive this storm.” You just might, but will you be ready to take advantage of the upturn? Sadly not. A recent survey of 500 senior managers showed that 70% feared that they would not have the necessary skills to take advantage of the upturn, yet training budgets are under pressure.  The old wives tale of “train people and they’ll just leave for our competitors” seems increasingly to hold sway once again, along with “we don’t need to spend money, they’ll just be glad to have a job”.
So should leaders spend money on development during difficult times? How can you justify it when the pressure is on? Isn’t is right to cut back when finances are tight? All good questions to which the answers are: yes; difficult but do you need to: and yes and no!

Let’s look at the first question in more detail: should leaders spend money on development during difficult times? Ask a financier and the answer’s more likely to be no; ask someone from HR or L&D and the answer will be yes. Of course (you’ll say) HR & L&D people are bound to say yes because they are simply feathering their own nest. Perhaps some do but dig deeper and the real answer emerges. The real worth of any company lies in its people. Glib phrase but true. What will enable companies to weather this (and any other) storm are the people in it. Great product but poorly motivated people might mean you retain your customers in the short term but certainly not long term. Given that the conservative estimate of hiring someone in from outside is 150% of their base salary, why would you not want to save money and develop people from within?

A recent survey by Aon Consulting indicates that 47% of staff intend to look for alternative employment this year, a figure only topped by Ireland (49.4%) in Western Europe. In the current difficult economic times, employers are increasingly looking to save money by cutting down on salaries, benefits and pension options, and the results are (seemingly) increased dissatisfaction. But if you have top performers (and why wouldn’t you?) then your competitors will know who they are, and the more enlightened will look to use any dissatisfaction as a reason to poach them.

Interestingly some 70% of graduates said that development was more important to them than salary which says that they are looking for more than straight remuneration, and the same is true of those who are well passed the graduate stage – if of course you have the right people in your organisation. What motivates the top performers (by-and-large – though there are some who are only motivated by bonuses!) is their ability to grow, develop, be stretched, and take on new challenges. If you don’t provide that opportunity, then the moment there’s an opportunity elsewhere that does provide these elements, they’ll be off. If someone leaves, then you’ll need to spend all that money recruiting another, and if you are not able to demonstrate those opportunities to the new person, they won’t want to join you! So while it might be difficult to justify, it is right to continue to train, to grow and develop, if for no other reason than it’s cheaper in the long run!

Simon Hollington is a Director of Leading Edge Personal Development Ltd (, a company formed to release potential and improve performance. He can be contacted at or 07811 332280

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