When I receive an “invitation to tender” or a “request for proposal” for a management training programme I get quite excited. Here’s another opportunity to help an organisation really transform the capability of it’s operational managers, inject more leadership behaviour, unleash a more inspired management population. So, I set about thinking about all those necessary elements that need to be in place to both provide the development and learning, along with a mechanism for the measurement of a person’s progress over the programme period i.e training evaluation. Herein lies the biggest blockage to a successful management training programme. This approach is what I would call high quality and necessary. Many potential clients would call it expensive and in a tender situation it can become a penny pinching exercise, scaling back to fit a predetermined budget.
So many times I’ve seen this kind of approach to engaging in management development and it can be really frustrating. Don’t get me wrong, I fully understand the need to trade off cash with the ideals of what we could achieve. However, if you are the kind that builds “return on investment” into their programmes as a matter of course, the issue of physical cash should become less of a problem. Here’s why.
In simple terms, if I spend 500k on a piece of kit or an asset to the business, then I’d expect a return of anywhere between 20% and 50% depending on the ability of the kit to earn or save money. If I’m really lucky it may have the ability to generate me double what I put in. So if I invest, say 2k on a person’s development, they should be able to return me maybe 2-3k worth of saving or improvement. Not wholly unreasonable is it?
Now imagine your management development programme is going to develop 130 managers and each one costs you 2k, that’s a huge 260k of investment! That’s a pretty sizable number for a training programme! So, each of your delegates has to improve an aspect of their business area to the tune of 2k and the programme will have paid for itself. In reality some people may save more and some less, but the key thing is that they are saving and improving things, whilst at the same time growing their own capability.
In a recent programme I’ve been working on, the savings from delegates ranged from 10k to 1.2million. The average was around 40k. Given that there were 130 delegates that works out somewhere around the 520k mark. In reality, taking into account actual savings, this client has saved just under 2million from the improvements delegates have made. Now our 260k programme fee doesn’t look like such a large investment!
So, coming back to my topic, many management and leadership development programmes fail because often the client predetermines the budget with no concept of the “return on investment” and often sees it as another training programme. Alternatively, the supplier fails to create a strong mechanism for producing tangible improvement or does it half-heartedly. At the end of these programmes the client is often left with the view that it was a big investment for not much gain, which if managed correctly clearly doesn’t have to be the case.
Oh and I haven’t even talked about all the other intangible improvements which offer additional benefits such as employee satisfaction, retention, sickness, internal promotions and the service your customers get. Why didn’t I mention these things earlier? Well, because this is typically the stuff that the other suppliers focus on instead of the tangible return on investment. Most of which is affected by any number of other projects, initiatives or situations that occur in everyday working.
So, when you are developing your thoughts for a leadership or management programme, understand what you expect the returns should be from the programme and then consider how much you’d be willing to invest to achieve that return. Then you hopefully have a sensible framework with which to engage a supplier.