People development: Stop spending, start thinking

During the 2007 financial crisis, consulting and coaching clients often asked me: “Could we deliver similar value this year from half of the budget?” Ironically, we could. I often quoted the advertising adage that says that half your budget is always wasted, but you cannot be sure which half. In people development, efficiency is similarly disheartening but improvement is easier.

At each year-end, managers decide where they will invest funds allocated to taking employees to their next level of success. Choices are tough: one mistake and you can lose both your bonus and some of next year’s budget. They are made harder by the proliferation of products, methodologies and gimmicks that claim to be ‘the next revolution’ in corporate learning. Under pressure to perform, HR often follows the best marketing. The cycle restarts the following year.

To understand how companies waste much of their people development allowance, compare corporate learning to fitness. What I hear from many companies is comparable to a hypothetical CFO (Chief Fitness Officer) telling me that last year, they involved their managers in a 2-week pilates course, followed by a week of weight-lifting. They also purchased spinning equipment and books on healthy diet. Fitness at the firm didn’t improve radically, so this year they offered horse-riding and hired an in-house yoga instructor for a month. What would I suggest they do next year?

Sports and people development share a fallacy — conflating short-term with long-term perspectives, or entertainment with development. People who use newly bought CrossFit equipment once, then tuck it into a cupboard pay the same amount as habitual users. But while the difference is negligible for vendors, it is significant for buyers. Similarly, people development professionals should start the purchasing process by deciding whether they want to impress participants with the latest fashion brand, or aim for consistent improvement in the context of past and future activities.

Of course, our industry is plagued by the notoriously elusive connection between efforts and results. It’s easier to convincingly connect office furniture design to core performance figures than coaching or training. Business has too many variables, and consultants spend too little time with their clients, to demonstrate clear causality. But one thing is obvious: despite joint efforts by providers and clients, sluggish productivity growth and Gallup's claim of a 13% global employee engagement fail to match growing investment into consulting. Somewhere between cause and effect, there is serious leakage of resources.

Clients I visit spend vast annual sums on training, coaching and other forms of people development. Some have high potential, like Gallup’s StrengthsFinder, a top choice by leading companies. Some are desperate, like a tech firm that hired standup comedians to train entertaining presentation methods. Depressingly often, like aspiring exercisers with laundry on their treadmill, they show ubiquitous signs of abandoned efforts: faded motivational posters, certificates and dusty stress toys with familiar consulting brands. When, for instance, managers certified in Stephen Covey’s 7 Habits cannot recall the full list of seven items, there is an obvious crack in the budget pipeline.

We can partially blame a tragic current trend: overconsumption. Advanced marketing solicits essential and useless merchandise alike. According to WHO, by 2025 the global number of obese children will exceed starving ones. We need exercise precisely because of our consumption habits. Similarly, marketing lures managers to boasting trophy certificates on social media. But when star products fail to deliver miracles, frustration is vented on the development professionals who purchased them. Acknowledging this battle between our modern urge to consume and the instinctive need to grow is essential for productive people development. Here is what I recommend to my clients.

Awareness: Clean those dusty cupboards

Like sports equipment, learning tools pile up and become rubbish. Organisations often introduce new values, competencies, performance management and training models without much heed to previous versions. First, I sit down with top management and help them decide which elements are non-negotiable (perhaps due to global strategy), which can be reused after a dust-off, and which ones are obsolete. We often start from several competing assessment tools, competency and leadership models that confuse managers and undermine HR’s credibility.

Discretely dumping unused models isn’t enough — clarity comes from active communication. This is hard, because humans (and corporate leaders are human) hate the so-called cognitive dissonance caused by admitting to opinion changes. They shouldn’t: employees are smart enough to notice about-faces without being told. Official clarification reduces frustration over constant changes, and contributes to commitment (‘buy-in’, if you prefer) to the chosen methods.

Skills: From aspiration to perspiration

The next step is to re-visit and replicate your most rewarding past efforts. Development tools have multiple applications, but most buyers never use their full potential. Some of my clients previously enrolled entire units in StrengthsFinder or DISC, delivered brief workshops and never explored further applications in delegation, promotion, succession planning, conflict management and cross-functional cooperation. A CEO I recently coached sported four different assessment profiles he completed at the same company and never used since.

Admittedly, inspiring managers to apply existing tools is harder than unveiling the training equivalent of the latest iPhone. Author of The Leading Brain Dr. Hagemann names two elements triggering attention: novelty and relevance. Sacrificing the second for the first is a mistake — novelty fades fast. Instead, host practical activities where teams apply familiar models to real-work problems. An MLG workshop I deliver this week in Singapore applies StrengthsFinder to implementing a German company’s digitalisation strategy, drafting leadership approaches to each talent type’s resistance style. At another, we turned the firm’s competence list into a problem solving workshop.

Habits: Cultivate a development culture

If people development is your HR or learning department’s sole responsibility, you’re in as much trouble as if only your quality department cared about quality. Whichever tool or method you use, it must penetrate daily meetings, documents, emails and tea-time chats — or “become the company’s shared language”, as the GM of a Swedish retail client told me. At their meetings, I hear managers request ‘someone higher D’ for a project, referring to their globally adopted assessment system.

That, of course, requires regular communication with professionals, managers and executives who usually roll their eyes at ‘HR stuff’. Others are generally supportive but consider themselves too busy to get involved. But ultimately, everyone in business cares about results and money — and that’s what a genuine rethinking of your people development strategy can deliver.