Wednesday, 12 November 2008

Why Training is Essential in a Recession

Many senior managers and business leaders will take the view that discretionary spending must be reduced or eliminated in a recession - it's one of the founding principles behind prudent financial management. And of course, training falls into that category, right?


In a recession, businesses will generally need to downsize which means they need to get greater performance from the fewer resources that remain. And this is the key factor that makes high quality training an essential component of businesses successfully navigating their way through a recession. Let's look at this purely from the perspective of leadership training, although the same principles apply to general staff training.

When resources are cut to the minimum there is no room for passengers or dead wood - everybody has to deliver. And it is the people leaders within the business who need to ensure that everybody delivers by exhibiting exceptional leadership skills.

  • They need to manage performance like many have never done so before

  • They need to upskill their people by coaching effectively

  • They need to motivate their staff when the overall mood might be gloomy

  • They need to instigate process improvements

  • They need to allocate workloads more effectively

  • They need to be creative and innovative when addressing challenges

  • And most of all, they need to get their people really working as a team
In short, leadership skills need to be at their peak if the organisation is going to get the level of performance required from the reduced resources that are available. The really smart organisations would have invested heavily in leadership development when times were good so they already had these skills in abundance as we enter a recession. But here's the thing - when times are good, leaders often don't have the time to attend training courses and even when they do, the hectic environment of growth often doesn't provide people with the opportunity to fully apply what they have learned.

So now is the time to grasp the nettle. As with any discretionary spend the key metric is that the return on investment must be significantly greater than the spend itself and here's how this applies to leadership training:
  1. Leaders must be selected based on the fact that they can improve on one or more of the factors bulletted above.
  2. The leadership training or workshop must be selected on quality first and price second. In particular, the focus should be on the scope and depth of the learning outcomes.
  3. Leaders must be empowered to apply what they have learned upon their return to work and fully supported in this endeavour.
  4. Leaders, provided they are given the appropriate support, should be expected to deliver improved performance via their people.
  5. Leaders should be expected to continue this higher level of performance once good times return once again, ensuring that the organisation exits recession stronger than it entered.

Senior managers and business leaders who adopt a broad brush, cost cutting approach while expecting the remaining resources to deliver improved performance without powerful training interventions are missing the point. Improving the capability of staff (and people leaders in particular) is more critical in a recession than at any other time.

Simon Cooper is chief executive of the Experiential Learning Centre, author of the exciting new book, Brilliant Leader and architect of the Brilliant Leadership workshops.

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