Your Most Important Investment

“Imagine a company spending one-third of the revenue on a capital investment or an interest payment and never addressing it with shareholders in their annual report,” said Rick Guzzo, a Mercer consultant. “It’s unthinkable.”

Mercer Human Resource Consulting, a unit of insurance brokerage Marsh &McLennan, conducted a Two Year Study of the 100 largest publicly traded American companies.

25% of the largest publicly traded companies included a platitude equivalent to, “our people are our greatest asset”.

20% of the companies actually included human capital contribution to business success in the annual reports.
Budgets track the expense of employees, benefits, travel and entertainment.

How do you measure contributions and impact of personal performance?

What is the impact to revenue, risk or cost control if the human asset is missing or not functional for an extended time?

What would it cost to replace them and train someone else? How long to train, how much experience lost and how much productivity would you lose?

If you invest time and money to improve the efficiency of your most valuable asset, human capital, how will you measure the Return on Investment?

How do you communicate the value of personal performance on a regular and frequent basis?

The biggest impact to controlling costs, generating revenue and operating the business is the time and talent of the individuals. Success is the result of collaborative individual performance. Measure, monitor and invest appropriately in the biggest impact to your business. If the people thrive then the business will follow.

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Words of Wisdom

“Good people are in short supply. Whether you’re an investor, a company owner, or someone strategically tying to figure out what to do in business, you need to pay more attention to employee motivation and human relations.”
- Esther Dyson, Chairwoman, EDventure Holdings

“Don’t try to change people. Instead, work to improve them.”
- Doug Blevins, performance coach for professional athletes

“You’re only as good as your people, that’s why the war for talent is intense.”
- Thomas Weisel, founder and CEO, Thomas Weisel Partners

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Deadly Reason For Business Failure – Refusing to Spend Money on Employee Training

In business, you must learn how to work it the right way. Otherwise, you can’t expect to make money. Without proper training, you have no right expecting to make any money.

When you spend money on a product you have a better chance of learning something valuable than if you depend on free information for your education. Never be afraid to spend money to make money. True business people are NOT afraid to spend money or lose money.

Some people simply refuse to spend any money on their own education. Or they buy one book thinking they’ve done something positive. Doing something positive for yourself is buying many books.

If you don’t learn how to work this business the right way, how on earth can you expect to make any money? In two words: YOU CAN’T!

Invest in Employee Training for Business Success

For example,many entrepreneurs seem to view employee training and development as more optional than essential, an undesired perspective that may prove costly to both short-term profit and long-term progress.

The main reason why training is considered optional by some business owners is because it’s regarded as an expense rather than an investment. This is understandable when you realise that in some organisations, training and development aren’t focused on producing a targeted result for the business.

As a result, business owners frequently send employees to training courses that seem correct without knowing what to expect in return. Without a measurable result, it’s impossible to view training as anything more than an expense.

Establishing your training needs based on targeted results is just the start.

The Importance of Continual Learning

In today’s context, if your business isn’t learning, then you’re going to lag behind competition – a business learns as its people learn. Your employees are the ones who produce, deliver,refine and manage your products or services all year round.

With the rapid pace of the modern marketplace, continual learning is critical to business productivity,efficiency and ultimately,success.

Create a Learning Culture

How to create a learning culture in your business? Begin by clearly communicating your expectations so that employees can take necessary steps to hone their skills to stay on top of their professions. Ensure that you support their efforts in this area.Supply the resources they need to accomplish this goal.

Next, communicate to your employees the specific training needs and targeted results you’ve established.

Provide an orientation to your organisation’s culture, including your learning culture, to new employees you hire. This orientation should introduce employees to your organisation and provide them with proper training in the procedures your organisation developed over time.

Your employees are your core business asset. Invest in them thoughtfully and strategically, and you’ll reap rewards that pay off now and for years to come.

Business Owner’s Manifesto: Must Do’s

A GOOD INVESTMENT – I am the Leader of this business and am responsible to see that the business is treated and evaluated on the same basis as any business investment I might make, both in terms of time and money invested. I may have paid managers and staff to perform some or even all of the day-to-day tasks, but ensuring an adequate return on investment (blood, sweat and money) is my responsibility and my responsibility alone.

ACHIEVING SECURITY/ROI – I recognize that there are two components of an adequate return: First, time invested must be compensated through salary, benefits and perks; AND, money invested must be guaranteed a fair rate of return plus a premium for the level of risk assumed (by operating a small business – usually 3-5% over prime). Adequate returns do not just happen; they are achieved through planning and action. This commitment involves setting realistic, quantifiable goals; taking the steps necessary to see to it that those goals are achieved; that results are measured and meet expectations; that we celebrate our victories; and, that we adapt, as needed, along the way.

IT’S A BUSINESS – I am responsible to ensure that the business I have invested in has a real business and community purpose. This means: I must be realistic about not throwing good money after bad; about separating real business activity from my own ego gratification; and about assuring at least a baseline of security for myself and those who depend on this business by taking prudent risks.

I am responsible to the people who work in my business. This involves: establishing organizational goals; providing direction about their responsibilities in meeting these goals; setting standards of performance; and providing job performance feedback. This organized approach frees employees to perform effectively because it assures them that their positions are not held capriciously at my whim and that their paychecks are not constantly in jeopardy. This approach also facilitates identifying organizational successes and potential roadblocks. In a world of rapid change, just a little perceived security goes a long way.

Finally, I am responsible to myself, my family and my other stakeholders to engage in an active program of succession planning. Timely, thorough succession planning can facilitate a smooth transition when the day comes that I determine that: the business is no longer viable; I have personally had enough of it; or, it has just become time for me to step aside.