What ROI do you get from your management team?

If the employees of most organisations were lined up against the wall with the very best at one end and the least performing at the other (I’m not suggesting you do this by the way), the top third would be a group that you are privileged to have, the middle would be average and the bottom third, if you were honest, you’re probably better off without.

I’ve recently heard it said that the return from a talented, engaged and motivated employee can be up to 10 times than of a disengaged one. When I suggest this to my clients, I rarely get any push back, which tells me that it must be a fair, albeit staggering, possibility.

It’s also not unreasonable to apply the same sort of statistics to your management team.

If these ideas are any where near true for your organisation, then there’s a massive amount of potential that you’re not tapping. You invest huge sums of money in the directors and other managers, but are you getting the best bang for your buck?

Example:

Let’s play with some numbers here. Say you have 8 people in your management team. You pay them an average of £60k per annum, so nearer £75k when you include NIC, pension and other associated costs. Lets also assume you were tapping say 50% of their potential (probably the average I hear when I ask business owners).

If you were to uplift the all-round performance from that team from 50% to just 75%, the effect on the business, just at a cost level, let alone the opportunity cost level, would be a massive £150,000 (8 x £75k x 25%). That’s a direct hit in the bottom line with no more customers and no more effort. It is also a gain in each and every year, so over say 10 years it’s £1.5m. What’s more, I think these figures are probably conservative for most businesses.

I wonder what the average CEO, managing director or training manager is doing to tackle this issue? Like the most forward-thinking companies, I wouldn’t hesitate in setting up a Leadership Academy. A customised blend of training and coaching, both F2F and online to support, inspire and train the most expensive resource in the business. The cost is a fraction of the benefit and perhaps the most leveraged use of an investment budget.

What’s your approach?

http://www.paulhopwoodconsulting.co.uk/blended-learning.php

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About paulhopwood

Teaching, guiding and mentoring professional service firms and successful business owners, providing them with time to think. Love family, reading and walking. Brighton UK www.paulhopwoodconsulting.co.uk
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