Business owners have long considered short-term and long-range investments as part of the overall planning process. In a typical year, business owners will include IT and infrastructure as long-range priorities for the capital budget. Seldom do we hear that an investment in organizational talent and leadership will rise to this level of discussion with entrepreneurial businesses.
While human resource investments may have been discussed in budget meetings, the discussion focuses more on controlling costs than advancing the company. These discussions are reactive wanderings, not strategic insights.
Companies need to continue investing in targeted training and leadership development efforts. A more robust investment strategy will not only provide financial returns, but competitive advantage – even in today’s climate.

Avoid the status quo
Status quo is not an option. We need to adapt. We cannot simply wish it away, hunker down or work harder in the same way. The market is different, and our response needs to be innovative to prove successful.
Every business can purchase the same equipment, software and infrastructure. As business owners, you can only watch those investments depreciate. Leading thinkers know that annual investments of 3.5 to 5.0 percent in human capital are worth it. Such investment, when aligned to strategic goals, provides measurable returns and competitive advantage. People, when challenged, engaged and led, are the one asset that appreciates over time.
Consider the suggestions below to navigate a new investment strategy:

Lead the Change
As the business owner, you must take the lead.
u Put investment in training and leadership development on your executive team agenda. Accept responsibility for your leadership assets. Don’t abdicate your responsibility to others in a support role.

u Establish a line item for training and leadership development in your budget. If you must, start small, and enhance the budget every year.

u Work with your management team to develop targeted goals and priorities for training and leadership development. Assure that development activity aligns to company goals and customer requirements.

Establish early wins and successes
Next, establish small wins that align activities and help everyone participate in the new direction and investments.
u Audit the education, training and conference attendance reimbursed over the past two years. Ask how the people have benefited, applied what they’ve learned and how its served your customers.

u Pull department managers into the same room and ask them what they do to support the dynamic learning needs of their staff. Ask them what changes need to be made, and what you do that gets in the way.

u Ask other area companies what they have found to be valuable resources and reasonable investments. Seek out resources that are cost-effective and proven.

Seek lasting success and legacy
Seek lasting success and legacy. Aside from investing and developing the talent you already have in your company, realize that changes must occur in who and how you hire managers and executives. Our best employees do not always make the best managers.

u Clearly define the expectations you have
for managers and those leading staff teams. Their success depends on how clear you are about expectation of
leaders.

u Establish a new set of interview questions for those with managerial aspirations. Don’t ask about their technical experiences, but their management and leadership capabilities.

u Clarify the outcomes you expect for management. What does success look like? What is non-negotiable? What are you willing to nurture? If things are not working, help managers leave their roles with grace and compassion.

Dan Loichinger is a certified management consultant and managing partner of Madison-based Loichinger Advantage LLC, www.loichingeradvantage.com.

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