March 6th, 2014
A Discussion Between a CEO and a CFO
As the day began to draw to a close, and the sun was beginning to set in the horizon, the CEO and CFO were about to cross paths in the hallway. The CFO always has money on his mind as his world is based upon one simple fact, whether or not the actions that he is about to do will cost the company money or make them money. The CEO however comes from a different perspective. He is more interested if his next action will improve his team or hurt his team.
The topic of the day for the two individuals included whether or not to train the sales staff. “Sure, they could use some training,” the CFO thought to himself, “but that will cost the company money.” He recalls the statistics that he was reminded of earlier … 41 percent of employees at companies with inadequate training programs plan to leave within a year vs. 12 percent of employees at companies that provide excellent training and professional development programs. “Hmmm,” he thought to himself, “that is pretty compelling especially since the cost of replacing a skilled employee ranges from $75,000 to more than $400,000.00!”
He remembers what the consultant told him earlier in the day … “Companies in the top 25 percent of training expenditure per employee per year ($1,500.00 or more), average 24 percent higher profit margins than companies that spend less. We sure could use that additional margin,” he reasoned to himself.
His thoughts took him to the last CFO roundtable which he was involved. He met someone from Motorola and got into an interesting side discussion with him. His eyes widened as he recalled the return on investment that they talk about at Motorola. Motorola estimates that every dollar that they spend on training yields them $30 in productivity gains within three years,
“But what about my measurable return on investment (ROI),” he asked himself, already knowing the answer. “Three things will happen,” he reminded himself:
1. There will be additional revenue generated.
2. Productivity/performance improvement will occur.
3. Cost reduction is guaranteed.
“But this is the way we have always done things,” he justified to himself. “We are fine”, he concluded as the CEO approached him. Needing a quick way to diffuse the argument that was about to erupt, the CFO barked at the CEO: “What happens if we train them and they leave us?” A smile slid across his face as he rested his case as he saved the best argument for last. He reasoned to the CEO that they would invest this money in the sales team and then the team would leave and cost the company significant money. As he was basking in his temporary glory, the CEO quickly replied back to him: “What happens if we don’t train them and they stay?”
Consider the above true statistics before you say no to sales training, sales management or employee development. I have never met anyone that had wised that they had less training!