I have recently been working my way through a very interesting book by Ben Horowitz called The Hard Thing About Hard Things. It is a very interesting perspective on founding, buying, selling, running, and investing in technology companies. The book is not really steeped in a lot of sound leadership theory, but is more about his own practical wisdom in working and leading in the technology space.
One of the things that caught my eye was in a small section he wrote about employee retention. According to Ben, during his tenure at one of the tech companies he founded he decided to read all of the exit interviews for the entire company. He was amazed at the amount of money they were spending on talent recruiting, hiring, and on-boarding only to see this open drain on the back end of the company. It seemed they were losing people as fast as they could hire them.
According to Horowitz, when you put the economics aside (I assume he means people who say they are leaving for higher paying jobs that his organization couldn’t compete with) there were two primary reasons why people left:
They hated their direct manager. They often cited things like:
Lack of guidance
No career development
Feedback they received
They were not learning anything.
He then goes on to make a case for the importance of training new employees to resolve some of these turnover issues.
Insert Coaching Here
While I am all for making sure that all employees get adequate training in their role, my experience is that training is just not enough. You can’t simply send employees to a training program and expect that your turnover numbers are going to go down.
Horowitz quotes Andy Grove, the legendary CEO at Intel, who makes the economic case for training by saying that if a manager did a series of 4 lectures for their department, assuming 3 hours of prep for each hour of material, that is 12 hours of work in total. Say you have a department of 10 folks and next year they will work about 20,000 hours for the organization. If you get a 1 percent improvement in performance, the company gains about 200 hours of work as a result. It is easy to see the ROI by inserting a salary for the department and subtracting the managers salary-time.
I would like to take Grove’s ROI calculation one step further and insert coaching after the completion of training.
Let’s assume that a manager then does two one-one one meetings each month with each of the employees on the team. Half of the time for these meetings is dedicated to coaching the employees after the training.
The manager has had plenty of time to observe the employees, evaluating their use of the training delivered. The manager can now use the observed behaviors to coach any little improvements that will help the employee become more productive.
Let’s assume that this manager is really not that good of a coach, but is able to eke out another 1% of productivity from each of the employees as a result of the coaching. This becomes another 12 hours of work on the part of the manager (2hrs/month/employee + 10 minutes of prep on what coaching is needed). Now another 200 hours of work improvement has just occurred as a result.
Now we see that 4 hours of training (a one hour training session per quarter) and one hour of dedicated coaching to the training results in a net increase in 400 hours of productivity for the organization!
No Time for Training or Coaching
I had a client tell me one time that he just really didn’t have time to train or do one on one meetings with his team. The team had way too many tasks and priorities to take a break from their work to do any of this kind of development.
The interesting thing to me was that I was hired as an executive coach to work with this person because the turnover rate in his organization was so high that those who were left were forced to take on the projects of the folks who were exiting.
This manager was symptomatically trying to solve his productivity issues by moving projects around on some kind of organizational chess board.
Instead of making the investment in the people to reduce the turn-over rate, the manager just wanted the folks who were left to work longer and harder.
When I did an interview 360 and talked to this manager’s peers and the folks on his team, he was not very well liked or respected. One person I interviewed told me the manager was often quoted as stating “The workload will stay high until the teams performance improves.”
There was no coaching, no positive feedback, and no feeling of being developed.
My job as this manager’s coach was to help him see that his unwillingness to invest in coaching the team was the productivity drag on the department.
How about you?
Do you have 1 hour per quarter to provide a training for your team and 3 hours of follow-up after the training to get a 400% increase in your team’s productivity?
Or does your team have so much to do that there is no time for training and coaching?
Stay tuned for next week’s post where I am going to take on the topic of Good Coach/Bad Coach. I think this is a really important topic for those of you who buy into the importance of training and coaching and think you are good at it... Just because you do it, does that mean you are skilled?