Training managers to stay

By MARK STORY

Close your eyes, put your hand on your heart and list the future leaders within your organisation. If you struggle to come up with any names, relax - you're not alone.

Faced with this grim reality two years ago, diversified engineering group, Tyco Flow Control was forced to up the ante on its executive training. The company had an excellent staff retention rate, but rapid expansion came at a price.

Unable to cope with the rate of company growth some good staff jumped ship, recalls general manager Stuart Baird.

"Having achieved 39 per cent organic growth last year alone, the company simply ran out of human capital needed to progress the business further," says Baird.

While Tyco offered no shortage of technical training, the company was found wanting in middle management leadership. Disappointed by the calibre of talent in the marketplace, Baird decided to groom future leaders from within.

That meant identifying 10 people deemed to have 'high potential' and equipping them with a broader range of competencies.

Baird hooked up with Manukau Institute of Technology to develop a tailor-made programme and MIT lecturers developed an eight-module management development programme in just over a week.

Fashioned around the organisation's culture and its key performance drivers, programme content is focused on softer skills, such as leadership in a changing environment.

Looking above the functional activities, course content is also helping future leaders to focus on strategic elements, such as operational excellence, HR and marketing contribution to the bottom line, and how an organisation's culture drives competitive advantage.

While only into their third module, Baird claims the training is already paying off. An opportunity to exit one of its Christchurch leases (where the company operates five businesses) spelled potential savings. But knowing the competitive nature of disparate business units, Baird wasn't holding his breath.

He was surprised by the willingness of branch managers to merge businesses and share common facilities without head office intervention. Had the managers not attended the programme, Baird doubts this outcome would have been possible.

"What made the difference was their understanding of the bigger financial picture and the camaraderie they developed. They also realised merging divisions would deliver lower costs while providing greater space for all," says Baird.

To Andrew Gordon, one of Baird's future leaders, the $60,000 invested in the management development programme is a bonus.

He and fellow future leaders can refresh their CVs and develop skills while the company gets better performance and improved succession management.

"The firm's willingness to invest in our future development has increased loyalty," says Gordon, a Christchurch branch manager. "But the biggest thing it has done is link all aspects of the group's divisions. It's given us more global insight into how the company works."

Research suggests Baird's training efforts should drive better staff retention. Underlying sentiment from the 14,000 employees responding to last year's Unlimited Best Places to Work Survey suggests companies that train are more likely to retain staff.

HR manager Kim Ahern says with today's tight labour market, training is a valuable weapon in the war to retain key talent.

Had her employer Roche Products not supported her request to retrain, Ahern admits she probably would have found another employer. She believes enhanced loyalty is a by-product of the trust the firm places in her to provide a return on the money it's investing to develop her talents.

Ahern's migration to HR manager evolved when former PA roles to CEOs led her to handle HR activities. After four-and-a-half years as Roche's HR manager she sought to put a framework around her experience by completing a post graduate diploma.

"My job is to constantly keep abreast with the changes impacting this organisation," says Ahern.

She saw additional training as an opportunity to stay in touch with best practice HR management thinking and obtain more of theory behind what she's doing. Ahern also realised that if she was going to aspire to company director status a post graduate qualification was an implied requirement. But she's witnessing a notable sea-change in the training stakes.

She believes the days of execs accumulating post-graduate qualifications because they're the done thing are long gone.

To Ahern the payback today is what training does to develop the softer skills - or more leadership and people handling skills - within the company's human capital.

"Firms that assessed someone's ability to do a task through their qualifications are only looking at half the picture. What they often neglect to ask is whether the individual can handle people."

What's also made firms take softer skill development more seriously, says Ahern was changes to employment legislation. She's convinced the Employment Relations Act has forced employers to equip managers with the skills needed to act in good faith. Having concluded that they're stuck with employees, she says employers see staff development as an investment.

Private training provider David Glover says generic softer skill development - such as leadership, emotional intelligence, negotiating and values-based management - have become the hot space within the executive training market.

"In the 1990s companies went through a series of business shocks, now they're encountering cultural shocks," says Glover who runs David Forman and Associates. "What's giving 'people-skills' greater prominence is the need to manage growth plus changing workplace and business dynamics. If people thought the skills they learned at uni 20 years ago will carry them through - they'd be wrong."

According to IBM's study, Your Turn, global firms recognise that an investment in people skills will help deliver their primary objective - revenue growth. But the people-skills issue most impacting on organisations, so the study says, is lack of qualified candidates.