300% ROI; 3% Solution; Games Buyers Play; Dr. Laurie Bassi

"...keeping you great" 

HEADLINES:

The biggest single predictor of a company's ability to beat its direct competitors in its industry AND the overall stock market was the amount the company spends on training its people.
	Dr. Laurie Bassi, author Good Company

Games Buyers Play -- the latest "Growth Guy" column highlights pitfalls in selling a business - and the tricks buyers use to drive down the price. I actually met a couple professors who teach acquirers how to do this to unsuspecting entrepreneurs. Seller beware!

3%, Use it or Lose It -- Patrick McGovern, the famed Chairman and Founder of International Data Group (IDG), was the first celebrity CEO to keynote the executive program I launched and held at MIT called "The Birthing of Giants." Today, one of the Forbes 400 wealthiest entrepreneurs who recently gave $350 million to MIT for brain research, he impressed me with his three simple rules for growing each division of his company. Scattered all over the planet launching tech publications in a fast charging industry, each leader had to hit three targets, three of every five quarters:

1. Grow twice the rate of the local market - his way to set revenue targets in each country
2. Take 10% net to the bottom line - and spending on growth wasn't an excuse for low profit
3. Spend 3% of payroll on training - use it or lose it

McGovern explained that the only investment critical to growth was employee and management development, yet he knew that under the time pressure of having to grow the business and cost pressures of having to net 10%, the first thing leaders will do in the short run is cut out the time and cost of training. As CEO, like Jack Welch, McGovern knew this was the one issue he had to stand firm about and mandate. The job of the CEO is to make the best decisions today that have a long term positive impact on the business tomorrow.

300% ROI -- and through some of the most exhaustive research ever supported, training and development was found to out-return any other investment a business owner could make - more than any R&D, hard, or capital investment. In fact, companies that made this investment achieved:

24% higher profit margin 218% higher income per employee 86% higher company value 21% increase in productivity 300% reduction in employee turnover a return per dollar invested of $6.72

Here's a link to a white paper Bud Arquilla, CEO of the Gazelles200 initiative, wrote to detail the findings - an investment Jack Welch calculated to provide an infinite return.

Drives Me Nuts -- therefore, if there is one thing that pains me the most, it's when a CEO lets their team steamroll them, complaining about having neither the time nor willingness to budget for training and development.

Dr. Laurie Bassi -- whom I quoted above, is author of Good Company: Business Success in the Worthiness Era; was director of research at Saba Software; director of two US government commissions; and a tenured professor of economics and public policy at Georgetown University. She is also the chair of the board at Bassi Investments - an investment firm that invests in companies with superior human capital management capabilities - consistently outperforming the S&P 500. Previously, she served as vice president for research at ASTD (American Society of Training and Development) where she led a groundbreaking and exhaustive multi-year research initiative that brought hard numbers to the "soft" world of training and development. Book club members are receiving her book and she's keynoting the upcoming Leadership Summit in Orlando May 9 - 10. Make the investment.