Richard Tyson
Success in business is largely about understanding cause and effect. Everyone wants strong financial results, but you must realize that such outcomes are a function of the value you deliver to your customers. A strong and continuous delivery of highly valuable customer experiences with your products and/or services causes the financial effect that you desire. In the parlance of business metrics, outstanding customer value is the leading indicator that delivers the lagging indicator of superior financial performance.
Of course, the story doesn’t end there. We must ask ourselves{mprestriction ids="1,3"}, “What causes highly valuable customer experiences?”
The answer lies within the day-to-day operations of your business. That includes the products and/or services you sell, as well as all of the additional touch points where you and your people interact with your customers. The effectiveness and efficiency of these operational processes are the cause that delivers the customer effects that ultimately lead to desirable financial outcomes.
We’re peeling an important strategic onion here, so let’s keep going. The question now is, “What causes highly effective and efficient operations in your business?”
Virtually always, the answer is your people. I acknowledge that AI is posing some interesting new wrinkles these days, but I still maintain that you and your team are the primary creators of desired operational outcomes. People cause operational effect — both good and bad.
At my company, CEObuilder, we have noted over the past 33 years that people who deliver outstanding operational outcomes have two very observable traits: 1. They are highly competent at their roles in the operations of their company, and 2. They are highly engaged in both their role and in the purpose and culture of the enterprise. Thus, we have discerned that organizations with exceedingly competent and engaged employees are the cause that delivers the operational effects leading to strong customer and financial outcomes.
It is essential for every business leader to understand this necessary alignment of causes and effects. That said, this understanding is just a starting point. Depending on the specific needs of your company, your focus may necessarily be on any of the key segments: financial, customer, operations or the engagement and competency of your people. Further addressing any of these elements inevitably involves more onion-peeling.
In that regard, let’s consider the pursuit of outstanding employee competency. The size of the global corporate training market was estimated at $306 billion in 2022, $329 billion in 2023 and is projected to grow at a compound annual growth rate of 8.5 percent to reach $587 billion by 2030 — over a half a trillion dollars each year and growing.
Every business that plans on succeeding will necessarily have to make its own investments in the competencies of its teams. The rapidity of new technological advancements adds urgency for employees to continuously update their skills. In recruiting new employees, many of our clients have found it difficult to find candidates with the skills and qualifications they need, thus requiring them to dedicate even more onboarding time to develop the competencies required. Further complicating this challenge, today’s workforce often consists of multiple generations with different skills, preferences and work styles.
Adult learners also bring a pervasive challenge for competency trainers. Far too often, training programs fail to deliver highly competent people to mission-critical jobs. They complete required training without fully understanding all of the key aspects of their jobs.
How does this happen? Our observation is that most adults have an inherent fear of admitting that they don’t fully get what their training was supposed to deliver: full competency to do their appointed job. That unspoken vulnerability undermines both their competence and their confidence. When this happens, the return on investment in training evaporates into competency gaps and management frustration.
To address this problem, it is critical that your competency training emphasizes psychological safety and open communication and provides a supportive learning environment. You should strive to create a culture where employees feel comfortable asking questions, seeking help and admitting areas of weakness. Managers and leaders play a crucial role in creating this environment by modeling vulnerability, providing constructive feedback and encouraging a growth mindset.
In this regard, your investment in the competencies of your people will contribute to strong operational, customer and financial outcomes. Those dollars create the cause that most substantially contributes to the effects you desire in your enterprise.
Richard Tyson is the founder, principal owner and president of CEObuilder, which provides forums for consulting and coaching to executives in small businesses.{/mprestriction}
