An Exercise for the CEO


While talking with a CEO this past week, I asked her if the training department was at least returning on the money spent this past year.  She laughed a bit, and said, “I really don’t know.”  So I said, let’s try an exercise.  Tally up the amount spent on training year to date, and ask the person in charge of training to explain how it was spent and what was the return the company got on the return.

This is a small credit union, and we are talking about less than $200,000, and yet I am told this exercise has sent a wave of panic through the Human Resource function.  It would seem that the very thought that a department should have to justify their expenses to the CEO was unheard of.  The CEO is waiting for an answer, and she told me she is now expecting the worst.

If this training function was working off an actual training plan, in less than a day they should be able to provide their CEO a rough idea of what has been accomplished and what is being worked on.  They could show why each project, course or action was implemented, and the connection to the business plan of the credit union.

My guess is that we are going to get a laundry list of things they have done, and when the CEO compares it to the money spent, the return on the investment will be lower than assumed.  I say assumed rather than expected, because no one has been monitoring this function.

I will check in on Friday, and let you know the results in next week’s blog.  I plan to either compliment them on a job well done, or recommend a training physical ASAP!    In today’s economy, there is zero reason for any department to get money without being able to justify the return.

My hope is that every CEO reading this blog does this same exercise to their training department if they don’t already know what this budget line is accomplishing!  And if you are wondering if you have the right to know this detail, ask yourself what the CEO of Bank of American is saying about return on investment.  With an announcement today of 30,000 employees being let go, would it not be good to know if you are keeping the productive ones?

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