Cause And Effect

A rebellious idea, yes I know.
But imagine your employer’s next earnings release.
And it’s only about people.

The growth metrics are all about staff training.

The guidance to the street is all about people development.

Even the long-term investment plan is a commitment to people skills and talent.

There’s not a cost, margin, revenue or depreciation in sight.

This might sound like some sort of utopia, but I spent decades in finance departments preparing analyst statements, reports, accounts and guidance.

I look back now and see that these numbers were only ever about the effect.

And never about the cause.

Imagine a commitment to double-digit revenue growth, as is the standard metric #1. How does a company achieve this?

-> Sell more units (requires sales training)
-> Increase prices (requires negotiation training)
-> Open new markets (requires skills training)
-> Create new products (requires technical training)
-> New leadership (requires mindset mastery training)
-> Acquisition (requires integration training)
-> Productivity (requires leadership training)

Because if a company is to grow double-digit YoY, then the people skills have to increase by the same amount at a minimum.

Now think about that in the context of the scary statistic that 44% of managers (leaders!) have not received any formal training.

Where is the double-digit growth going to come from then?

So back to the earnings release. Imagine the company that makes all the metrics about people.

As a lifelong finance guy, that’s the one I’m backing.

It’s simple cause (people) and effect (financial performance).