As August comes to an end, many of you are probably in the process of developing or finalizing your budget for 2012. There are the usual line items to complete: transportation costs, technology and capital investments, staffing levels and associated costs, and so on. But there is one line item that is likely missing from your budget: investment in leadership development and education.
Almost 52 percent of the supply chain executives I surveyed earlier this year do not include leadership development and education as a separate line item in their budgets; instead, it falls under discretionary spending or some other general category.
The survey also revealed a gap between the dollar amount supply chain executives would ideally allocate towards leadership development and education versus the amount their employers currently allocate or reimburse. Almost 78 percent of the executives surveyed would allocate more than $3,000 annually per executive, while only 37 percent of their employers currently allocate or reimburse that amount. More surprising, almost a quarter of the employers (23.7 percent) allocate or reimburse less than $500 annually per executive for leadership development and education.
To put this amount in perspective, the registration fee to attend the upcoming CSCMP Annual Global Conference is $1,645 for members and $2,240 for non-members, so $500 doesn’t get you very much these days.
What’s causing this “underfunding” and is it a problem?
There are many causes, but the most common one is that compared to other investments, quantifying the ROI of leadership development and education is not easy or straightforward. Therefore, when companies look to cut costs, especially during difficult economic times, training and education, across all levels of the organization, are among the first items to get the ax.
The challenge is to connect the dots between investments in leadership development and education (LD&E) to tangible outcomes the CFO and CEO can understand — i.e., items on your company’s P&L and balance sheet. One way to connect the dots is to align the focus of your LD&E investments with your strategic initiatives and projects for the coming year. For example, if your company plans to outsource part or all of its logistics operations for the first time next year, with the goal of reducing logistics costs and/or improving service levels, you can easily justify taking a course on “Vested Outsourcing” or attending a conference focused on outsourcing trends and leading practices.
And yes, this “underfunding” is a problem because, to quote leadership expert Kenneth Blanchard, “when you stop learning, you stop leading.” The link between learning and leadership is stronger today than it was 5 or 10 years ago because the process of continuous learning — of asking questions and seeking answers — sparks creativity and innovation, and it opens the door to finding new and better ways of solving problems and capturing opportunities.
And because we live in a rapidly changing world, this learning process is even more important today. New technologies, business models, competitors, legislation, economic issues, and so on are constantly emerging, which means yesterday’s leading practices might no longer apply and new ones have to be developed and implemented.
So, to paraphrase Blanchard’s quote, in order to remain effective leaders, supply chain and logistics professionals must continue to learn.
But although getting sufficient budget for leadership development and education is a hurdle, it’s not the only one, nor the biggest one. According to the survey respondents, lack of time is the biggest challenge executives face in this area. Who has the time to invest in learning when you already spend long days in planning meetings, addressing all sorts of operational issues, visiting suppliers and clients, responding to countless emails, and so on?
Here’s my observation: Those who invest in learning don’t find the time to do it — they make the time…by making it a priority and eliminating time-killing, non-value-added behavior and activities from their daily schedules.
I have more to say on this topic, but I’ll save it for future postings. In the meantime, what do you think? Is leadership development and education in your budget for next year? How much are you allocating and is it enough? Do you agree that lack of time is a bigger issue than budget constraints? If so, how do you make the time?
Post a comment and share your viewpoint!