Nearly 20 years ago, I read a book by Robert Kiyosaki called Rich Dad, Poor Dad and the follow up called Cashflow Quadrant. In the years since, I’ve heard a number of people question whether those books were really based on Kiyosaki’s actual life or if he just made up the content to sell books. Quite honestly, I’ve never cared. I learned from both so it made no difference at all to me whether they were truly based on his childhood or it was only a fable… One of the key points I still think about to this day is how he explained the difference between an investment and an expense. He said that for most people, their home is one of the biggest investments they ever make. The challenge with that lies in his definition: an investment MAKES you money and an expense COSTS you money. The only way my home will ever be an investment, according to that definition, is if I were to sell it for more than I have in it. Not just more than I paid for it; more than the cumulative total I have in it at the time of the sale. That would include interest on the loan, ongoing upkeep, taxes, any improvements, etc. While real-estate investments can certainly be profitable, the home we each live in rarely fits his description. Our home, by his definition, is a necessary expense that COSTS us money each and every year we live there.
So let’s change gears, keeping this definition in mind, and consider the COST companies incur by training and developing their people. Depending on the material, or even who is providing the training, this COST can be significant. And in most cases, business owners and managers view this COST simply as a necessary part of doing business. But is that really the case? Is training and development a COST of doing business?
I’ve heard many managers grudgingly refer to things like safety training as something they do because OSHA requires them to. Not so long ago, I wrote an article for a few of the boards I serve on that addressed the actual COSTS related to various types of injuries. Having worked in safety for nearly 15 years, I can make a strong argument stating that injuries have a much greater price tag than any effective safety training ever could…
What I want you to consider right now is whether training, for yourself or for the people you lead, is a necessary COST of doing business or if it’s an INVESTMENT in the future of your business? Looking at this solely from Kiyosaki’s perspective, if you have no reason to believe a specific training session can help you generate more revenue, or at a minimum avoid spending more elsewhere than you’re paying for the training, then it is indeed an expense. And if that’s your final answer, I would sincerely question why you’re even considering that particular training! But if you can point to a specific issue you’re addressing with the training, and how it will be applied moving forward to increase your company’s overall revenue, then it meets his definition of an INVESTMENT!
I couldn’t begin to put a number on what I’ve personally invested in my own growth & development over the last 20 years. I do know that it’s been at least $50k in just the last 3… And I also know, without any doubt whatsoever, that it’s providing a higher return than anything else I could have done with that same money…
One of the biggest concerns I hear from managers and business owners while discussing this topic is what to do if they put time and money into training and developing their people, and those same people leave for a better job… I’ll address that in another message!
Keep an eye out for my message on how making the right INVESTMENT in your training and development initiative also helps with recruiting the right kind of people to your team and how it helps you keep the great people that are already with you.