As more start-ups and small- to mid-sized companies start new training divisions, I’m seeing a practice that could have negative long-term implications: a narrowly focused training department.
In each of these three types of companies, it’s common to have a single division that produces a majority (up to 100%) of the revenue, with all other divisions essentially supporting the revenue source. This is especially true in retail and e-commerce.
So a natural, and correct, starting place when forming a new training division is to focus all the division’s efforts on this revenue center. I say ‘correct’ because it’s generally best to focus training efforts in the area that will yield the most gain.
The trap to be wary of, however, is to focus solely on the revenue-producing division over a long period of time. While that division will continuously improve, the resulting imbalance when compared to the other less-trained divisions in the company can have significant negative impacts.
Some effects could be:
- Changes in turnover and retention – As employees are developed in the revenue-producing division, their turnover will naturally decrease. However, in the other divisions, the lack of robust training will begin to increase turnover and naturally lead to a poorer level of service to the revenue-producing division. As the gap widens over time, the effect will become more pronounced.
- Communication problems – I’m not talking about training on communication here. I’m addressing problems that will arise when the focus is wrongly out of balance. A well-trained division speaks a common language, has deep shared experiences, and develops a sub-culture of its own based on a solid foundation. Meanwhile, the neglected divisions will lack this “flow”. This causes breakdowns in the ability to communicate effectively or develop a common frame of reference. Inter-department communication will especially breakdown.
- Declining support – As the skill gap widens and turnover increases in the less-trained divisions, their ability to provide support will decrease. Here is the key – as their support function decreases, this will begin to significantly affect the revenue-producing team, negating some of the positive effects of investing in their training.
- Fractured procedures – With declining support will come the fracturing of established procedures and protocols. This occurs as the revenue-producing team tries to make-up for the lack of support they receive and is especially pronounced in companies with multiple locations.
For example: Location A isn’t receiving proper billing support from Accounts Receivable (due to the errors AR keeps making) so they create their own reminder system to ensure revenues still come in on time.
Location B has the same problem, but they create a different system that changes how they file receivables with AR.
Locations C does something entirely different from A and B.
See how this could cause problems? Now replicate that issue across multiple less-trained divisions and you can imagine how it would corrupt the revenue-producing team.
A strong culture and good hiring practices can shore-up the lack of training in the non-focus divisions, but only for a time. Eventually, these effects will worm their way into the organization.
So how do you avoid this? Let me bypass the quick answer here that would say “train everyone equally.” First, that’s a cop-out, and second, it’s wrong. You shouldn’t train everyone equally. Like I said in the beginning, train for the biggest impact. But there is a subtle sneakiness about impact that requires a close eye, lest you look up one day and realize you’ve lost a significant number of employees due to a lack of development.
The better option is to ensure your training team, from the beginning, is focusing appropriately across the entire company. This may mean 80% of their effort is devoted to the revenue-producing team and 20% is devoted to the other teams. While those percentages are not a hard rule, the concept is sound. The key is to ensure development for each division so they all grow, without failing to put the majority of your effort into the revenue-producing team.