Cameron Herold argues that companies must invest proactively in employee and leadership skill development or risk stalling growth. He shares personal examples (1-800-GOT-JUNK) and industry anecdotes to recommend budgeting per-person training (e.g., $2,000/employee or 10% of salary for leaders) and running continuous development programs to enable scaling.
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This kind of blew me away. I did a post on Facebook and LinkedIn about 2 weeks ago just to get some feedback from, you know, different CEOs and COOs. And I was thinking about, you know, growing our people. And I asked what companies have as a training budget for investing in their leaders, investing in their managers and leadership team skills. And basically I was curious as to what your budget on a per person basis was either across the organization or, you know, even just for your managers or leadership team directly. How much money do you spend on growing their skills on a yearly basis? And what I was really astounded was I got almost no response, like, some of the least responses I've ever seen, which is scary because in all of the companies that I've built over the years, whether it was 1-800-got-JUNK or ubardu.com or Gerber Auto Collision Void Auto Body College Pro Painters, we were obsessed with, about growing the skills of our people. And that was the only way we grew the company. So as an example, at 1,800, got junk, we had $2,000 per person budgeted on an annual basis to invest in their skill development. Whether it was courses in time management, if they wanted to go to a Tony Robbins session, if they wanted to have coaching or mentoring, if they were going to go away to a course or take a course online or read books, whatever. We allocated $2,000 per person, and I think that was actually quite cheap at the leadership team level. We allocated 10% of the person's annual salary to growing their skills. So when I was the second in command at 1-800-got junk, I left there 14 years ago, my salary was 306,000, and I had a $30,000 annual training budget just to grow my skills. So to invest in a coach, to invest in being in a mastermind, to attend conferences. And really that was because we believed that the more we grew the skills of our people, the more they'd grow our company. So I was really kind of shocked that I had such a low response from, from CEOs and COOs. And I think it was because probably most of us have never sat down to think about how much money are we willing to spend. So I was talking to a friend about this, and he said, you know, well, if I invest in growing my manager's skills and I really spend, you know, 10%, let's say they earn $200,000 a year, and I'm going to invest $20,000 a year in growing them, what if they leave the company? And I said, yeah, but if you don't invest in them, what if they stay? Right? So it's that old saying of if you've got a bunch of managers in your company, you're not growing them, but the company is growing. How are they possibly going to be able to continue to grow that company for you? So it's really a worthwhile exercise for you and your leadership team to sit down and think about how much money are you willing to spend on growing your manager skills? And, you know, where will you let them spend that money? So years ago I was coaching a company and the CEO Chip had no cap on his training program, so he actually spent about $2 million one year. He was approaching $50 million in revenue. He spent $2 million on growing his leadership team. He sent 14 people to Tony Robbins. He had his COO in the CO alliance, he was getting coaching. He sent eight people to a scaling up conference. He was constantly investing and growing his people and the company just continued to accelerate. So. So I really think it's a worthwhile exercise for all of you to sit down and think about what are you prepared to spend to grow your people. So as an example, the invest in your leaders course is only $647 per person. So if you were to to sign up, let's say six of your people for 647, that's what, $4,000? Not even a year for six people to grow their skills. And then all of a sudden you're growing their skills on situational leadership, coaching, delegation, time management, project management, conflict management, on one on one meetings and running effective meetings and interviewing. And the reality is that if you don't invest in growing your people, they're not going to be able to stay with you as you scale the company. You know, you think about all the different people who you have working with you inside of your organization. If your company doubles two years from now, all of those managers, if they have not increased their skills, they're not going to be able to stay with you in the company. So you have to grow the people, otherwise they're going to be out of a job. You know, I was speaking years ago with Clayton Mask, who was the CEO of infusionsoft, and he and I were at an event together and he said that as soon as your company has gone through two successive doubles in size, the managers are going to be out of a job unless they've really grown their skills, because they won't be able to grow a company that is twice the size two times. So as an Example, let's say Your company is $5 million in revenue right now. When you go to 10 million, most of the managers can still do their job. When you're at 20 million, most of the managers are really, really struggling, and there's no way they can be running the company at 40. But if you grow the skill set of those people, you know, at 1, 800, got junk. We grew the company six consecutive times of 100% revenue growth. So that means six years in a row, 100% growth, 100% growth, 100% Growth. So when you double the size of the company every year for six consecutive years, we had to be growing our people. But that was why we had that budget in place of, you know, $30,000 for my training. For most of the leadership team, we had training budgets like that in place. And then for every employee, the $2,000 per year. So we would even let employees just select courses on their own. They could come to us and say they wanted to attend a course or, you know, buy some videos online or attend a mastermind group. And we almost always said yes to that because we didn't even matter what they were learning. It was that they were engaged in learning that allowed them to continue to scale. So really think about inside of your organization today. What's your budget going to be? How are you going to make sure that you're growing your people? How are you going to make sure that your managers and VPs are growing the people below them as well? So strongly encourage you all to take a look at the invest in your leaders course. But more importantly, really think about internally in your company. What's your plan and what's your budget for investing in your leaders and growing their skills? Because if you don't grow their skills, your company is going to stall. And if you do grow their skills, they'll be able to scale the company for you. So again, don't worry about what happens if they leave your company with all those new skills. I would be more concerned with what happens if they're running your company without the skills to really be able to scale it.
