When asked to discuss the parameters managers use to assess their own and their department’s performance, the term ROI is often mentioned.
While the returns on investment are critical to the success of any department, there is another measurement we sometimes fail to take into consideration.
Yet it is one facet of our business that, if overlooked, can have a far-reaching effect on the results we achieve and the potential for future growth.
Talented employees are the catalyst for change in your organisation.
Many managers will highlight past performance to identify high-performing employees.
But exactly how many really talented employees are being overlooked by continuing to look in the rear-view mirror?
Talented employees are distributed all through an organisation, from the boardroom to the tearoom.
But we often lose these people, either physically or mentally, because we don’t tap into the measurement called Return on Talent
This return is calculated by dividing the knowledge generated and applied in the business by individuals, by the investment that’s made in their development.
Knowledge is only one component of talented employees, of course.
It’s the overall application of that knowledge through idea-generation and its rollout that will make the real difference.
If a person has great knowledge and ideas, yet never has them implemented, the value of those ideas is zero.
It only becomes valuable if it’s applied.
Knowledge is only valuable when it’s harnessed and applied.
Success in your organisation depends on the application and mastery of the talent you have available.
If you develop a creative workforce or team, build innovative processes, adopt continual improvement procedures, improve your communication methods and build opportunities for advancement, you start creating a culture of improvement and tapping into the potential of employees who have the talent to drive productivity forward.
But you also need a way to harness the knowledge that people have and bring to the organisation.
What ways can you make this a reality with your team?
Here are three ways you can start measuring your Return on Talent:
1) Create a team who are responsible for developing talent
Please don’t just leave this to HR and expect them to run with it.
Your knowledge of what works within your department and how it can be applied is much deeper than HR have the capability of developing.
The team dynamics have to be right and you need people who are able to harness the knowledge and the ideas people have so they’re not wasted or drift off into the ether.
2) Develop a means of measuring the return on talent
You need to create coaching and mentoring sessions that develop people’s knowledge and determine the costs involved.
This entails determining the best way to coach and mentor people within the confines of the systems you work in.
You could, for example, decide to coach each person in your team for one hour each month.
In a team of five people, that’s five hours of your time monthly.
The costs incurred are easily monitored.
Establish a process where you can receive and categorise the knowledge that people have and share.
Any knowledge management system has to work efficiently and productively.
When you have a receptacle you can download shared knowledge into (your intranet may well be a suitable medium) then you can start utilising it to store people’s creativity and innovative ideas.
3) Put in a process to increase the ROT figures
How do you approach a situation where you want to start increasing return on talent?
Start one person at a time, function by function.
You need to assess who is actually producing the most value in your team.
This is done by talent diagnosis.
It may take you some time to determine the value each of your team is producing, but it is worth the effort.
Start by establishing what the main constituents are that create a talented individual in your team.
Then decide how that talent can be harnessed and utilised, through knowledge assessment.
Get people to share ideas on how things could be improved.
As you know, they are the people doing the work, so they are closest to coming up with the ideas on how things could be improved.
Observe how much time needs to be invested in developing the skillsets required and the knowledge shared.
When you have this information, it’s possible to gather the figures and apply them to a return on talent equation, which is simply the knowledge that’s generated and applied, divided by the investment you have made in developing that knowledge (money, time and effort).
Knowledge is one of the most important factors you can develop for business success.
If you can increase knowledge, then other related factors like production and sales, customer acquisition and profitability will also see improvements.
To sustain sales growth, you should concentrate on developing the return on talent, and you’ll see the correlation between the value of the knowledge you can develop and the end results you achieve.