Matrix management training – the return on investment

I am sometimes (not as often as I should be) asked about the return on investment of our matrix management training.

There are two types of people who ask this question; ones who are genuinely interested and want to know and sceptics who doubt whether training really ever pays off.

In my corporate career I used to have to pitch for our annual training budget and I prepared substantial cost benefit analysis. Training is actually quite well studied and I found reports that showed the impact of introducing the same equipment with and without training and ROI calculations for both technical and soft skills training. I was challenged quite hard on return on investment and always struggled to get the budget I wanted.

One year I stayed around to watch the pitch from my colleague in marketing. He asked for $500 million on the basis that this is what we spent last year! As a matter of interest I researched the return on investment and cost benefit analysis on TV advertising – I could find no studies showing a correlation between advertising spend and sales, except in the case of new product launch. The difference was that the organization believed in advertising and saw training as an expense.

If I take our matrix management training as an example  – we worked with a couple of clients to identify specific actions as a result of the training and monitored their implementation. The typical return on investment over six months was in excess of 700%

We can get some specific deliverables around the cost of cooperation, travel and communication in the program. Here is what it takes to achieve payback

• saving one business trip in the whole of the rest of your career. We give people a whole range of tools for managing without travel
• cancelling a one-hour meeting for 10 people in the whole of the rest of your career. We show people how to save up to 20% of their time by challenging unnecessary meetings and conference calls
• speeding up a moderately important project or decision by one-day in the whole of the rest of your career. We show people how to speed up a matrix and virtual team delivery by 25%.
• improving your ability to engage people so that you stop one person from leaving your company would pay back 100x the cost of the training

As you can see the return on investment on matrix management training is huge. The fact is that people are expensive and training is not – a typical professional employee costs the company approximately $100,000 per year, every year, if you account for all the costs of employment. So even ½% increase in productivity is likely to give you pay back in 12 months.

Matrix management training introduces some different skills, some are even counter-intuitive such as challenging the value of teamwork and cooperation. The matrix can easily lead to much connection and we need to be challenging about where it really adds value.

It’s true that smart managers will often work out some of the techniques themselves. Given  time, but the cost of learning is often high with travel, meetings and other communication and coordination costs being high. What is the ROI of trial and error?

If you are a believer you will be convinced, if not you will probably be thinking “well they would say that wouldn’t they.” Why not check the robustness of your organization’s ROI calculations on advertising, capital investment and IT spend and compare it with the results in training.

We are always keen to conduct ROI analyses with our clients. A thorough Kirkpatrick based analysis of learning outcomes is a significant piece of work but can be worth doing from time to time to ensure that your investment is well-placed.

Find out more about our matrix management training.