You are here ‘Soft Skills’ Drive Bottom-Line Results
Andy Lothian, CEO, Insights Learning and Development
According to today’s business experts, the less tangible qualities of ‘soft skills’ do not make them less important. In a recent article Seth Godin argues the term ‘soft’ makes it easy for “us to move onto something seemingly more urgent.” He suggests we call them ‘real skills’, not ‘soft’.
In fact, ‘soft skills’ have been proven to be tied directly to hard business results. In 2013, a study by Korn Ferry confirmed the “direct relationship between leader self-awareness and organizational financial performance” through an intensive multi-year study. Similarly, a 2010 study found that bullying, “results-at-all-costs’ executives actually diminish the bottom-line.
When real business results are tied to our ‘real skills’, businesses cannot wait to prioritize them for a later day. Here are tips for CEOs who find themselves having to convince their boards about the value of people investment:
1) Gauge opportunity cost
People initiatives are strategic projects, like everything else in your organization. Be prepared to demonstrate not only that there are benefits to launching and maintaining learning and development programs, but that there are costs to not investing in them. I always urge the doubters to consider this: What does the company risk if it doesn’t train its employees, and they stay? Sub-optimal skills have ripple effects. There are all kinds of productivity, morale, and communication benefits your brand might forego if your people don’t get the soft skills they need to achieve hard results.
2) Stay on top of research
There’s a growing body of industry research that demonstratesthe ROI of people development. Citing this information can be a quick way to validate the enterprise-wide pursuit of interpersonal skill enhancement. For instance:
- The Center of Talent Innovation ran a study of 75 companies with 6 million employees in 192 countries, and found that companies with an inclusive culture outperform the competition—capturing 48 percent market share compared to 33 percent.
- A 2015 report by Development Economics, sponsored by McDonalds U.K., published data estimating “soft skills are worth over £88 billion in Gross Value Added to the U.K. economy each year, underpinning around 6.5% of the economy as a whole.”
3) Let data do the talking
Anecdotal arguments can paint powerful stories of transformation, but unless they’re measurable, they will be overlooked. It’s not easy to put a dollar value on morale in Department A, on enhanced teamwork in Department B, or on increased respect and leadership developed in Executive C, but the learning analytic world is growing in importance as an important business resource. When tasked with the strategic investment and allocation of a company’s resources, all boards appreciate when they can employ data-based decision-making. The clearer learning functions can set out what they intend to accomplish with the resources they need, the easier it is for the C-suite to evaluate and respond.
Of all the skills and knowledge we ask our workforce to possess, it is their knowledge and understanding of themselves that actually has the power to impact business results. Indeed, elevating human capital management to the same level of prioritization as financial capital management can get executives the results they want. Author Mike Hawkins said, “Learning no longer stands alone, but rather enables business change as much as it enables human development.”
About the Author
EY Entrepreneur for the Year for Scotland in 2016, CEO Andy Lothian is dedicated to the connection between personal development and business development.
Andy founded Insights Learning and Development with his father, Andi Lothian, more than 20 years ago and has turned a two-man operation into a successful global development company. In his dual roles as Insights’ Chief Executive and Head of People (Human Resources and Talent Development function), Andy is passionately committed to enabling profound people development, whether for the organization’s clients or employees.