ROI - Return on Individual

Companies can identify the cost of training but the resultant improvement in performance is often difficult to equate directly to the training.

Although there may be differences in approach between businesses in the East and the West, the underlying strategic development of all contenders is similar and based on the same principles.

Definition
The two main recognizable elements in the management of leading organizations around the world are Hoshin Planning and Total Quality. Hoshin Planning determines the strategy and what is to be achieved in terms of improvement to business results. Total Quality provides the means by which this can be achieved. The former, together with the associated strategic development of the organization, is no use without the latter, and the latter lacks focus and direction without the former.

The term Total Quality is used generically to describe this style and approach to management. However, many organizations prefer to personalize such initiatives, basing them on corporate principles and focusing on what they perceive to be the most important issues. For example, Motorola named its programme Six Sigma, in recognition of Toyota’s success in the virtual elimination of variability from all its processes. The tide stands for six standard deviations from the process mean, which corresponds to about three defects in a million chances. This target applies to all activities including office operations. Other Total Quality names include Supply Chain Initiative, Leading Edge; and Today not Tomorrow (TNT).

Education and training
Compared with leading Asian and Western countries, India has a reputation for spending far too little on the education and training of its employees. One possible reason for this is the difficulty in evaluating the return on investment (or should it read return on individual?). Companies can identify the cost of training but the resultant improvement in performance is often difficult to equate directly to the training. Fortunately, in the case of quality related education and training this may not be the case. For example, Punjab Tractors spent Rs 40 lakh in three years solely on Juran on Quality Improvement training for its employees in the early 90s. In the same period it was able to show a saving in excess of Rs 10 crore.

Many organizations make the mistake of thinking that the introduction of a Total Quality programme requires a bottom up approach. Examples abound. The effort appears delegable. However, successful programmes almost always have a high profile and are often led by the chief executive. For example, Bob Galvin, now retired as the CEO of Motorola, led from the front and is now one of the most respected exponents of the concept in the US.

Principles
The management principles, which underpin leading companies around the world can be summarized as follows:

• All successful programmes are led from the top. It is only from the top that you can see where you are compared to the competition.
• Hoshin  Planning is developed at the top and deployed down through all levels of management.
• Each division, department, section and team set their own targets and goals within the scope of the overall plan.
• There is clear feedback of performance results from all levels of the organization on a weekly; monthly and half yearly basis culminating in an annual audit and review by the top team.
• All levels are trained on the Project-by-Project improvement process including the problem solving tools.
• The workforce is developed towards full autonomous self management supported by line management and the specialist departments.
• Employees have the opportunity to continuously develop their range of skills and competencies. Multi skilling is usually referred to as horizontal promotion.

Education and training are the backbone of all programmes training in the relevant skills, education about the company; its markets and the competition. Typically; organizations devote around 2 percent of their budget to the development of human resources. In some cases the proportion may be higher, particularly in the case of Project- by- Project improvement training, which if properly planned, should be a profit centre, the biggest profit center- offering opportunities that deliver 1000 percent on investment!