Training vs Leadership: Which Has the Most Influence on Performance?

leadership-in-call-centerAs long as humans have organized themselves into teams that strive toward common goals, there has raged a debate: is it training that drives performance, or is leadership the primary driver of results?

While you can't make it very far without well-trained associates — especially in a call center environment— once the training period has ended and your new associates begin to work independently, what motivates them to stay on and continue to produce at a high level? What prevents them from burning out? How are they inspired?

Leadership is the difference. You can see it in the bottom line.

According to a 2007 study published in the Harvard Business Review, companies that invest heavily in leadership development showed stock performances that were, on average, five times better than competing firms that spend less on human capital. According to the study's authors, Laurie Bassi and Daniel McMurrer, "most traditional HR metrics—such as employee turnover rate, average time to fill open positions, and total hours of training provided—don’t predict organizational performance."

For the customer service industry and particularly for call centers, in which the average annual turnover rate is somewhere between 30 to 60 percent (depending on the type of call center), that's a tremendously important finding.

Instead, Bassi and McMurrer found that the factors driving profits, "fall into five major categories: leadership practices, employee engagement, knowledge accessibility, workforce optimization and organizational learning capacity."

You'll note that none of those says anything about the quality or quantity of "training" rendered to employees. The researchers essentially found that an organization only performs as well as its leaders allow it to perform.

It is up to managers to promote employee engagement and provide learning tools. It is up to leaders to increase the organizational learning capacity by hiring smarter and providing ample time for continuing education. And it is up to leadership within an organization to inspire employees to take advantage of those opportunities. In short, leadership drives associate performance, which in turn drives profits.

How do good leaders drive performance?

It can be a tricky balance. The key, according to a 2008 study published by Bersin & Associates, is in remembering “that leadership development is not just about developing leaders– it is about creating a culture of performance.”

A company that does not focus on improving its culture and fostering employee engagement is doomed to fail.

Leaders can, in and of themselves, attract better employees and inspire them to remain on board longer. They help their subordinates to learn, grow and advance, thus creating an organic, in-house pipeline for future leaders. They give their employees a sense of hope for things to come. That's why, per Bersin & Associates, "the organizations that are 'built to last’ have strong histories of leadership development.”

Conversely, an uninspiring manager and/or a sense that there is no growth potential disenfranchises otherwise high-performing associates. Without hope, these employees have no incentive to produce. If a manager is just going through the motions, so too will employees. Eventually, those bored or disgruntled associates jump ship— but not before taking the morale of their team and, indeed, the entire company down a few notches first.

Many companies are already ramping up their spending on management training and leadership development— and not just for top managers.

It used to be that senior management got the lion's share of companies' attention, at least when it came to spending on additional development. But that seems to be changing now, and companies are seeing profit results.

According to Bersin & Associates, US companies' total spending on leadership development grew by an estimated 14% as recently as 2012. But where "companies traditionally have invested heavily in senior leaders, today senior leaders consume 22 percent of the leadership development. That’s a lower proportion than in prior years, as more money is directed down the leadership chain."

By spreading out the organizational expenditures and concentrating on growing middle-rung managers, performance overall has increased. In fact, organizations that do invest heavily in development are 73% more effective at retaining their employees, from top to bottom.

An increased employee retention rate isn't the only observable benefit. Downturn survivability is enhanced.

In the customer service industry, we are sensitive to downturns in the economy. When GDP falls, people are laid off, sales fall and jobs dry up. Companies are forced to think creatively and be flexible in their staffing to survive. And this, again, is where leadership development — over and above productivity goals and baseline associate training — can be so effective.

An agile, leadership-focused company will be better able to respond in a downturn by incentivizing employees to change jobs, cross-train, or take lower pay over the short term in order to financially stabilize the organization.

"Talent learning programs," Bersin reported, "facilitate such workforce flexibility."

A stable call center is an inspired call center with opportunities for cross-training and advancement.

Baseline call center training can make your associates highly productive. But if a downturn hits and your employees have not been offered cross-training and cannot quickly switch to other tasks, they can become a drag on labor cost. You have to start letting some go. Then, when the downturn is over, you must re-hire and start the training process all over again.

A more agile company could simply reshuffle assignments and pick back up where they left off.

It is up to you to make sure that your call center training program focuses not just on the day-to-day task of answering phones and addressing customers' concerns, but that it also seeks to identify potential leaders early and supports their growth.

By inspiring your people, you incentivize more flexibility, higher productivity and better survivability. And then you'll achieve real success.

Learn how to tackle 21st Century management  issues by downloading our free eBook- Doing The Right Thing: Leadership Defined

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RDI Corporation was founded in 1978 and is headquartered in Blue Ash, Ohio. We provide precise business solutions through a fully integrated outsourcing model and our clients ranged from mid-sized corporations to distinguished Fortune 500 companies.