Business Strategy plays a major role in most companies, particularly in developed and mature countries. Studies show that a formal strategy can contribute to organisational effectiveness and competitive advantage (Porter, 1980). The United Kingdom has faced in the last few years a somewhat protracted and slow growth, political uncertainty and inefficiencies due to poor management.
As a result, similar mature markets have seen productivity and efficiency surpass that of the UK. Between 2017 and 2019, the UK economy it is suggested lost circa £85 billion GBP per year due to poor management, productivity fell 18% behind similar countries in G7. The economic environment does not favour businesses with little or no strategic direction with only 50% of companies surviving their first 5 years and a staggering 66% failing in the first 10 years. Small and medium enterprises (SME) account for 99.3% of all private sector businesses and employ 16.3 million people which is 60% of the private sector employment and £2 trillion GBP, which is 52% of all private sector turnover.
Latest statistics suggest that the UK will need 1.8m new managers by 2024, shockingly there are 2.5m accidental managers that move into leadership roles, this is a phenomenon known as the Peters Principle. This principle is an observation that the tendency in most organisational hierarchies such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach a level of respective incompetence. In essence every employee will continue to be promoted until at some point will be promoted into positions for which they are incompetent, these people then remain in these positions because of the fact that they do not demonstrate any further competence that would get them recognised for additional promotion.
One way to overcome the Peters Principle is for companies to provide adequate skills through training and development for those employees receiving a promotion, that said, even good employee training is unable to ultimately overcome the tendency for organisations to promote employees to positions of incompetence. Statistically 76% of organisations say they should invest more into training and development, but they don’t for various reasons, mainly cost implications and time constraints. So how do we develop and improve ourselves to be better without company Investment?
Having spent the last 15 years investing in my own personal development to PhD level, I am always encouraging people that the best investment is one that you place in yourself, however, what I am always interested in is why people see investing in themselves as a risk, or it being cost prohibitive, not having the time, patients or inclination to develop, but these same people want to move into the realms of leadership with not enough experience or an academic foundation to build on. It is an investment, the definition of investment is “the action or process of investing money for profit” we have many options for investment, we can invest in stocks and shares, high interest rate accounts that over time could give us 3-12% return on our investment, at worst we lose it all.
What if I can put this into a different perspective, if you are earning £45k a year doing what you enjoy in a field that you love and have an aspiration to move in the senior ranks of the organisation, instead of waiting for the company, if you were to develop and invest in yourself over a period of time, be it short courses, academic courses, through mentoring, seminars or on the job shadowing to name a few, the potential return can be that you grow significantly personally and professionally and gain the skills, knowledge and experience to move through the ranks of an organisation with the right competencies. This can lead to better roles and the opportunity to gain higher salaries in the range of £90-100k+ per annum which is a 100%+ return on your investment in yourself, at the very least as a person you grow.
In summary there are always reasons why we should not invest in ourselves, we all have the same 1440 minutes in a day, how we use them defines our happiness and success, we may be stretched financially in development in the beginning of our journey, but waiting for a company that should invest in you but doesn’t means that potentially you are not achieving your potential or at worst become a victim of the 2.4m managers in the UK that are unskilled and impacting the UK economy by £84 billion through the Peters Principle. This is a subtle call to action for all those people that want to do better and are waiting for something or someone to develop them, it’s a message to all those people that want to be the best they can be and are not sure how to do it, those that balance the real life challenges to the future life aims, always remember:
“Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty… I have never in my life envied a human being who led an easy life. I have envied a great many people who led difficult lives and led them well.”
Guest Blog Post prepared by Alex Ellinis