Want Growth? Invest in Capability Building

Want Growth? Invest in Your People via capability Building

- 24 Best Leadership Practices | Part 13 of 24 -

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Organizations don't change and improve until its people change and improve. Taking it one step further, people can't improve unless the enterprise commits to investing in their development via capability building. Simply, employees are a company’s greatest asset so leaders must ensure the organization is giving them the tools, training, and accompanying inspiration to fully unlock their potential because lasting change hinges on top-quartile capabilities. As such, in today’s ever-changing landscape where a transformation always on mindset is vital, leaders must invest in their people. Indeed, the Fourth Industrial Revolution has ushered in a new era in which employees need the endurance of a marathoner, the musculature of a sprinter, and the mental fortitude to embrace a race with no finish line but rather an unending goal of continuous improvement. Otherwise, once certain milestones are reached, employees revert back to business as normal. Such a mindset destroys the company from within because a status quo mentality sets in. On the other hand, enterprises that embrace capability building as the growth tool that is innovates instead of imitates, disrupts instead of reacts, and embraces change instead of perpetuating the status quo.

Staying healthy via exercise is a continuous rather than a one-off or annual process. Enterprise capability is no different. Simply, there is no finish line when it comes to a continuous improvement, transformation always on mindset.

The Case for constant Capability Building

Mentorship alone won’t empower a global workforce with the tools needed for success – especially in a disrupted landscape where the need to embrace change is constant. Thus, enterprises must invest in constant, not one-time, capability building. This can be analogized to working with a personal trainer. The trainer can hold a client’s hand and help the client lose the weight and/or gain the musculature they want. However, the litmus test is what transpires when the trainer is gone. Simply, is there truly a sustainable stickiness or does the extra weight and poor nutritional habits quickly return once an individual reaches their personal body goal. Staying personally healthy is a constant, lifelong endeavor and not just a one off effort. Just as you wouldn’t return to no exercise, unhealthy eating, and 24/7 sitting on a sofa once one’s personal goal is reached so too must enterprises take a continuous improvement mindset when it comes to capability building. You can’t become lean and/or muscular by only exercising one time every 3-6 months. Simply, training is a daily, weekly, and monthly process rather than a one-off or annual process. Enterprise capability is no different. Unfortunately, companies often focus too much on the finish line and not enough on building embedded capabilities that stand the test of time rather than diminish once milestones are reached. Indeed, there is no finish line when it comes to a continuous improvement, transformation always on mindset. Accordingly, the only way to remain top of class in a never ending race is to embrace a continuous improvement mindset while investing in the tools to drive lasting change.

To embrace a continuous improvement mindset leaders must first equip employees to succeed via continuous training. As such, employees will stay longer, be more productive, and innovate because they have been given the resources to maximize their potential and exceed customer expectations.

Capability Building's Correlation to growth, Engagement, & Turnover

Ultimately, data illustrates that there are two primary reasons why people quit their jobs, namely: (1) they disliked their manager and/or (2) they weren’t learning anything because the company wasn’t investing the resources necessary for success and continuous development. Regarding the second point, the company simply wasn’t helping these employees develop the skills needed to navigate the highly complex, ever-changing landscape. As such, capability building has taken a front seat in not only ensuring enterprises keep the right talent (i.e., reduce employee turnover) but also in ensuring its talent can best serve its customers (i.e., improve employee productivity and engagement). These three elements, (1) employee turnover, (2) employee productivity, and (3) employee engagement are each highly correlated to customer engagement. Simply, if you want raving, engaged customers you must first create raving, engaged employees. And, ultimately, all four of these elements, (1) employee turnover, (2) employee productivity, (3) employee engagement, and (4) customer engagement can all be linked back to the level of employee training or lack thereof. Simply, invest in your people or watch them leave. Exceed customer expectations or someone else will do it for you. For example, by 2014, only 16 percent of Walmart’s stores were meeting customer expectations. Walmart invested in 200 training facilities, which transitioned this 16 percent to 75 percent, a significant step forward in unlocking the power of not only meeting but exceeding customer’s ever changing expectations. 

Exhibit 2 (Click to Enlarge)

Exhibit 3 (Click to Enlarge)

Capability Building ROI

According to our client engagements and research, every $1 invested in improving employee engagement can drive up to $4 ROI (See Exhibit 2). In addition, studies have shown that over a course of seven years, companies with highly engaged employees grew revenues two and a half times as much as those with low engagement levels. However, and according to both Gallup and Qualtrics, only 30 percent of employees are engaged in their work (See Exhibit 3). Going a bit deeper, and according to Bain & Company, while only 30 percent of employees are engaged at work unfortunately only 15 percent are actually inspired. Without inspiration let alone engagement, employee productivity, innovation, and customer service will be far from maximal. Thus, with a potential 4X ROI the investment decision in capability building is quite simple. 

Every $1 invested in improving employee engagement can drive up to $4 ROI. With only 30 percent of employees being engaged at their work and merely 15 percent being truly inspired the investment decision is simple.

Ensuring Top-Quartile Capability Building

While the capability building ROI potential is significant, oftentimes when companies finally decide to invest in training they do it incorrectly, equating to low engagement and a poor ROI. In a nutshell, not all capability building investments are created equal. To create firm-wide employee engagement, companies must first implement capability building that is also engaging. According to our research, the traditional method of corporate classroom training is one of the least effective techniques to building capabilities. Simply, companies often spend an enormous sum on providing the same training to its entire organization. However, this is (1) not engaging, (2) not tailored, and (3) not experiential. For example, organizations often provide the entire enterprise with the same e-learning training. Unfortunately, most of the employees put the training on one monitor and work on unrelated material on another monitor. This leads to zero improvement across employee engagement, customer loyalty, and innovation. Instead, this cookie cutter approach leads to an even more uninspired workforce, diluted productivity, and a significant training investment loss. Instead, companies should implement experiential capability building that allows customizable training that appeal to the needs and learning styles of different employees and business units. For example, war room and train-the-trainer initiatives are an excellent choice because it provides a level of customization and experiential training that is far more engaging than e-learning. This is simply one example of many that if done properly, can create an organizational talent, training, and engagement engine.

Organizations don’t change and improve until its people change and improve. However, people can’t improve unless the enterprise invests in their development. Simply, invest in your people or watch them leave. Exceed customer expectations or someone else will do it for you.


A company's employees are its greatest asset and there is likely no investment that will do more to increase growth and productivity than investing in training. Even with this in mind, oftentimes the biggest obstacle to putting a training program in place is the perception that it will take too long and be too cost prohibitive. However, with up to a 4X ROI and with only 30 percent of employees engaged at work companies should not let the excuse of time or money rob them from perhaps the greatest ROI lever. Indeed, change is the new normal. As such, for enterprises to embrace a continuous improvement mindset its leaders must first equip its employees to succeed in both the short and long-term via a continuous investment in training. In turn, employees will stay longer, be more productive, and innovate because they have been given the resources to unlock their potential. Consequently, this will create higher employee engagement and inspiration all of which will ensure customer’s expectations are not only met but also exceeded. Indeed, such a mindset will ensures employees have the endurance of marathoner, the musculature of a sprinter, and the mental fortitude to embrace a race with no finish but rather a runway of continuous improvement. 

Read the other best leadership practices HERE.

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24 Best Leadership Practices
- Series Overview -

The following article is Part 13 of a 24 part series on leadership (See all 24 best leadership practices HERE). To summarize, leadership is everyone’s business. Moreover, leadership abilities are not some innate talent that some were either born with or not but rather is a highly learnable skill. As such, everyone has the potential to become a great leader as long as one embraces a mindset of continuous improvement. Simply, leadership is not so much about inherent gifts and raw talent but rather the emotional awareness, humility, and perseverance to understand that leadership is a lifelong journey that is never mastered. Indeed, aspiring leaders must acquire the endurance of a marathoner, the musculature of a sprinter, and the mental fortitude to embrace that there is never a finish line but rather an unending goal of continuous transformation.

Ultimately, the leadership journey is not about becoming someone else but instead is about becoming one's best self so that in turn one can help others become their best self. And, while there are many facets that go into successful leadership we have identified 24 best leadership practices all of which are grouped into one of three categories, namely (1) inspire, (2) empower, and (3) innovate (see all 24 practices HERE).

  1. INSPIRE: To inspire action, great leaders appeal to people's hearts more than their minds. Simply, visionary leaders plan with the mind, lead with the heart, and reflect with the soul.
  2. EMPOWER: Great leaders empower those they are leading while simultaneously creating a collaborative culture that promotes the notion that together we can accomplish anything as long as we don't care who gets the credit.
  3. INNOVATE: Visionary leaders embrace change and understand that the term "good enough" is used by the lazy to justify inaction. As such, great leaders disrupt themselves and their companies before others do it for them. 

Leadership is the greatest race one will ever run – one without a finish line but also one with an exponential ceiling for those that embrace change, growth, and learning. While the level of employee talent may determine the potential of an organization it is the leader that ultimately unlocks that potential and determines the success of both the organization and its people. Although no leader will be a master at each of the proposed 24 leadership practices, awareness is often the greatest agent for change and continuous improvement. As such, we hope the proposed practices will be of service to you in maximizing not only your leadership potential but also the potential of those around you.


Joshua Seedman is the founder and chairman of PNI Consulting, a management consulting firm that specializes in global transformations. He has over 20 years of operating and general management experience with expertise in organizational transformations, customer experience, employee engagement, digital transformations, sales & marketing, operational turnarounds, culture/change management, and high-stakes negotiations. His experience includes executive roles within F500 companies, top-tier consulting leadership (McKinsey & Company), over 10 years of global P&L ownership, and corporate lawyer (Davis Polk & Wardwell). He received his MBA from Kellogg School of Management and his Juris Doctor (cum laude) from Northwestern University School of Law.

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