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Training budgets: five reasons why company training fails

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Training budgets: five reasons why company training fails

Many companies assume that investments in sales training will increase sales productivity. And, because the sales team is on the front line of revenue and profit, it seems intuitive that improving sales skills would have a positive, immediate, and direct impact on a company’s bottom line.

That assumption, however, has not, historically, served companies particularly well. Companies waste large amounts of money every year on sales training.Karen Woodhead, Director of Marketing,at Huthwaite International, sales and negotiation specialists and the company behind SPIN Selling – one of the most successful training methods in the world – talks about how companies are wasting their training budgets and why sales training frequently fails:

  • Trying to fix the wrong problem

Frequently, we see organisations embark on a sales training initiative without a clear definition as to the problem they expect the sales training to solve. Sales training is a great tool to help improve selling skills, but it can’t fix organisational issues, misaligned compensation strategies or ineffective hiring practices. Training should be undertaken only if there is a clear definition of why it is needed and what the expected outcomes to define success are.

The training team (internal or external) should work with key stakeholders to identify current gaps and challenges in the organisation that training can work to address, and use this as a way of prioritising the training programme – working to align this with the desired outcomes. Looking 6-12 months ahead following the training, the team should work with stakeholders to define what they expect to be different after the training and how they will measure success.

  • Over-involving stakeholders

We often see training programmes initiated in large businesses because someone identified a budget, but there is a lack of clear sponsorship or connection to key stakeholders once the training programme is initiated. For training to be successful, the stakeholders need to be part of the initiative before, during and after the training so they can communicate enthusiasm and expectations throughout. Many times, we see training programmes that seem to have become an end in themselves, as opposed to a means to solve a problem the key stakeholders have identified.

Ensuring sales leadership is involved in sponsoring the programme and it is visible throughout, will result in a sale team that is invested in the training from the get go.

  • Failing to define desired outcomes

As discussed above, identifying the problem is the first step, but it is crucial to define the desired outcomes that are expected as a result of the training. How will the sponsors know if the programme has been successful? How will they measure results? The key factors are:

  • Did the participants enjoy the training?
  • Did they understand the material?
  • Are they able to apply it and create behaviour change?
  • Will they receive extra post training support to ensure the new method is implemented?
  • Will it produce business results?

Including outcome measures in the programme charter and defining them before the training is underway will ensure the participants receive the most out of the sessions. Utilising surveys, coaching and benchmarking to isolate and measure the desired outcomes after the training will prove if it has been properly implemented.

Without a real implementation method, training can be delivered in a classroom environment and then forgotten as soon as the session is over.

  • The training isn’t customised to the business

Another reason training programmes fail is that they take an ‘off the shelf’ or ‘one-size-fits-all’ approach. While there are fundamental selling skills and approaches that work across industries, unless the programme is customised and aligned with the business, we find sales professionals resist the programme, feel it’s too generic or has a difficult time figuring out how to apply the concepts to their specific situation.

Working with key stakeholders and a representative sample of the participants (managers and sales professionals), the organisation should identify specific exercises and role plays that can be customised for the business. The programme doesn’t need to be built from the group up, but skill application, case studies, role-plays and terminology need to resonate. Identifying common challenge areas and then building in scenarios, which provide for skill application with live accounts, helps participants feel like they’re getting real work done. It also helps prepare them to apply the concepts when they get back into the field following training.

  • Neglecting to reinforce the programme

Finally, one of the biggest challenges is making sure sales managers provide ongoing coaching and reinforcement. Regardless of how good the training is, it will fail if the managers aren’t reinforcing the skills in the field.

Ensure that a comprehensive reinforcement plan is part of any sales training programme and that managers have the coaching skills and tools to support their teams. Involve the managers before, during and after the full process to help ensure success. Hold recurring reinforcement sessions that focus on skill application to maintain the skills learnt and keep them at the forefront of the full team’s mind.

These are some of the common challenges we have experienced after working with hundreds of sales teams over our 40-year history, including 30% of the FTSE 100. Identifying these challenges and taking steps to mitigate them in advance can go a long way to setting your programme up for success.

About Huthwaite International

Huthwaite International is a leading global provider of sales, negotiation and communication skills development. It supports companies around the world with behavioural methodologies which are research-based and measurable.

Best known for its creation of the iconic SPIN® Selling, which is more relevant today than ever before, Huthwaite has worked with hundreds of thousands of sellers, negotiators and communicators worldwide, helping them improve their performances.

Operating across all sectors, the brand has a client base that boasts some of the world’s largest and best-known companies.

Huthwaite is the proud Skills Partner of the Association of Professional Sales (APS) – working with them to develop key industry initiatives.

As a founder signatory of the Management Consultancies Association’s Consulting Excellence scheme, Huthwaite promotes high standards of ethical behaviour, value for clients and professional development, as well as remaining committed to continual digital innovation in the delivery of its programmes.

Business

Euro zone business activity shrank in January as lockdowns hit services

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Euro zone business activity shrank in January as lockdowns hit services 1

By Jonathan Cable

LONDON (Reuters) – Economic activity in the euro zone shrank markedly in January as lockdown restrictions to contain the coronavirus pandemic hit the bloc’s dominant service industry hard, a survey showed.

With hospitality and entertainment venues forced to remain closed across much of the continent the survey highlighted a sharp contraction in the services industry but also showed manufacturing remained strong as factories largely remained open.

IHS Markit’s flash composite PMI, seen as a good guide to economic health, fell further below the 50 mark separating growth from contraction to 47.5 in January from December’s 49.1. A Reuters poll had predicted a fall to 47.6.

“A double-dip recession for the euro zone economy is looking increasingly inevitable as tighter COVID-19 restrictions took a further toll on businesses in January,” said Chris Williamson, chief business economist at IHS Markit.

“Some encouragement comes from the downturn being less severe than in the spring of last year, reflecting the ongoing relative resilience of manufacturing, rising demand for exported goods and the lockdown measures having been less stringent on average than last year.”

The bloc’s economy was expected to grow 0.6% this quarter, a Reuters poll showed earlier this week, and will return to its pre-COVID-19 level within two years on hopes the rollout of vaccines will allow a return to some form of normality. [ECILT/EU]

A PMI covering the bloc’s dominant service industry dropped to 45.0 from 46.4, exceeding expectations in a Reuters poll that had predicted a steeper fall to 44.5 and still a long way from historic lows at the start of the pandemic.

With activity still in decline and restrictions likely to be in place for some time yet, services firms were forced to chop their charges. The output price index fell to 46.9 from 48.4, its lowest reading since June.

That will be disappointing for policymakers at the European Central Bank – who on Thursday left policy unchanged – as uncomfortably low inflation has been a thorn in the ECB’s side for years.

Factory activity remained strong and the manufacturing PMI held well above breakeven at 54.7, albeit weaker than December’s 55.2. The Reuters poll had predicted a drop to 54.5.

An index measuring output which feeds into the composite PMI fell to 54.5 from 56.3.

But despite strong demand factories again cut headcount, as they have every month since May 2019. The employment index fell to 48.9 from 49.2.

As immunisation programmes are being ramped up after a slow start in Europe optimism about the coming year remained strong. The composite future output index dipped to 63.6 from December’s near three-year high of 64.5.

“The roll out of vaccines has meanwhile helped sustain a strong degree of confidence about prospects for the year ahead, though the recent rise in virus case numbers has caused some pull-back in optimism,” Williamson said.

(Reporting by Jonathan Cable; Editing by Toby Chopra)

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Volkswagen’s profit halves, but deliveries recovering

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Volkswagen's profit halves, but deliveries recovering 2

BERLIN (Reuters) – Volkswagen reported a nearly 50% drop in its 2020 adjusted operating profit on Friday but said car deliveries had recovered strongly in the fourth quarter, lifting its shares.

The world’s largest carmaker said full-year operating profit, excluding costs related to its diesel emissions scandal, came in at 10 billion euros ($12.2 billion), compared with 19.3 billion in 2019.

Net cash flow at its automotive division was around 6 billion euros and car deliveries picked up towards the end of the year, the German group said in a statement.

“The deliveries to customers of the Volkswagen Group continued to recover strongly in the fourth quarter and even exceeded the deliveries of the third quarter 2020,” it said.

Volkswagen’s shares, which had been down as much as 2%, turned positive and were up 1.5% at 164.32 euros by 1158 GMT.

Sales at the automaker rose 1.7% in December, at a time when new car registrations in Europe dropped nearly 4%, data from the European Automobile Manufacturers’ Association showed.

Like its rivals, Volkswagen is facing several challenges due to the coronavirus pandemic as well as a global shortage of chips needed for production.

It also sees tough competition in developing electrified and self-driving cars. The merger of Fiat Chrysler and Peugeot-owner PSA to create the world’s fourth-biggest automaker Stellantis adds to the pressure.

Volkswagen said on Thursday it missed EU targets on carbon dioxide (CO2) emissions from its passenger car fleet last year and faces a fine of more than 100 million euros.

The group is expected to release detailed 2020 figures on March 16.

($1 = 0.8215 euros)

(Reporting by Kirsti Knolle; Editing by Maria Sheahan and Mark Potter)

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Global chip shortage hits China’s bitcoin mining sector

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Global chip shortage hits China's bitcoin mining sector 3

By Samuel Shen and Alun John

SHANGHAI/HONG KONG (Reuters) – A global chip shortage is choking the production of machines used to “mine” bitcoin, a sector dominated by China, sending prices of the computer equipment soaring as a surge in the cryptocurrency drives demand.

The scramble is pricing out smaller miners and accelerating an industry consolidation that could see deep-pocketed players, many outside China, profit from the bitcoin bull run.

Bitcoin mining is closely watched by traders and users of the world’s largest cryptocurrency, as the amount of bitcoin they make and sell into the market affects its supply and price.

Trading around $32,000 on Friday, bitcoin is down 20% from the record highs it struck two weeks ago but still up some 700% from its March low of $3,850.

“There are not enough chips to support the production of mining rigs,” said Alex Ao, vice president of Innosilicon, a chip designer and major provider of mining equipment.

Bitcoin miners use increasingly powerful, specially-designed computer equipment, or rigs, to verify bitcoin transactions in a process which produces newly minted bitcoins.

Taiwan Semiconductor Manufacturing Co and Samsung Electronics Co, the main producers of specially designed chips used in mining rigs, would also prioritise supplies to sectors such as consumer electronics, whose chip demand is seen as more stable, Ao said.

The global chip shortage is disrupting production across a global array of products, including automobiles, laptops and mobile phones. [L1N2JP2MY]

Mining’s profitability depends on bitcoin’s price, the cost of the electricity used to power the rig, the rig’s efficiency, and how much computing power is needed to mine a bitcoin.

Demand for rigs has boomed as bitcoin prices soared, said Gordon Chen, co-founder of cryptocurrency asset manager and miner GMR.

“When gold prices jump, you need more shovels. When milk prices rise, you want more cows.”

CONSOLIDATION

Lei Tong, managing director of financial services at Babel Finance, which lends to miners, said that “almost all major miners are scouring the market for rigs, and they are willing to pay high prices for second-hand machines.”

“Purchase volumes from North America have been huge, squeezing supply in China,” he said, adding that many miners are placing orders for products that can only be delivered in August and September.

Most of the products of Bitmain, one of the biggest rig makers in China, are sold out, according the company’s website.

A sales manager at Jiangsu Haifanxin Technology, a rig merchant, said prices on the second-hand market have jumped 50% to 60% over the past year, while prices of new equipment more than doubled. High-end, second-hand mining machines were quoted around $5,000.

“It’s natural if you look at how much bitcoin has risen,” said the manager, who identified himself on by his surname Li.

The cryptocurrency surge is affecting who is able to mine.

The increasing cost of investment is eliminating smaller players, said Raymond Yuan, founder of Atlas Mining, which owns one of China’s biggest mining business.

“Institutional investors benefit from both large scale and proficiency in management whereas retail investors who couldn’t keep up will be weeded out,” said Yuan, whose company has invested over $500 million in cryptocurrency mining and plans to keep investing heavily.

Many of the larger players growing their mining operations are based outside of China, often in North America and the Middle East, said Wayne Zhao, chief operating officer of crypto research company TokenInsight.

“China used to have low electricity costs as one core advantage, but as the bitcoin price rises now, that has gone,” he said.

Zhao said that while previously bitcoin mining in China used to account for as much as 80% of the world’s total, it now accounted for around 50%.

(Reporting by Samuel Shen and Alun John; Editing by Vidya Ranganathan and William Mallard)

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