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Charles Barkley vs. Phil Mickelson: Why You Should Invest In Your Best People
May 19, 2009
By Robert A. Potter
Imagine you were put in charge of the training budget for golf, and because of the dire economy, you had to cut your spending. Would you stop training the average golfer who gets the most from it, or would you cut out training for your top people since they don't really need it anyway?
Recently, both Charles Barkley, former NBA great and average golfer, and Phil Mickelson, top professional golfer, took golf lessons. No question Charles Barkley needed more help. His swing has been called the ugliest in golf. Phil Mickelson already is a great golfer. He recently won the Northern Trust Open. Things didn't look good for Phil after shooting a 72 in his second round, so he flew in his coach, Butch Harmon, by private jet for some quick lessons.
So, whose budget would you cut? Phil's or Charles'? If you were measuring improvement, you would spend your limited budget on Charles since he could improve the most. But if you were measuring by return on investment, you would certainly direct precious training dollars to Phil since a small improvement could have a huge payoff.
Phil earned $1,134,000 for winning. Freddy Couples finished tied for third, two strokes behind Phil. His winnings: $327,600. The difference in their winnings: $806,400. That is a more than $400,000 per stroke difference! The Wall Street Journal recently quoted research from AimPoint Technologies suggesting Sergio Garcia would have made $2.5 million more last year if he had improved his putting by one stroke per tournament. Charles got a nice payout for making a reality series about his lessons, but he won't be winning tour money any time soon.
How much do you get paid for finishing second?
If you are like most of my clients, you are cutting back on training. Way back. You know the arguments about how this will hurt you in the long run. But right now you are not worried about tomorrow; you are worried about surviving today. There is just no money for training. But if you are not investing in your best people right now, you are missing your best opportunity for survival because they are the only ones who can save you.
Top producers contribute to revenues at multiple of their mid- and low-level professionals. For example, an executive at a commercial real estate firm recently told me the top 10 percent of his brokers were producing 90 percent of the firm's revenues. He said his top producers contribute 10 to 20 times the revenue as mid- to low-level people. That means a dollar invested in this elite group could yield a tenfold return over the same dollar invested in the average player.
Most training dollars are spent on mid- to low-level people. The objective is to get them to perform more like your top producers. Little or no money is spent on training the top people because they already are very good. But a small improvement in your top people has a much bigger impact than the same investment in the rest.
In business there is no prize money when you finish second. All of the spoils go to the winner. And the difference between winning and loosing is razor thin. I interviewed a woman who had recently chosen a service provider for a $300 million project. When asked why she chose the winner over the competitive alternatives, she explained that she thought they were a little more responsive. Think about that. After hundreds of hours of research, preparation, interviews, proposal writing, and presentations, the second place finisher in this competition lost business worth $300,000,000 for lack of a few timely phone calls.
Right now one of your top producers is competing for a major piece of business. That business could make or break your year. How much do you win if you get chosen for that big pursuit? How much do you win if you finish second? What could it mean to your win rate if your top producers were one stroke better?
Do you still think it's a good idea to save a few thousand dollars by cutting training?
Robert A. Potter is the author of "Selling Real Estate Services: Third Level Secrets of Top Producers and Winning in the Invisible Market: A Guide to Selling Professional Services in Turbulent Times." He also is managing principal of RA Potter Advisors, a marketing and sales strategy consulting practice for service providers. You can reach him at 415-459-4888.
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