Focus on R&D, Not Professional Development

An article originally posted on AgencyPost, July 29, 2013

Manufacturing, tech, sciences, energy and automotive — these and just about every industry segment that exists budget and invest significant funds in research and development. So, why doesn’t the communications industry?

This is not a tax code discussion. I’ll leave that to the accounting experts. Based on my minimal knowledge on the tax implications, there are distinct differences in deductions associated with both of these. We view the terms and their meanings in different ways, which has caused us to consider professional development as an expense rather than an investment.

Professional Development Should Be More Than a Tax Deduction

Many agency owners look at professional development as a passive necessity to sustain the business and a tax deduction to write off conferences. This profession invests very little in its people. The average hovers around 1 percent of revenue. I am not trying to be crass, but we spend around 55 percent of revenues on our equipment. Yes, I mean our people — the salaries and benefits. Yet, we invest almost nothing on upgrading that equipment.

Maybe the use of manufacturing terminology is interfering with fully grasping the difference in approach. Perhaps it’s better to think in terms of farming and cultivating. How much do we need to invest in our people to help them grow?

The Concept of R&D Carries More Value

We use the approach that R&D is focused on improving processes and techniques that will garner value for the company, and we should also be using this objective with our people. Improving the capabilities of people improves their value to the business.

We spend large sums of money to investigate and hire intelligent, talented people. We bring them in, give them some initial training, the company manual, a computer and desk. Then, we (essentially) tell them “you are on your own” to learn and grow. Go discover new ideas for the client — ones that are billable. But, assisting you in your own growth? Not so much. We aren’t fertilizing enough. We lack training leadership.

Andrew Bennett, when he was president of Arnold, wrote an interesting blog post about our profession-wide lack of investment in our people. Here are a few of Andrew’s points to consider:

  •  50 percent of talent in the marketing communications industry feel undertrained and lack a definable career path.
  • 90 percent of employees say they learn by figuring things out on their own.
  • The average Starbucks barista gets more training than the average agency employee.

Further, less than one in two employees think their agencies are committed to their development and growth. Our people want to learn, yet, we don’t assist in their growth. Also, we fall short at attracting and retaining the best and brightest people in the agency business. If I felt more love working at a coffee house, why would I want to get run through the grinder at an agency?

According to Bennett, the management consulting firm, McKinsey invests an average of one month annually in growing their staff (approximately 8.5 percent of salary). We spend two days (0.8 percent of salary). Could this have something to do with not being seen as intellectual leaders? In general, businesses invest between 2 to 15 percent of revenue on R&D. What our profession invests in our people is a joke.


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