When building a people development system, it's important to first understand what broader skills your agency needs, and then figure out how to develop those skills. Otherwise you’ll put your people on a gerbil wheel of “training and learning” with no impact on the business. Try answering these 4 questions before investing in any formal training:

1. What kind of agency do you want to be?

Every business is in a transformation of some sort. It’s unlikely your 3-year goal is to “pretty much stay the way we are right now.”

So what kind of agency do you want to be in a year or two?

Maybe you want to go after larger clients, so you need to adapt your sales cycle and get better at hooking enterprise accounts.

Maybe you want to build out your digital studio, so you have to change your whole design process to accommodate for new capabilities.

Perhaps you want incredibly fast turnaround times, so you need to optimize your project management and delivery processes.

Articulate those goals. Then figure out what parts of your business must change to get there.

2. What skills does that new agency need?

Want to go after bigger clients? You’ll need to refine the way you manage your sales pipeline, change how you communicate with clients, and build consultative selling skills on the accounts team.

Want to build out your digital studio? You’re going to need better systems management as your development process becomes more complex, and better digital skills on your other teams so they can better collaborate with the digital studio.

Want to reduce turnaround times? You’ll need better productivity and process management skills, and improved communication to manage customer expectations.

List out these skills and tie them to the transformational goals they support. If your agency had all these skills in place, how might that grow revenue or lower costs? Figure that out, and you’ll have the beginning of a useful people development budget.

3. Where are your gaps and who are your sages?

Now look at that list of skills and look at your org chart. Who needs those skills in the future, and who has those skills right now?

Start by finding your sages. These are the people in the agency who already have the skills you need. They might not be the people who ultimately need them. For example, one of your GMs might have Enterprise sales experience, but it’s the accounts team that will be selling to larger clients. Write the names of your sages next to the skills they have. Now you have a roster of internal wisdom to draw from.

Then identify the gaps. Figure out which parts of the business need the skills, then determine whether they have them or not. Good managers will have a sense of their team's skill gaps. If not, there are other ways to figure this out. A simple survey asking people to self-rate themselves can be enlightening.

By the end of this process you should have, for each skill area, a list of people who have them and people who need them.

4. How might you close the gaps?

Start with a simple question: for each skill area, should we train for it or hire for it?

The reality will be more subtle and might be a combination of the two. But consider the trade-offs of each. Acquiring skills through training takes time, but can strengthen teams and workflow. Acquiring skills through hiring is faster, but has a ripple effect across culture and team dynamics.

Each approach has various degrees of intensity and cost as well.

Training could be as simple as asking your sages to mentor some people. Or maybe you hire outside trainers to do coaching and workshops. Or maybe you pay for expensive offsite development and long-term university degrees.

Hiring could involve a little bit of outsourcing to specialized contractors. Or you might hire a pricey but short-term consultant. Or maybe you bring on a full-time, long-term new hire or even build out a whole new team.

Or you might simply ask the people who need the skills to go figure it out for themselves. Remember, people want to go on a journey. Frame this skills gap in the right way, and you give people permission to level-up their professional value. And they're the closest to the problem anyway, so they have insight and energy that might surprise you.

After answering the four questions above you should have a clear line as follows:

Business Goals ⇒ Skills Needed ⇒ Gaps to Close ⇒ Value of Closing Gaps ⇒ Tactics to Close Gaps

You can now see the direct impact your people development expenses have on your bottom line. And you can trust they’re designed to move your agency forward.