The importance of business acumen training for managers and employees
in a letter to Klaus became clearer and clearer. Company leaders want them to align educational presentations with the strategic objectives of the organization.
This is not an easy challenge. You must ensure that education and communication initiatives that strengthen the company's goals. We must help employees understand these goals and develop the skills and motivation to contribute to it.
and at the most basic level of alignment, we must make sure that each employee understands how the company makes money. This includes understanding how driven profitability, how to use the assets, and how it is created and how monetary actions and decisions day after day, including in private, the impact and success.
develop discernment is essential to align the business. Consider Southwest Airlines, which was founded in 1971. With 33 consecutive years of profitability, it has become recognized on a large aviation culture-wide incentive it creates for employees and dedication to exceptional customer service
has suffered a lot from the industry during the years of the south-west growth, including many of the airlines that have merged or declared bankruptcy. Southwest buys the same aircraft and the same jet fuel as other airlines, and pay their employees wages and competitive advantages. What is the difference?
Unlike some of its competitors, the team management, including the south-west of employees in the financial results of the company, explaining what these numbers mean, and more importantly, helping to link the decisions and actions of all to a minimum. The airline has an open culture, and one of inclusion at all levels, and employees understand their role in providing a great service and keep costs in line.
Certainly there are other factors that contribute to the success in the Southwest, but it's hard to positive impact of this approach ignored to develop business acumen of all staff and managers so that they can contribute to the success of the company.
The challenge for Education
Unlike those in the southwest and the shareholders and managers of individuals in many organizations today are not educated about the big picture of their business. They have a narrow focus on their department's functions and function was not able to make the relationship between their actions and the success of the company. Multiplied by hundreds or even thousands of employees, and this lack of understanding - a lack of real business acumen - means that many of the decisions being made now are being taken a number of measures that do not fit in with business objectives
how it can be trained to help bridge the knowledge gap ? For many companies such as Southwest, and implementation of educational programs aimed at a strong foundation of financial knowledge and business acumen setting made telecommunications and financial results to employees easier and more effective
acumen: the definition of
very simply discernment is to understand what it takes to work to earn money. It involves financial literacy, an understanding of the numbers on the financial statements, as well as understanding the strategies and decisions and actions that affect these numbers.
people with financial literacy, for example, will be able to "read" the statement of income for the company. This employee or manager to understand the terminology (revenue and cost of goods sold, profit, profit margin, etc.) and what they represent numbers (ie gross profit margin is equal to the total sales / revenue less cost of goods sold).
with discernment, the individual will be able to "interpret" this same income statement, taking into account how the strategies and initiatives of the company influenced numbers during specific periods of time
Consideration of simple comparison: in football foot, it is necessary for the players to know how the game record as well as how to play the game to change the outcome . In business, and financial literacy is to understand the "result" (financial statements) and business acumen is to understand how it (the strategic actions and decisions).
ask the right questions
When business acumen spreads through the organization, employees and managers begin to ask questions. These questions are directed not only to the organization, but also in themselves and their administrations - questions about processes, products, systems, staffing and more, which can lead to decisions necessary, innovative and procedures
acumen helps everyone understand that it is not enough to ask, "How can we Cut costs?" Or says: "We need to increase sales." Digging deeper, the employees with the highest levels of business acumen ask questions that take into account the long-term potential of the decisions and show a greater ability to make connections between the performance and the impact of the results.
questions that we could get to the root of the operating ratios disappointing:
• Are the costs of production have risen? If so, why?
• Do we change prices? If so, how that affected our margins?
• Are there any competitive issues that affect our performance?
• Are there any changes in customer requirements?
• If our costs per unit produced has gone up, we can better control the efficiency of our production or service delivery?
• Is there a way to produce the largest volume of the product at the same cost?
• Can we raise prices, and still provide value to customers and remain competitive?
when the questions become more specific, can take the right decisions.
acumen managers of
managers at all levels need a high level of business acumen to do their job. Every day, and making decisions on personnel, projects and operations, expenses, customers and much more - decisions that ultimately roll to a larger organizational results. Managers who make these decisions while looking only through the lens of departments, with a limited understanding of how the impact of these decisions financial results or how they are linked to the achievement of the organization and its goals goals, and working in silos that can harm eventually to the company.
are often promoted
managers to positions of responsibility because of their experience "technical." It was a customer service representatives successfully, great salespeople, researchers or innovative IT professionals well-respected. Now that they are entrusted to make decisions and budgets, projects and people. Often you do not have financial literacy, nor have they developed the perspective of higher-level work. Over time, especially if they move up the administrative ladder, they may develop this. Or were not may.
need managers who are working as part of the management team, with accountability for the results of their own organizations, as well as the company's results as a whole. Therefore, more and more organizations, financial literacy and business acumen have been built to the requirements of administrative efficiency and integrated training acumen in management curricula.
acumen staff
Although there is little controversy about the need for managers to develop business acumen, are skeptical organizations sometimes need this understanding in staff levels. But shareholders in the front lines, those who are involved directly with production or customer service, for example, and take action every day that the business impact of the results.
Consideration of a salesperson who discounts products, or service representatives to deal with the unhappy customer or a person who observes the maintenance problem. Action takes all of them have eroded profit margins, you lose a good customer or allow safety and congestion issues. Without understanding how their actions impact of the company's results, they may not be considered in the context of alternatives.
many organizations have decided that literacy and financial acumen is not just for managers anymore. They decided to develop the company of people who understand the business; who know what the return on assets and return on average investment; who know how inventory turnover rates results and the importance of a positive cash flow. Those who believe that the relationship between the financial success of the company and their own health benefits, 401 (k) plans and more. In other words, they need people who understand the "business" of the company.
in his book good for great , says Jim Collins, "We found no evidence that the" good to great "companies had more or better information than the comparison companies. Nothing. He was both groups of companies and the arrival of nearly identical to good information. the key, then, lies not in better information, but in turning information into information that can not be ignored. "
with an increased level of business acumen, managers and employees can be explained by better information, making the relationship between their actions and the results of the company.
Another reality of today's global business
operating results of the company to the public well-known at the end of each quarter. Analysts, investors, media and staff from everyone has access to the financial results of the company. With a significant increase in the focus on accounting irregularities over the past few years, senior management became aware of the very need to provide accurate financial information in a timely manner. Employees have become much more likely to wonder about these numbers. "Is my company honest? Are numbers tell the whole story?"
without a basic understanding of the financial results and the ability to interpret, you may become suspicious employees and, ultimately, disengagement. Workers disengagement, in turn, negatively affect productivity and profits.
CEOs of public companies, then, must make sure that managers and employees are able to understand the numbers and confidence in them. This means effectively teach business acumen as well as continuous and open communication from the top.
The head of the Board of Directors of General Electric Company former Jack Welch in his book directly from the gut , "Get on the mind of every employee in the game is a big part of what is the function of the president Executive everything ... There's nothing more important. "
big picture
As we become a nation of specialists, armed with information and new operating systems technology at the enterprise level, it became easier for managers and employees to become immersed myopically in their own jobs. This immersion can have the effect of blocking their view of the big picture. You may not consider the cumulative effect of the lost assets. They may have little regard for the objectives and responsibilities of other team members, departments or divisions. It may lack the motivation to invest personal energy to work in the monetary project.
organizations that are engaged in developing business acumen provide a clearer vision and the context in which employees can work, and to create an environment more likely to break down internal barriers. There is less waste and less contradiction. There is an increase innovation. And more engaged employees, they understand their role and its impact on business results, and they're more likely to believe that their efforts really matter. They are more likely to think like an employer.
Think like an owner
to be successful, it must be business owners are able to helicopters above the day-to-day issues and see the big picture. You must understand how a piece of business with each other to affect the profitability and cash flows, and they must be able to evaluate the risks and rewards of potential decisions. Best business owners study the numbers and ask themselves tough questions, and analyze their mistakes, and take decisive action
to really understand the business, and the owners must understand how to work makes money - in other words, how do you produce sales The profits and cash . Organizationally, they know that it comes people, processes and productivity . Customer front, but all satisfaction, and loyalty and market share . In the end, all the actions that have been taken and will take every decision in any of these areas impact on sales, profits or cash.
when managers and employees start thinking like owners, but, also, to look at the big picture, to understand how all the pieces together, and evaluate the risks and rewards. I understand, as the owner, how the company makes money, and how it stays in business, and how they contribute to their success.
The benefits of the Organization of the involvement of managers and workers in this type of ownership and clear thinking. How can a company develop the business acumen of its people
develop business acumen: Two Stories
have business in general to develop the business acumen of its own. They are hands-on with their business, and we must make all decisions as they go along, whether it is good or bad. Either they learn from their mistakes or fail.
it's very different for managers and employees in the organization.
do not participate in all aspects of the business, and make decisions in the first place within their areas of responsibility. Since see links is not easy, and they need to learn another way.
books and lectures can help. But business acumen has been the development of a better experience. Learners must be able to analyze situations, ask questions and discuss issues with other learners, and to consider the options, make mistakes and see the results.
despite the fact that there are a variety of ways to accomplish this type of experiential learning, many companies have found that the simulation, which reflect the reality and allow learners to experiment in a safe environment, is one of the best ways. Here are the stories of two companies who have chosen to teach students with a simulation of the work of
Comcast Cable Communications
NorthCentral Division of Comcast - one of the biggest entertainment in the country and the companies information and communications, specializing in cable TV, high-speed Internet and telephone services - set to ensure that managers and staff throughout the organization's financial acumen needed to make good decisions. A survey company-wide clearly this need - and especially those who were in direct contact with customers for managers
For example, if the client called with a service problem and the staff on the front lines and their supervisors can issue credits to the client. Account in an attempt to resolve this issue. Although this may be exactly what is needed for this situation, I realized that Comcast employees make these decisions did not necessarily understand that the $ 10 credit can require eventually more than $ 100 in the company's revenues to the break-even point. Similarly, the maintenance technician visit to the customer's home could cost $ 50 directly, but the company may have to sell an additional amount of $ 500 in services to cover the costs.
"The lack of financial acumen among supervisors and employees to a large extent understandable," says Marc Fortin, senior vice president of finance department NorthCentral Comcast. "Almost 75 percent of the company's employees are on the front lines in roles such as call center or field technicians staff. They are trained to be good at what they do, but their backgrounds do not usually include a focus on financial literacy."
[determine
Comcast executives and human resources that are needed to the basic approach for the development of business acumen. However, this approach also will need to be quick, engaging and relevant work. Comcast to expand the approach to management of the University's already strong, executives chose to incorporate the high-energy, tailor-made learning experience that will provide "the basics," At the same time, dealing in particular with the terminology and concepts Comcast and strategic imperatives.
they also participated, made educated decisions about products, processes, pricing and more, and saw how these decisions affect financial success. In the end, it became easier for them to make clearer choices day after day.
"The thing that sticks out to the leaders of the front lines, and field technicians, supervisors and call center managers who attend, is the high cost of sales in our work," Sophia Alexander, first curriculum and standards for the division director says. "It's like a bell goes off in their heads when they realize what it costs for us to win what we need to earn to run the organization."
attend educational session it is not mandatory for supervisors and managers. However, there is an unwritten expectation that they will participate in the training business acumen as well as other core programs Comcast University, according to Jan Underhill, the first leading to the Division of NorthCentral skills development manager. This expectation, coupled with the fact that compensation has recently become a director associated with the achievement of specific financial goals, and has kept attendance high.
senior executive support was also an important factor in creating interest and awareness in the field of financial literacy. "Getting people to sign up is much easier when top executives like Mark Fortin strong advocates of the program," says Underhill.
observations were positive resounding. On average, for example, Level 1 was Notes on the business acumen of existing sessions on discovery learning 4.5 on a scale of 5 points. This means that the program has exceeded expectations. Better still, Sophia Alexander, first curriculum and standards for NorthCentral Division Manager, empirical evidence says that new ideas and knowledge have made a difference. For example: Indicates
self-assessment • Associate that financial literacy has increased by 25 percent at least a result of the training acumen.
• After the training, there was an increase of 20 percent in the participants' ability to use basic financial terms and concepts in action.
• Almost 45 percent of participants in the supervision report that they use common sense knowledge in daily communication with staff and colleagues.
"Some people, especially in large companies, feel like there are open accounts. They think ... I do not own a company. It's not my problem. Someone will pay the bills. But in today's environment, with some very large companies in trouble, and everyone must be part of the solution. acumen managers and staff for education helps the company as a whole, but it also helps the staff. it's about self-preservation to some extent. "comments Fortin.
Southwest Airlines
Southwest Airlines is one of the profitable companies constantly to make "business literacy" an essential component of its training programs for the staff. Every employee has a deep understanding of what a new client is, and has entered a new company. Staff also knows how the loss of customers could affect the business.
According to Elizabeth Bryant, leadership training director at Southwest Airlines, "Our training covers how financial ratios such as return on assets and various margins are determined. Knowing that managers and supervisors team and all employees have this knowledge enables the company's leadership to provide detailed financial reports and explanation of the difference that you need margins to be. management can make a more in-depth for all employees, and employees to understand what are the goals. "
he
Bryant," because we do not miss the little things, because we keep track of all penny and every activity, and we've come all to know the importance of every cent. However pennies in hand, and to highlight the idea of compound interest, for example, how the small savings help us by the end of the year, and how small amounts of waste can add on the contrary, even