Watch the faces of your employees the next time you tell them they need to learn business literacy. You’ll likely see blank stares as they imagine themselves adrift in a sea of numbers, ratios, and acronyms.
It’s true that financial acumen training doesn’t get much love from the folks in organizations who would benefit from it most. But we’re on a mission to change that. After all, what’s more energizing than recognizing how the work you do impacts the organization?
What is business literacy?
Business literacy, also known as business acumen, is knowledge of how the independent functions that make up the firm’s business—financial, accounting, marketing, research and development, services, and production—come together as an enterprise. Properly trained employees use business acumen within their independent functions to make good decisions that maximize organizational success.
What does business literacy look like at an organizational level?
A workforce can be called business literate when all employees have a functional knowledge of:
- Business goals and objectives (measurable and global)
- The way success (including ROI) can be measured
- Financial statements (i.e., income, cash flow, and balance sheet)
- How their day-to-day work affects the organization’s goals and objectives, scorecard measures, and financial outcomes
In a nutshell, the goal of business acumen training is to give employees the framework and context to develop their competence and confidence to make decisions that maximize impact for the business.
How important is it for your employees to understand your entire business?
Surprisingly, lack of business acumen is a challenge that exists in even the most high-performing organizations. Without a business acumen lens, employees are unable to see or understand the impact their work has on the larger enterprise. Business acumen training solutions give employees a practical understanding of how each decision they make can impact the business and their future.
Imagine for a minute that everyone in your organization, from housekeeping to the CEO, has a concrete understanding of how the decisions they make contribute to your bottom line. It’s a feasible vision, and we’ve seen companies make tremendous strides by equipping their employees with such an understanding. Let’s have a little fun with the math:
Let’s say your company has 5,000 employees and that every employee makes a decision that can save the company $1 a day. That translates to $1,825,000 in a single year! If your business typically returns a net profit of 10%, that means your business would have to generate $18,250,000 in revenues to have the same impact. Alternatively, imagine how much that $1,825,000 can return to the business over the next decade: more than $6,000,000 at a 12% return on capital.
And this is a conservative scenario! Imagine if every employee committed to making a daily decision that saves your company not just $1, but $5, $10 or even $100 a day.
Employees adopt this sensitivity only once they’re equipped with a big-picture enterprise view of the organization and understand the drivers of both profitability and cash flow.
Finding the fun in business literacy training
Adult learning theory says that retention increases when learners are engaged and able to immediately apply what they have learned to challenges and pressures they’re facing right now. Despite what employees may think, it turns out that excitement and fun are not such difficult goals in business literacy training. The trick is to make it real and relevant. At Blueline, we do this by:
- Focusing on the story, not the numbers: See all those numbers on the balance sheet? Every one of them is a story. Behind each one is an event, a decision, a problem, and/or a human drama that plays out in the various functions of your organization. Tell the story well, and that squiggly upward-trending line on the graph is suddenly imbued with urgency.
- Changing the point of view: A lot of business literacy training is written from the high-level perspective of an accounting professor. But the employees’ line of sight (and influence) begins at their workstations. Make the connection between the job and the financials first. Once you’ve established that critical context, you can lead the learner into the deeper waters of financial acumen.
- Making it fun: Business literacy training is much more palatable when flavored with high-engagement learning techniques such as gaming principles, compelling storylines, and plenty of opportunities to engage with colleagues.
Are you looking for a way to quickly impact the bottom line?
Contact us today to discuss how we can turn your employees into advocates for your bottom line.