Written by Tim Wat.
For more information or to contact Tim, email him at Tim.Wat@GRITTBusinessCoaching.com.
As a business professor, I wholeheartedly champion the value of a good business education. And I’m a real-world practioner, not a life-long academic – I enjoyed a 20-year career in executive leadership before earning my college degrees.
I know that success in business does not require a college education. It requires courage, intelligence…and a little dose of luck and timing. I often tell people business success simply requires learning the rules of the game – like playing chess, team sports, or any complex activity with interrelated rules and consequences.
Many of us learned the rules in the heat of battle. Some of us had wonderful mentors, bosses, and colleagues who helped us along the way. And all of us benefit from life-long learning. When it comes to your people, we believe everyone in your organization needs business literacy.
What do we mean by business literacy? Jill Carpenter, in The Open-Book Management Field Book, describes business literacy as, “educating all employees about the critical financial numbers and ratios that measure and drive performance in their company; they must know, individually and as a team, how to influence those numbers positively; they must connect their day-to-day thinking and actions to how their company makes money.”
We are not suggesting your employees need to become accountants. Nor are we suggesting that every confidential number should be laid bare to every employee. But I am advocating for education and training to teach your employees how your company makes a profit and generates cash, and how their work and contribution influences not only their department but the entire company.
Consider providing a practical business education to be investments in your most valuable resource. You are committing to building up your people in tangible, permanent ways. Information is power, and you are entrusting them with the crucial information that defines one of the most important parts of their entire lives – their career.
Your people will learn how to interpret the real numbers, learning which numbers drive results. They will learn how to analyze their performance and how their department impacts the entire company. They will gain insights into how to improve and help others improve.
In short, you are giving them the knowledge and wisdom to think like owners, not employees.
What happens when entire companies become business literate? At PFSbrands, it has resulted in consistent annual growth in the double digits, and employee engagement scores consistently over 90%. To quote Jill Carpenter, it means, “Ordinary people turning their company into fun, financially vibrant businesses.”
This commitment to educating your people often has additional benefits. Hiring in tight job markets is improved because you are offering a life-long benefit few competitors will. Business and financial literacy inevitably get your people thinking about their personal finances, and their personal lives improve as a result. Corporate culture becomes healthier. Transparency around the numbers improves trust between management and labor. Creativity improves. Joy and passion around work increases.
In today’s business environment, teaching your people the rules of the game can often be the sustainable competitive advantage that lifts a company above its competitors. We believe teaching your people business literacy is the greatest investment that your business can make. Truly, a gift that keeps giving.