The importance of business training for managers and employees

The message to the CLO becomes clear and clear. The company's leaders want to match educational proposals with the organization's strategic goals.

It's not an easy challenge. They must ensure that education and communication initiatives strengthen the company's goals. They must help employees understand these goals and develop the skills and motivation to contribute to them.

And at the most basic level of alignment, they must make sure each employee understands how the company makes money. This includes understanding how profitability is prevented, how assets are used, how cash is generated, and how daily actions and decisions, including their implications, affect success.

Development acumen business is essential for business alignment. Consider Southwest Airlines, which was founded in 1971. With 33 consecutive years of profitability, the airline has become widely recognized for the culture and motivation it creates for employees and outstanding dedication to its customer service.

A lot of the industry has suffered during Southwest's growth years, including many airlines that merged or declared bankruptcy. Southwest buys the same aircraft and jet fuel as other airlines, paying its employees competitive wages and benefits. What is the difference?

Unlike some of its competitors, the Southwest management team includes employees in the company's financial results, explains the significance of the numbers, and more importantly, links the decisions and actions of all of them to the bottom line. The airline has an open culture, one inclusion at all levels, and employees understand their roles in providing great service and keeping costs in line.

There are certainly other factors that contribute to success in the Southwest, but it is hard to ignore the positive impact of an approach that develops the business sense of all employees and managers so that they can contribute to the airline's # success.

Educational Challenge

Unlike those in the Southwest, private individuals and managers in many organizations today were not educated about the big picture of their businesses. They have narrow focus in their departments and their work functions, and are unable to establish the connection between their actions and the company's success. Multiply by hundreds or even thousands of employees, this lack of understanding – Lack of proper business sense – means that too many decisions are made and become too many actions that do not correspond to business objectives.

How can coaching help bridge this knowledge gap? For many companies like the Southwest, implementing learning programs designed to develop a strong foundation of financial literacy and business acumen has made communication of financial results to employees easier and more efficient.

Business Acumen: A Definition

Very simple, acumen business is the understanding of what it takes for business to make money. It involves financial literacy, which is an understanding of numbers on financial statements as well as an understanding of the strategies, decisions and actions that affect these numbers.

Someone with financial literacy, for example, can "read" the income of a company. This employee or manager will understand the terminology (revenue, cost of goods sold, gross profit, profit, etc.) and what represents the numbers (ie gross profit margins include total sales / revenue minus the cost of goods sold).

With the business sense, the individual will be able to "interpret" the same income report, keeping in mind how strategies and company initiatives have influenced the numbers during certain time periods.

Consider a simple comparison: in football, it is necessary for players to know how the game ranked as well as how to play the game to change the score . In business, financial literacy is an understanding of "score" (financial statements) and business sense is to understand how to influence it (strategic actions and decisions).

Ask the Right Questions

When business exposure spreads through an organization, employees and managers start asking questions. These questions are directed not only at the organization, but also at themselves and their departments – questions about processes, products, systems, personnel, etc., which may lead to decisions and actions.

Business thinking helps everyone understand that it is not enough to ask, "How can we cut costs?" Egypt says, "We need to increase sales." In a deeper excavation, workers with higher levels of business sense will ask questions that take into account the far-reaching impact of potential decisions and demonstrate greater ability to link performance to results.

Questions that may come to the root of disappointing operating relationships:
• Did production costs rise? If so, why?
• Have we changed prices? So how did this affect our margins?
• Are there competitive issues that affect our performance?
• Has customer requirements changed?
• If our costs per unit produced increase, can we better control our production or service efficiency?
• Is there a way to produce a larger product volume at the same price?
• Can we raise prices, yet provide value to the customer and remain competitive?

When the questions become more specific, the right decisions can be made.

Business Thinking for Managers

Managers at all levels need a high degree of business thinking to do their jobs. Every day they make decisions about employees, projects, processes, expenses, customers, and more – decisions that are very much rolled out to larger organizational results. Managers who make these decisions by looking at a departmental lens only, with limited understanding of how these decisions affect the financial results or how they relate to the organization's goals and objectives, operate in silos that can be very damaging to society.

Managers are often promoted to their positions of responsibility because of their "technical" expertise. They were successful customer service representatives, big salespeople, innovative researchers or great IT professionals. Now they are entrusted with making decisions, budgets, projects and people. They often do not have financial literacy, nor have they developed a higher level of business perspective. Over time, especially if they are climbing the administrative ladder, they may develop these. Or they do not.

Organizations need managers who work within the management team, taking into account their results as well as the results of the entire company. Therefore, more and more organizations have built financial literacy and business acumen for managerial qualification requirements and have integrated into management programs.

Business Vision for Workers

Although there is little debate about the need for managers to develop business sense, organizations sometimes ask for the need for understanding this at the employee levels. But frontline donors, those directly involved directly with the production or customer service, for example, take actions every day that impact on business results.

Consider the product-driven salesperson, the service representative dealing with an unhappy customer, or the maintenance person who notices the problem. The actions each takes may erode profit margins, lose a good customer or allow safety problems to escalate. Without understanding how their actions affect the company's results, they may not have the context to consider alternatives.

Many organizations have determined that financial literacy and business acumen are not just for managers. They decided to develop a company of people who understand the business; Who knows what the return on assets and return on investment mean; Who knows how inventory cycle rates affect the results and the importance of positive cash flow; Who see the connection between the company's financial success and their health benefits, 401 (k) plans and more. In other words, they need people who understand the "business" of the business. Collins says: "We found no evidence that" good-big "companies were better or better, so the key was not found in better information, But in turning information into information that can not be ignored. "

With an increased level of business senses, managers and employees can better interpret the information, which makes the relationship between their actions and the results of the company.

Another Reality of the Business World of the Day

The results of a public company are well known at the end of each quarter. Analysts, investors, communications, employees – everyone has access to the financial results of the company. With a significant focus on accounting overproprieties over the last few years, senior management has become very aware of the need to provide accurate and accurate financial information. And employees have become much more likely to wonder about these numbers. "Is my girlfriend honest, do you tell the whole story?"

Without a basic understanding of financial results and the ability to interpret them, employees may be suspicious, very, disconnected. Disconnected workers, in turn, adversely affect productivity and profits.

CEOs of public companies, then, must ensure that managers and employees are able to understand the numbers and have confidence in them.This means effective business education as well as continuous and open communication from above.

39; K. Welch & Said in his book Straight from Gut "Getting any employee¡¯s brain into the game is a huge part of what SEO work is all about … nothing is more important."

As we become a nation of experts, armed with new information technologies and enterprise-wide operating systems, it becomes easier for managers and employees to be immersed in the beauty of jobs. They may be very few regarding the goals and responsibilities of other team members, departments or divisions.They may lack the motivation to invest a

Organizations that develop business appearance provide a clear vision and overall context in which employees can work, creating an environment that is more likely to break down internal barriers, there is less waste and less ambivalence. Their role and impact on business results, and are more likely to believe that their efforts really matter.They are more likely to think like a business owner.

Important as Owner

To succeed, business owners must be able to helicopter Over everyday problems see the big picture. They must understand how the parts of the business fit together to affect profitability and cash flow, and they must be able to assess the risks and benefits of potential decisions. The best business owners learn the numbers, ask themselves tough questions, analyze their mistakes and take action in the decline.

To really understand the business, the owners need to understand how the business makes money – in other words, how it produces sales, cash profit . Organizationally, they know it is about People, Processes and Productivity . On the customer front, it is about Satisfaction, Fidelity and Market Share . Ultimately, any action you take and any decisions made in each of these areas will affect sales, profit or cash.

When managers and employees begin to think like husbands, they also look at the big picture, understand how all parts fit together, and evaluate risks and rewards. They understand, like husbands, how society makes money, how it stays in business and how it contributes to its success.

The benefits of an organization of engaging managers and employees in this type of ownership thinking are obvious. So how can a company develop the business sense of its people?

Business Development Sense: Two Stories

Entrepreneurs are often forced to develop business senses on their own. They are on their hands with their business and have to make all the decisions as they go together, whether good or bad. They either learn from their mistakes or fail.

This is very different for managers and employees in the organization.

They are not involved in all aspects of the business, and they make decisions primarily in their areas of responsibility. Because seeing connections is not easy, they need to learn in a different way.

Books and lectures can help. But the business sense is experientially developed. Learners must be able to analyze situations, ask questions, discuss problems with other learners, consider options, make mistakes and see results.

Although there are many ways to achieve this experiential learning, many companies have found that simulations, which reflect reality and allow learners to experience a safe environment, are one of the best ways. Here are the stories of two companies that have chosen to educate their learners in business simulations. Comcast Cable Communications

Comcast's NorthCentral division – one of the country's largest entertainment, information and communications companies, specializing in cable television, high-speed Internet and telephone service – to ensure that managers and employees through the organization had the financial darkness required to Make good decisions. A company-wide survey clearly demonstrated this need – especially for employees who were in direct contact with customers.

For example, if a customer communicates with a service issue, Frontline employees and their supervisors can issue credits to the client account in an effort to resolve the issue. Although this may be exactly what it takes for the situation, Comcast realized that hiring these decision makers should not realize that $ 10 credit can very well require more than $ 100 in revenue for the company to break even. Similarly, a customer service technician's home visit may cost $ 50 directly, but the company may need to sell another $ 500 services to cover the cost.

"The lack of financial disclosure between supervisors and employees was deeply understood," says Mark Fortin, senior vice president of finance at Comcast's NorthCentral division. "Nearly 75% of the company's employees are in the front line in positions such as call center personnel or field technicians.

Comcast Human Resources lecturing has determined that there is a basic approach to developing business acumen.This approach should also be fast, fascinating and relevant to work. Its management has been strong and Comcast University, the principals chose to integrate a high integration, experience and learning experience that will provide the "basics", and at the same time, a specific deal with Comcast terminology, concepts and strategic needs.

When they participated, students took decisions on products, processes Pricing, etc., and they saw how these decisions affected financial success, and Bess "The thing that infects the front leaders, the field technicians, and the supervisors and managers of the participating telephone center is the high cost of sales in our business," says Sophia Alexander, Senior Director of the Division's Curriculum and Values "It's like a bell ringing in the head when they understand what it costs us to earn what we need to earn to manage the organization."

Attendance at the learning session is not mandatory for supervisors and managers. Also other programs of Comcast University core, according to Jan Underhill, senior director of leadership development Pit NorthCentral Division. This expectation, coupled with the fact that compensation manager recently tied to meet specific financial targets, has maintained high attendance.

Senior executive support was also an important factor in generating interest and awareness around financial literacy. "People can sign up a lot easier when top executives like Mark Fortin are strong supporters of the program," says Underhill.

positive feedback in a positive manner. On average, for example, level 1 feedback on learning discovery based business sessions has been 4.5 on a 5-point scale. In other words, the plan deviated from expectations. More than that, says Sofia Alexander, senior director of NorthCentral's curriculum and values, is the empirical evidence that new insights and knowledge have made a difference. For example:

• Self-evaluations of participants indicate that financial literacy has increased by at least 25% as a result of business sense training.
• After exercise, there was a 20 percent increase in participants. The ability to use basic financial terms and concepts on the job.
• Nearly 45% of participating participants report that they use their business sense knowledge in the daily communication with staff and colleagues.

"Some people, especially large companies, feel that there is an open-ended notebook, companies in trouble, everyone has to be part of the solution, education to feel business for managers and employees helps the whole society, Southwest Airlines

Southwest Airlines is one of the consistently profitable companies that makes "business literacy" a central component of its employee training programs. Every employee with a solid understanding of what a new customer, and new revenue, means to a company. Employees know Also how the loss of a client can affect the business.

According to Elizabeth Bryant, Director of Leadership Training at Southwest Airlines, "Our training covers how financial relationships are determined Such as a return on assets and various margins. Detailed financial reports and explain to teams where margins should be. Management can talk more deeply to all employees, and employees understand what the goals are. "

Bryant added," Because we do not waste the little things because we follow every penny and every activity, we all learned to know the importance of every cent. For example, how little savings helps us by the end of the year and how small amounts of waste can on the contrary add up to hurt us. "

Consider the importance of a major operational index for the aviation industry – the operating cost per seat. This is how much it costs an airline to fly one mile. All operating costs are divided by the total number of appointments of all seats flown for a certain period, Was a seat or not.) Many of the industry had a cost per kilometer or more than 10 cents. The cost per trip per seat is about 6.5 cents. The low price per session in the industry nearly 25 years ago was just over 5 cents.

This is a number of factors that lead to success, but one of the key influences is Southwest's training in business acumen, and this training ensures that employees will be able to (19659002) • How challenging is it to ensure sustained profitability, earning
• The importance of using the child (1959) • Impact of individual actions and bottom line decisions

In other words, Southwest invests in training to help employees think like business owners. This, in turn, produces real results, such as the low cost regularly for each seat.When the Southwest Learning Team decided to implement a business simulation to compute several years ago, there was a preliminary concern as to how well it was getting.

Bryant explained, "Some people, especially those without financial training, were nervous about the subject, but we put the need for business literacy training as another way to prove that we really care very much for every employee.

Southwest Airlines, according to Bryant, has never been fired – a rarity in the aviation industry. As their employees understand the challenges of business, they appreciate the importance of making smart decisions every day.

Bryant concluded that discovery and learning techniques in a strong business simulation work well in Southwest culture because of the group's orientation. "All the participants learn that they can not make all this happen," Bryant said. "They learn that they have to look beyond them, act and think like husbands, and understand that our efforts and financial results here are not just for career, but for a cause." It is a reason philosophy in this direction to provide a low-cost, high-quality service that gives people the opportunity to travel. Our success in achieving positive results translates into individual opportunities to work, grow and continue to think about innovative ways to improve our business and serve our customers.

The Classroom Advantage

The two companies chose to develop the business sense of managers and employees through a classroom-based simulation, led by instructors on the company's website. In dealing with this issue in a "living" session where they can leverage the power of:

• Shared knowledge and experience: Learners bring
• Competitive team: Teams compete against each other and enjoy competition. Company: The common interest of learners in their company's financial and strategic issues enables greater analysis and depth of discussions

• Learning and Comfort Prevention: Students who are uncomfortable with the financial issue find themselves playing in the comfort of a team environment.

Although there are a number of educational approaches available to organizations in the field of business acumen, אימון מבוסס כיתה, המפגיש צוותים של לומדים יכול לעזור להבטיח למידה מתרחשת כי קשרים לעסק נעשים בדרכים פעולה מיידית בחזרה על העבודה.

השורה התחתונה

יותר מתמיד, חברות מצליחות יצטרכו להתמקד בפיתוח החוש העסקי של מנהלים ועובדים. חברות אלו יבינו שכאשר האנשים שלהם מבינים את המספרים, כאשר הם מבינים כיצד מחלקותיהם תורמות ליעדי החברה וכאשר הם רואים כיצד החלטותיהם ופעולותיהם משפיעות, הם יתחילו לפעול כחלק מ צוות ולא בסילו מחלקתי או אישי. וגם חתיכת קריטי של הפאזל יישור תיפתר.

עם החוש העסקי העצום, חברות יכולות להיות בעל הנכס חזק, משכיל, ידע ומוטיבציה עובדים. עם הנכס הזה, חברות אלה יהיה המיקום הטוב ביותר להצליח.

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