The Keys to Designing a Great Business Literacy Program
You mention the words "business literacy," and your employees get the shakes. Maybe they've been out of school awhile, or they regard numbers in the same way a mouse regards a python. Some companies' training programs don't help matters much. The teachers swamp employees with unfamiliar terms. They drone on as if both they and the students were back in high school. Sound familiar?
It doesn't have to be this way! In fact, teaching and learning business can be interesting, often fun, sometimes hilarious. And the learning can be reinforced so that it sticks. As you design your program (or modify it for the next go-round), keep these five keys to success in mind:
Teach business, not just numbers. Remember, your employees aren't learning business to pass a CPA exam. They're learning so that they can understand what their company is about. How it makes money. Where it's headed. How its managers measure progress. Business is exciting! It's where you match wits with the marketplace -- and where, if you're successful, you can create real wealth.
So convey a little of this excitement. Pick some stocks in your industry and follow them. Get a senior manager to come in and talk about the big picture. People will be curious about the company's market, its strategy, its competitive advantages (or disadvantages), what it's focusing on over the next couple of years. They'll want to know what's in store for them. Without that context, they won't have any reason for caring about the numbers.
Teach numbers, not accounting. When you do get to the numbers, focus on the ones that matter to your company, not those that appear in an Accounting 101 textbook. Employees rarely need to know about debits and credits or how to do an adjusting entry. But, depending on the company, they may very well need to know exactly how production efficiency is calculated, or why asset days matter, or how the purchase of a new computer system will affect the income statement and balance sheet.
The purpose of a business literacy program is to give everyone in the company a common language, so they can understand the numbers that measure their performance and talk intelligently about improvements. ("How are we going to get that variance on the cost-of-goods-sold line down?") Only some of the terms and concepts in that language must be borrowed from accountants.
- Establish the line of sight. Fred Plummer's drill-down sheets are terrific. Plummer is the guy who developed some of Amoco Canada's training materials. One tool was simply a bunch of charts showing exactly where employees' various work activities showed up on their departmental budgets, exactly how those budgets affected their business unit's income statement, and so on up the corporate ladder. This is another indispensable part of the context. If you don't make the connection between jobs and the financials, "the business" will forever remain an abstraction, separate from everyday work.
Process matters! Denise Bredfeldt of Springfield ReManufacturing Corp. tells the story of the guy who kept urging his employees to lower their scrap rates. He deluged them with numbers: cost of materials, production efficiency, and so on. But they didn't get it. Finally he called his employees into the break room. When they got there, they saw the boss -- with an old couch and a chain saw. Dumbfounded, they watched the guy fire up the chain saw and lop off about a third of the couch.
That, yelled the boss over the din, is the cost of materials that actually go into our product line.
Then he lopped off another third, for labor.
Lastly, he shut off the saw and pointed to the remaining third. You could hear a pin drop.
"That," he said, "is how much we're wasting in scrap."
"He pretty well had their attention by that point," says Bredfeldt. So it is with business literacy. Drama, fun, creativity, and interaction go much, much farther than any number of dull classroom lectures.
- The most powerful reinforcement. Seasoned managers understand their numbers not because they went to business school but because they use the numbers every day. Employees who learn the basics of business are no different: If they get an opportunity to see and use the numbers regularly, they'll remember them. That's why you can't separate business literacy training from the other parts of your management system, such as tracking and communicating key numbers.
The bottom line is this: People remember what they find interesting and useful. They remember what they need to know to do their job. If what they learn in a business literacy program meets those criteria, it'll stick with them.
Copyright © 1999 Open-Book Management Inc.