What do you think might happen if your employees approached their jobs as if they owned the organization?
If you’re intrigued by the business benefits of increasing the financial intelligence of your employees, here is a checklist you can use for implementation.
1. START AT THE TOP
Great leaders always go first. Any initiative that will yield significant and sustainable results has to start at the top.
2. SHARE FINANCIALS
Sports teams keep score, and players are more engaged when they know whether they’re winning or losing. Employees are more enthused when you share financials with them. Break the budgets down into digestible and relatable targets for teams and individuals.
3. CELEBRATE SUCCESS
What you celebrate tends to get repeated, so celebrate success. If you share financials, but don’t acknowledge success, employees will not see any point in going the extra mile.
4. CREATE VISUAL SCOREBOARDS
Very few people have an appetite for thoroughly understanding financial statements. We have noticed that most employees engage around visual scoreboards that are quick and easy to read. A useful test of an effective scoreboard is this: Can someone glancing at it know the score and identify whether they’re winning or losing within 10 seconds, or preferably less? Colors can be great; red, yellow, and green work well. So do arrows (up, sideways, or down). Even emoticons can be visually interesting (smile, concerned, or sad).
5. MAKE THE GOAL DIGESTIBLE
Department managers should break the income and/or expense budget into manageable units. What are we shooting for this week or this month? Even better, break it down into specific and tangible items.
6. EMPHASIZE BEHAVIORS
Human beings help deliver business results, especially in a service industry. Think through the three or four specific behaviors you want employees to do, not do, or do differently to help achieve your financial goals, and emphasize those.
7. EDUCATE PEOPLE ON THE VALUE OF A DOLLAR
A wise person once said that a dollar saved is a dollar earned. We like to say it’s more than that. If your net profit (income minus all expenses) is 5 percent, that suggests that for every dollar of income, you hold onto just 5 cents at the bottom line. This is very powerful information to share with your team and a very engaging way of rallying people around saving costs.
8. SPEAK THEIR LANGUAGE
Organizations that get superior financial results educate employees at all levels on the language of business. An effective way to do this is to relate business finances as often as possible to personal finances. The principle here is that employees are more likely to care about your business if they can relate it to their own finances.
Employees understand income and expenses, as they can relate those to their paychecks. They have assets that they know they have to look after. They also have liabilities they want to minimize, and they know they need cash to be able to pay those down as quickly as possible.
9. TAP INTO THE INTREPRENEURIAL SPIRIT
The intrepreneurial spirit is the concept of employees working as if they owned the company. If you can inspire this in your staff, the ideas will flow and your profits will soar. Ask them what they would do if it were their business. Ask for their input whenever practical. Incentivize them around driving income and reducing costs—without negatively affecting the quality of service.
10. STICK WITH IT
Organizations that focus on business financial intelligence in the good and bad times are much better equipped to ride out the bad times and “make hay while the sun shines” in the good times. Yet, most organizations will mount efforts to control costs or to drive income only in the bad times. Such organizations may get minimal results for a short period, but will not yield the very significant and sustainable results we have observed from organizations that stick with this principle in the best of times as well as in the worst of times.
This checklist should get you started. We have found that 99 percent of people come to work with a desire to do their very best, and great leaders know how to bring that out. One way of doing so is to invest in their financial intelligence. Communicate everything you can to your employees, regardless of their level within your organization. Once they care, there’s no stopping them.