Merge's Blog

Develop your staff in financial literacy and you will build your future leaders

Today’s blog post is Strategy #21 in our ongoing series on specific ideas to develop your staff as the current and future leaders in your organization.  And it is: regularly discuss and explain your financial results.

Discuss and explain your financial results regularly

If you are going to develop your staff as the future of your organization, then they need to understand the numbers.  Where are your revenues coming from?  What are you spending on?  How much do you pay in taxes? And what is left over for profit?  Even if you are a not-for-profit entity, your people still need to know what your funding sources are, where the funds are being spent, and whether and how you are in a surplus or deficit position.  If you are going to grow and develop your staff, then they need to be financially literate; they need to know about the dollars and cents.  And one of the best ways to build this financial literacy in your people is to regularly discuss and explain your financial results.

Do three things to develop your staff in financial literacy

At minimum, to develop your staff in financial literacy, you should be doing three things.  First, share your organization’s and department’s financial results monthly.  Now don’t just mass-distribute the financial statements; most people find them overwhelming and they’ll likely get ignored.  Instead give your staff simplified versions that report just on your company’s critical numbers.  Present critical numbers for your whole organization, and for specific departments.  What are critical numbers?  They are the key measures that define your department or organization.  So for example, it could be #’s of widgets sold or produced, or % of complaints resolved, or safety statistics.  It depends on what your department or organization does.

Second, clearly connect what your individual employees are doing to the metrics that you are reporting.  So if your staff are on the production line, then # of widgets produced is clearly connected to what they do.  If your staff handle the customer service function, then % of complaints resolved is clearly connected to their day-to-day activities.  I think you get the idea.

And third, open dialogue with your employees about how the results can be improved in the future.  Ask the questions – how can we increase production, what specific fixes do we need to make to reduce complaints, what needs to be done to reduce lost-time incidents?  What is key here is that you involve your people in coming up with the answers.  Because when employees can see how they can contribute towards improving the financial health of the company is when you’ve really achieved your goal of developing and growing your employees.

If you want to develop your staff, then they need to be financially literate about your organization, and it’s up to you to take the steps to make it happen.

So what are you doing?

So tell me about your organization and/or department?  Are you regularly sharing and talking about your financial results?  What are you doing to keep your people engaged and interested in the numbers?  Please … share your approaches so we can all learn from them.

I’ve been talking all year about specific ideas to develop your staff.  Here are links to the rest:

 

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