Great back-to-basics business article

Posted by admin on June 8, 2008 under Leadership, Process Improvement, Uncategorized | Be the First to Comment

Earlier this week, there was a great article published on the Yahoo Finance page, by Ram Charan - nationally recognized management consultant - entitled “The Basics of Moneymaking”.

You know, we all get so caught up in the day-to-day tasks of our business, that I suspect we lose sight of the underlying purpose of what we’re doing in our job. Well, it’s to make money. Period. The primary purpose of a company is to make money for its stakeholders (shareholders, owner, employees, etc.).

Yet, how many times do we stop and consider how our jobs fit into the purpose of making money? Most of us likely had basic accounting classes in college but after graduation, unless we’re working in a finance-related field, we probably gave little thought about the connection between our job and the bottom line. Wasn’t worrying about cash, margin, growth, and return something the corporate leadership was supposed to worry about?

Think about the significant impact we each have on the financial statements of the enterprise - not to mention the impact we could have if we were more tuned into how our actions impacted the bottom line. Consider this - if your annual bonus is tied to the profit of a company, does it make sense that you would do everything in your power to improve that bottom line, and therefore your bonus? Of course!

Corporate leaders also failed to recognize the importance of training their employees about their impact on the bottom line. Perhaps because leaders are so focused on delivering stakeholder value, that they take for granted that their employees do as well. Sorry - but that’s normally the last thing on the mind of a warehouse clerk, R&D engineer, or customer service representative. I have been in 1 company - yes, one! - that educated their employees about reading the financial statements, and encouraging them to take an active role in strengthening the results.

So, what are you waiting for? Read the article for a great review of the basics of making money - Mr. Charan lays it all out in simple terms. Then, employees - consider the implications to your work and how you can make changes to positively impact the moneymaking in your organization. Leaders - you can’t afford to neglect the financial education of your employees. Make a change - start a training program today (you can use the article as a starting point). Challenge each other around the water cooler to make a difference in your organization beginning today.