In our home, my wife runs the finances. She pays the bills, sets the budgets, and saves the money. I am completely removed from this process—that is, until I want to spend some of the money.
Too many employees have a similar financial arrangement at work. Someone else pays the bills, sets the budgets, and saves the money. Employees are happy to disengage from this process; but understanding how your company makes money and its strategy for generating more—known as business acumen—is not just the CFO’s job, it’s everyone’s job. At least, it should be.
At Acumen Learning, we teach courses in finance, strategy, and business acumen to professionals from all over the world. We’ve found that 95 percent of employees either were never taught their company’s business strategy or didn’t understand the material when it was taught. This is a major cause of disengagement and a serious problem among businesses. How can anyone play a critical role in the money-saving and spending process if they don’t understand the bigger picture?
When employees don’t understand their company’s strategies, they lose an essential connection to their role. Instead of seeing themselves as a key piece of the puzzle, they see their decisions and initiatives as isolated and insignificant. Patty McCord, former chief talent officer at Netflix, said, “When I look at companies that are moving fast [and] that are really innovative … it’s because they’re collaborative. The best thing that we can do is constantly teach each other what we do, what matters to us, what we measure … so that we can all drive towards achieving the same thing.”
CEOs desperately need employees who are engaged in this financial relationship and intentionally affect the bottom line. Jeff Weiner, CEO of LinkedIn and one of Glassdoor’s Top CEOs, listed business acumen as one of the five top skills he looks for in a new hire. Research from Cisco found that 93 percent of executives listed business acumen as “the number one skills gap in IT today. CIOs are already changing their training and hiring strategies … to overcome this shortcoming.” Whether they’re in HR, operations, or legal, having business-savvy employees ultimately results in self-started initiatives and practices that will make the company more successful.
Growing business know-how doesn’t require a master’s of business administration or a desire to become the next CFO. There are many ways to build your business acumen, and we’ll share one of the best: Listen to earnings calls as a team.
According to an Acumen Learning survey, 76 percent of people recognize that their executives communicate financial performance at least once a quarter, but 25 percent of respondents have never listened to their company’s quarterly earnings call. By all means, if your company has a quarterly call, listen to it. If it doesn’t, pick a company that interests you—one from a similar industry, a supplier, or a customer—and listen to the call. Learning the language of business is similar to learning a foreign language. If you wanted to learn Spanish, I’d tell you to take a course and then go live in Bogota for two years. Think of quarterly earnings calls as your visit to Bogota.
Making it a priority to listen to and understand quarterly earnings calls can get people speaking a common business language and create the collaborative culture where amazing teams and individuals actively move the business forward. As the New York Times bestseller Seeing the Big Picture explains, “Simplifying complexity and broadening our understanding of the business enables us to fix present problems, prevent new ones, and take advantage of opportunities to grow.”
As a learning and development leader, you’re uniquely positioned to build business acumen across your organization. You might feel as if you were just abandoned in Bogota, but remember what Seth Godin posited during Tuesday morning’s keynote address at the ATD annual conference: “It’s only when you move forward that you see what happens. Johannes Gutenberg launched the printing press when a large segment of the population couldn’t read, when there were no reading glasses. Many people likely thought it was foolish—that he should have waited.”
Don’t wait. Start listening to earnings calls and teaching your colleagues how your company makes money. If you need help, contact acumenlearning.com.