Why. . .Why. . .Why? The Need to Understand.

By Richard Hohmann

At the most basic level of alignment, companies must make sure that employees understand how the company makes money. Employees need to understand the basic financial facts about not only how the company makes money but how revenue drives profitability, and how cash flow can inhibit growth or how cost reduction can impact success.

Since mid-level managers are the ones left holding the bag in terms of communicating with the workforce and we better make sure that our managers have a high level of business acumen so that the employees can have confidence that the decision making process is based on something more than a gut feeling. Understanding the financial thread that ties everything together in the company better not only be understood but communicated to the employee. The engaged employee wants to know why. Why did we decide to do that, why did we layoff people in our most productive department, why aren’t we advertising in the Wall Street Journal? People want to understand and the best way to get them to understand is to talk the talk – business acumen.

Workers just might start to understand how difficult it is to be successful in reducing costs when healthcare costs have risen in double digits for the past five years, fuel costs have doubled, and fortunately have come back down to a reasonable rate. People need to understand that their performance in their role directly affects the success of the company.

Let’s start talking to and training our Middle Management and employees about Business Acumen, Decision Making, Problem Solving, and basic finances. Provide a real foundation for not only communication, but for action plans and for people development that leads to organizational effectiveness.

It is really getting rough out there and you need to keep your key employees informed. Your employees count on leadership to be the visionary and they want to know what you see as well as what they are reading in the newspaper or hearing on the TV. Now is the time to communicate that the strengths of your people make the difference in organizational effectiveness. We all need to improve our skill-sets and competencies when times get rough but we must understand why we need to do that.