CFO at Avanade, overseeing global investment strategy, accounting, budgeting, tax, internal audit, financial planning and treasury.
What if you could compensate your employees above the market? What if you could invest in future growth opportunities without worrying about affordability? What if you could drive market-leading shareholder value or growth rates in your business? Or give back to society, investing in your communities the way you invest in a new product?
There are companies that can do all this and more. How do you get to a place where investments like these make business sense? My thesis: companywide financial literacy. This involves:
• A strong set of financial fundamentals for your specific organization that everyone in your company knows inside and out, from your CEO to the newest class of interns.
• Strong financial discipline up and down your organizational chart and across all parts of your business — not just the finance department.
• Financial literacy and attention to your company’s financial progress that is an integral part of your company culture.
Every person in your company should be able to answer these questions: How do we make money? How do we grow revenue? How do we drive sales? No matter their role, everyone needs to know how your company makes money and how what they do, as individuals, contributes to your company’s success.
Build From The Basics
I am a strong proponent of making financial literacy part of our general educational curriculum from an early age. If I had my way, we would teach Budgeting 101 by middle school at the latest and then continue that education into high school and beyond.
But as of now, leaders can’t assume their employees have even basic personal finance literacy. That’s why I suggest companies add a business finance curriculum to their required employee training. Imagine the impact on your business results if every person in your company made each daily decision informed by a firm grounding in how their role contributes to the success of the company.
What if that path to financial literacy started the moment a new joiner walked in the door? I suspect quite a few of us include some basics about the business side of our company during new employee orientation. I also suspect many of us never talk about it again.
Empower Good Financial Decisions
To give everyone a solid initial grounding, consider the advantages of an onboarding module that starts with the fundamentals of business, bringing it all to life with examples specific to the company: how the different parts of the company make money (creating goods, perhaps, or selling services), the profit margin for each activity, the importance of invoicing on time and efficiently collecting what is owed.
But don’t stop there. I don’t know about you, but onboarding at my company is quite intense already. Our new joiners receive so much new information over the course of several days, it’s a tall order trying to remember it all. So even a solid initial grounding in the business side of our company can only be the start of an ongoing curriculum.
A follow-up refresher training module six months into an employee’s tenure is the perfect way to cement their initial education and emphasize that financial literacy is a valuable attribute that will help them grow their career as they create a track record of sound business decisions.
From there, financial literacy modules can become part of a company’s schedule of required annual training. Employees can receive deeper levels of information, customized for their specific career trajectory.
Make Financial Literacy Part Of Your Company Culture
One example of this type of commitment to financial literacy at work: Often, before the pandemic, when I was traveling to our offices around the world and meeting with people across our company, someone would pull me aside and ask, “How can I help drive revenue growth? How can I help us make more money?” When you find someone eager to learn more, you want to encourage them.
During one visit, I attended a presentation about some of the innovative work one of our groups was doing to help clients create show-stopping customer experiences. One person raised her hand and said, “That’s great. But how do we get our clients to pay for it?” I loved that she asked that question and sought her out afterward to compliment her.
Her question demonstrated that even though she is in a creative role, she was thinking about her group’s impact on the business from a larger, well-rounded perspective. She and I continue to connect every quarter and learn from one another. She has educated me about the pressures of some of our internal metrics and how there can be unintended consequences, and our discussions have given me ideas about new ways to look at things.
The ultimate goal of a commitment to companywide financial literacy is an engaged, enthusiastic and informed workforce that makes smart business decisions. The increased profitability that results from those good decisions gives companies opportunities for additional investment, employee benefit programs and corporate citizenship initiatives. Financial literacy has the potential to turn “what if” aspirations into reality.
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