Joy at Work is not only an idea, but the title of a best-selling business written by the co-founder and former CEO of AES, Dennis W. Bakke.  I first read the book some years ago expecting to find some interesting ideas about employee engagement.  What I found was that and so much more.

In it, the author emphasizes the importance of employees at all levels understanding business basics.  How revenue is generated, why expenses must be managed and most importantly, how profits are generated.  In his opinion, the more team members understand these important matters, the more they begin to behave as partners inside the business while adding to the level of understanding of their own personal financial matters.

The book resonated with me for so many reasons.  Teaching a basic finance course to graduate students in Integrated Marketing at New York University has brought the need for this type of training into sharper focus.  While these are not business students per se, their lack of business and financial acumen is often surprising. 

In the course, we focus on the basics of financial reporting which I related to their personal finances.  For example, a P&L is really their checking account.  Money comes in (income), we pay the bills (expenses), and we hope there is money left at the end of the month.  If there is, we are happy because there is a profit.  If not, we have a short-term financial problem (a loss).  When this happens, we may have to make a trip to the bank and when we get there, we do one of two things; we take out our money (from savings) of we take out their money in the form a short-term borrowing, line of credit or loan.  In either case, it costs us money. 

The balance sheet discussion covers the importance of effective banking relationships, managing credit and borrowing, managing cash and the difference between “bad debt” (high-interest credit card balances) and “good debt” (borrowing strategically to invest in and build the business).  Calculating simple installment interest is a first-time experience for many of these students.

How about your employees?  Would learning more about finance and business improve their approach to work and the contribution they could make?  

We worked with a business owner who wanted his employees to gain a better understanding of where business expenses went and why it is so challenging to manage to a profit.  We drew a pie chart and on a percentage basis, showed the different categories of expenses but didn’t label them.  Instead, we asked the employees to guess. 

The largest percentage (or slice of the pie) the employees guessed was profit.  “That’s you, that’s the money the business makes each year”. They were surprised to hear that no, in fact “that’s you, payroll and related expenses.”

With each category, the employees guessed that must be profit, but no, it was outside purchases, rent, etc.  Finally, there was one narrow slice left.  Exasperated, the employees’ response was to ask, almost in disbelief, “that’s our profit?  We go through all these things, all of these efforts and expenses to generate that?”

We hear a lot about employee training which usually involves helping team members perform a specific job function better.  What if we taught them about basic business, commerce, finance and what it takes to generate a profit?  The payoff for them and for the business might just bring more joy to everyone.

For more information about basic financial training for employees at all levels, contact me at joe@ajstrategy.com.