This is a note especially for those in the Finance seat.
Remember when we did the cash flow drivers tool?
In my experience, half of my teams roll their eyes like they don’t need it. I can only think of one team who told me there was no/little value in the activity.
My questions to you:
- What is the financial literacy of your leaders?
- What do you do every year and/or with every new hire to continue to build it?
In a past role, I spent five months of my life taking leadership teams through a financial literacy/cash flow activity. It was an 8-hour class, averaging 15 people per class, and I trained over 1,500 people across the US and Mexico. I will never forget when a plant manager told me, in an excited voice, that he finally understood EBITDA! The irony was that was a key metric in his bonus, and he did not really understand it. That experience taught me never to assume financial literacy and how it is such critical knowledge for the front-line leaders to possess so they can understand the CFO and make great business decisions.
Question for 2020: How are you assessing/building financial literacy in your leaders?
I encourage you to do the 8 cash flow drivers with your leaders and find other ways to repeat that learning event in creative ways. I would be glad to help co-facilitate it if that would help, and I have a few other ideas that I have seen work if you are interested.
Extra Tips:
- Here is an additional LinkedIn article written for finance leaders – 3 Benefits – and 1 Potential Pitfall – of Running Your Business on a Budget.
- The two resources I love around financial literacy are What The CEO Wants You To Know by Ram Charan and the HBR article – Cash Management Practices in Small Companies. Email me if you want a copy of either.