Business & Financial Acumen Library

Ideally, every manager in your company should know:

  • How the business makes money – what is the big picture?
  • What drives the profitability of the business – strengths, weaknesses, and dial movers?
  • How each manager personally affects business results – adds value and makes a difference?

Many managers, particularly in big companies, only have a partial understanding of these 3 points. They don’t fully understand what drives profit and cash flow, seldom use a P&L or a Balance Sheet to help them make better decisions, and only have a vague idea of how they personally affect the overall success of the business. In most cases, this is the inevitable consequence of their ‘on the job’ experiences to date; this is how they learnt, and hence, it is quite natural for them to manage their daily tasks with the understanding they have. Sadly, most Finance for Non-Financial courses do not fill the gaps. They teach some of the theory, but in a way that is likely to be forgotten within weeks of the course, and never integrated into “how I do my job”.

The ProfitAbility approach to building Business & Financial Acumen is to provide engaging, memorable and highly relevant experiential learning through tailored business simulations. The key word is “relevant” – and the focus is on relevant to the roles of the managers and the desired business outcomes. Plus the fact that the learning is re-enforced in the workplace, ensuring that the learning is readily applied and ‘sticks’ forever. It is embedded in the learner’s thinking processes and behaviour during the training, during the business simulation. Manager’s learning journeys can include online learning modules, group or individual coaching, and application projects where the topics are integrated into the work which the learner is doing anyway, building and blending relevant job experience onto the basis gained through formal learning.

The most effective methodology for learning financial basics is through a board game style business simulation, and these can be generic off-the-shelf, or tailored to your industry, or even to your business. The closer the simulation is to the learners’ own business, the easier it is for them to apply what they have learnt, in their work. If for instance you work in an insurance company, an insurance simulation will closely mirror both the main features of the business, the drivers of market share, of positive and negative cash flow, and of profit. The format and jargon used in the financial records will match your own internal accounting language, and the decisions made by participants will be those that the company faces in reality. That means that you have no need to “transfer” the learning from the simulation to the job, because the learning is already about the things you do, and fits immediately into your own knowledge of the company.

The great benefit of this format is that it is visual, tactile, social, and totally transparent. The game board is a visual Balance Sheet, showing exactly where your money is tied up at any time, and there is no hidden algorithm to spit out a result without you knowing how it was caused.

Where people already have basic financial understanding, but need to take it to a deeper level, perhaps combined with understanding the strategic forces in your industry and the strategy you have chosen to navigate them, we build more detailed computer simulations. What these lose in transparency (essential in understanding the basics) they make up for in the sophistication of the cause and effect relationships that can be built into them, and the depth of learning that they can stimulate. There is literally no limit to the number and complexity of strategic initiatives, competitive scenarios, unforeseen changes, and management variables that can be modelled. The choice of what to include is guided by your learning objectives, the prior knowledge of the participants, and the time allocated to the training.

We have a great track record of teaching real business acumen which enables managers to run their businesses better, as opposed to detailed financial training which is often unrelated to their day to day jobs. While a small number of financial concepts are fundamental to understanding business, our focus is firmly on giving people the knowledge they need to do their real job better, and making sure that they know how to use it, and really do subsequently use it for their personal and their business’s profitability.

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