Sunday, January 11, 2015

Do your Employees Understand Business?

Ideas are more important than status. Then real engagement and empowerment occur and magic happens.

Digitization makes the business and world more interdependent and hyper-connected. However, most of the organizations are still running in industrial silos, employees are just like the nuts/bolts who only continue to do what they are doing always, without asking a big WHY, and have not so much clue about what the entire business wheel try to achieve, and where is the destination. So how to align talent’s personal growth with the business’s ultimate goal to improve employee engagement and create synergy in order to accelerate the speed of enterprise wheel? And how much should employees understand business?

Understanding is a very good basis for employee and business success. Obviously, the employee needs the information that firstly, helps them deliver against their own direct outcomes and secondly, how they contribute to other parts of the business, especially the "core business". The more people within an organization interact and have an idea of what the other does within the total picture, they elaborate and collaborate towards a coexistence within the organization with benefits for all. Although not all information can be or, is necessary to be shared, the point is how to enforce cross-functional communication and collaboration. If new processes are being put in place, invite people to open meetings to get their input. Really think through who will be affected when decisions are being made.

The more transparent a company can be with its employees the better. People like to know what is going on with the company they have chosen to invest their time with, and they want to know that the contributions they make to the company are valued. Failure to communicate changes and shifts in the company that will affect your employees oftentimes lead to rumors, speculation, and assumptions, all of this will certainly result in a drop in morale. Businesses today are no longer in a segregated work environment, companies today are more focused on interpersonal relationships, and transparency has become a huge focus in the effort to maximize production by allowing employees the opportunity to be informed as well considered when it comes to making strategic plans for the company of today.

A SWOT analysis can be a good business education for all employees, either you are a techie or customer contact. A summarized SWOT analysis (strengths, weaknesses, opportunities, and threats) should be completed/reviewed/explained by all employees as part of their onboarding with the company. Perhaps such an exercise would at least give the new employee beginning insight into the business. As for silos, when you find the sledgehammer that effectively breaks them, can others borrow it? The organization needs employees to understand how its business works. This will help its employees add real value to their business. Also, it will enhance the organization's culture as everyone will understand the perspective of the other department. In addition, it will let all employees work toward one goal that's adding value to the organization.

Return on Human Assets is a subset of Return on Total Assets. There is certainly a move to putting Human Assets on the balance sheet although initially as a balance sheet note. This will open up a new set of balance sheet measures that again will be across different functions like Return on Human Assets as a subset of Return on Total Assets. Employees need to have an understanding of the business that is relevant to their work. A delivery driver for a gas supplier has significant influence over the Gross Profit margin on a day to day basis. Therefore an understanding of the "cost per drop" and how this impacts on the profit margin will empower the employees, especially if you utilize an envelope approach to the performance measures, what is the targeted cost per drop, and also just as important what is the "risk point". With this information, you will create an empowered and motivated team working together - dispatch, loading, maintenance, and drivers/delivery all working together to achieve a shared measure.

Engaged teammates are what make an organization successful year after year. Statistically, more than 70% of employees are disengaged in the work, it significantly decreases employees’ productivity. Engaged teammates understand what the company does, how it achieves profitability and what each department or business unit does, and how it supports the company, and finally, they understand their own impact on the organization's success. Then management has to fully enable teammates: ideas are more important than status. Then real engagement and empowerment occur and magic happens- the ultimate business success for the long term. It is really important for an employee to understand revenue generation and cost process so that they could understand how their role helps in achieving revenue targets and cost optimizations.

In summary, the “T-shaped” digital talent is on-demand, the business executives and managers are more likely the specialized generalists who have strategic insight about the holistic business and domain expertise for their organization; the digital professionals are more often generalized specialist, who has a broad understanding of business, regardless of their specific skill set in order to see the trees, without ignorance of forest; not only do things right but also do the right things, in order to improve overall business efficiency, effectiveness, and agility.


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