THE 411 ON FINANCE 101
Founders share some hard-won lessons on getting financial knowledge to stick
HIT THE HIGHLIGHTS
“A lot of entrepreneurs think more is more, so they want to share 20 key metrics, but no employee can follow all those,” says Joe Knight, co-author of Financial Intelligence and co-founder of the Business Literacy Institute. He suggests picking a maximum of three metrics that you share on a weekly or monthly basis. “There’s no one-size-fits-all solution,” he says. “Pick two or three that drive your business, and employees can focus.”
REPEAT, REPEAT, REPEAT
Financial basics might be front and center during a new hire’s orientation—but if that’s the only time that person engages with the numbers, nothing will stick. At ice cream manufacturer Rhino Foods, in Burlington, Vermont, monthly town hall meetings include a refresher on every financial metric. “If you’re not somebody who comes from a financial background, it may take a couple of times for it to really sink in,” says co-founder Ted Castle. “Spend the time and repeat it often enough that employees can really get it, or what’s the point?”
INCENTIVIZE YOUR “STUDENTS”
Want to really motivate employees to absorb how certain performance indicators impact the bottom line? Fuel their study habits with cold, hard cash. Rhino Foods has a bonus program for employees who improve metrics in safety, quality, and customer service. At Achatz Handmade Pie Co., store managers have a profit-sharing model, which rewards managers with payments of up to $6,000. “The beauty is that almost no one’s really asked for a raise in the past three years,” says co-founder Wendy Achatz. “They know they can make it themselves if they run their stores well.”
SOLICIT FEEDBACK
When Rhino Foods had just 30 employees, Castle could intuitively gauge how much financial info was sinking in. But as the staff ballooned to 130 people, many of them non-native English speakers, he saw that an informal gut check wasn’t going to cut it. “You should be constantly asking questions to figure out if they understand,” he says. “If you honestly listen, you’ll hear if they don’t get it.”