Connecting Financial Literacy to Achieving Business Objectives | Paradigm Learning

Connecting Financial Literacy to Achieving Business Objectives

Posted by Derek Reynolds on August 16, 2018

An organization's success hinges on its ability to achieve its business objectives. While every business’s structure and objectives may vary, there are some areas that impact every organization’s sustainability and growth potential.

Below we’ll explore some areas that are directly affected by the business acumen of individual contributors, managers, and leaders. By understanding the interconnectivity between these areas and an organization’s financial statement, people make can see how their actions and decisions impact the big picture.

Profitability

Profitability is closely related to profit – but with one key difference. While profit is an absolute amount, profitability is a relative one. It is the metric used to determine the scope of a company's profit in relation to the size of the business. Profitability is a measurement of efficiency – and ultimately its success or failure. Profitability can further be defined as the ability of a business to produce a return on an investment based on its resources in comparison with an alternative investment. Although a company can realize a profit, this does not necessarily mean that the company is profitable.

Productivity

Productivity is a measure of the efficiency of a company's production process, it is calculated by measuring the number of units produced relative to employee labor hours or by measuring a company's net sales relative to employee labor hours.

Customer Service

All interactions between a customer and a product provider at the time of sale, and thereafter. Customer service adds value to a product and builds lasting relationships.

Employee Retention

Many consider employee retention as relating to the efforts by which employers attempt to retain the employees in their workforce. In this sense, retention becomes the strategies rather than the outcome.

Core Values

These are the guiding principles that help to define how the corporation should behave in business and perhaps beyond if they have an additional mission to serve the community. Core values are sometimes expressed in the corporation's mission statement. These values have the ability to affect every business objective and outcome.

Growth

The process of improving some measure of an enterprise's success. Business growth can be achieved either by boosting the top line or revenue of the business with greater product sales or service income or by increasing the bottom line or profitability of the operation by minimizing costs.

Change Management

Change management (sometimes abbreviated as CM) is a collective term for all approaches to prepare and support individuals, teams, and organizations in making organizational change. The most common change drivers include:

  • New & stronger competitors
  • Government regulations
  • Customers & the marketplace
  • Global trends & events
  • Technology
  • Economic conditions

Connecting individual actions to an organization’s financial and business objectives is the only way to achieve company goals. Doing this doesn’t have to be as hard or daunting as it sounds.

See how one of our clients used Zodiak®: The Game of Business Finance and Strategy to bridge the knowledge gap in a fun and engaging way.

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