Building a definitive culture that caters to the growth and retention of employees has become quite popular these days. It comes as no surprise that it is much more efficient to attract, retain, and transition a quality employee than it is to spend the time and resources to recruit and train a new one. So why not kill two birds with one stone? Filling a leadership role by promoting from within, can have a major impact on your organization’s culture, employee retention, and productivity.
According to Forbes, the number one reason your best employees quit is because there is no vision. Understanding an organization’s financial objectives allows the vision to come into focus. Financial objectives are the maps and guidelines that an employee must understand in order to help an organization achieve their goals.
So, what can organizations do to help their employees see a clear vision and prepare them for management roles?
According to Bernard Banks, clinical professor of management and associate dean for leadership development at the Kellogg School, a good starting point is to begin grooming future managers when they are still in non-management roles. This succession planning consists of training and allowing employees to take on management assignments or projects. Giving these employees the opportunity to lead and learn from their actions, allows them to grow into leadership roles in a somewhat controlled environment.
An organization’s vision becomes clearer when an employee has an entrepreneurial mindset. To enhance an employee’s leadership development, give them the opportunity to begin thinking like an owner.
Here are three basic financial concepts that every leader should take into consideration
• Margins – Anemic Return on Sales will inevitably hinder an organization’s growth and could lead to its demise.
• Cash Flow – Without enough operating cash on hand, an organization may be forced to borrow money to keep the doors open.
• Expenses – If more is going out than is coming in, your business is not profitable. While there may be months and even quarters that aren’t profitable, too many of these can be a serious issue.
For a big-picture view of developing financially savvy leaders, read 5 Business Acumen Concepts Every New Manager Should Know.
Let an employee learn about these concepts by allowing them to seek out opportunities to decrease cost, improve productivity, or grow sales in a realistic environment. This type of experiential learning will not only make an employee feel more connected with their organization, but it will also help them succeed when they transition into a leadership role.
By developing employees who think like business owners, organizations can increase their retention rates and maintain a healthy pool of potential leaders.
See how Business Acumen training helps employees think like business owners in our eBook, Business Acumen Anecdotes.