by John Carroll

Most authorities agree that adult illiteracy in the United States is far too high. Patricia McNeil of the U.S. Department of Education says that about 40 million people "read at a level less than necessary for full participation in society and are in need of basic education and literacy assistance." There’s a far more dangerous brand of illiteracy in the workplace today. It’s much more prevalent, victimizing, by my observation, more than 80 percent of workers in North America. What’s worse is that it could be killing your business.

This illiteracy that threatens your business is just that – business illiteracy. It’s defined as a nearly total lack of understanding of the financial numbers that are critical to your business success and how the individual helps to add to or subtract from those numbers.

In these days of doing more with less, organizations can hardly afford the luxury of their associates standing around and waiting for orders from headquarters. Therefore, when the boss tells people to get busy, all hands get moving and work gets done. Unfortunately, much of that work is done by a business illiterate, one who has little or no idea of the impact of the actions he or she has taken in the process.

What are the symptoms of business illiteracy in your company? One is the employee who, with the best of intentions, makes poor decisions repeatedly due to the lack of critical information that is easily understood. You find a good attitude, great work ethic and poor decisions.

Symptoms also include those who may believe your company is making much more (and you are keeping much more) than is actually true. These are the same people who, in an inside sales position, are likely to cut your price for a low-volume customer simply because, "We can afford it and we need the business."

A third symptom of business illiteracy is the front-line employee unable to make decisions on behalf of the customer. There’s no empowerment and the employee involves a supervisor or manager to resolve a situation. The ensuing resolution is six times greater because the employee lacks the confidence or the authority to handle it alone.

A fourth sign of business illiteracy is the employee’s apparent blindness to waste throughout the business. From raw materials to unnecessary steps of a process, employees often underestimate (and often don’t consider at all) how much that waste is costing the company.

Here are four ways I recommend to begin building business literacy in your organization:

1. Start teaching your people how your business operates financially. Let them see the numbers you look at regularly, especially your critical numbers, so that they can begin to understand. They need to see how tough it can be for a company to get and stay profitable in any type of economic conditions. This is not a quick fix, nor is it a cure-all. It is, however, a good start and one you should continue regularly and forever. It can be as simple as reviewing a simplified profit and loss statement with them each month.
2. Give your front-line people a dollar figure under which they have complete authority to resolve a customer complaint or problem. Many businesses now empower their employees to make decisions on the spot that will cost the company less than $100 to resolve.
3. Make sure your people know how your business makes a profit and how they contribute to that profit. They need to know that an order for $500 doesn’t generate $500 profit. They also need to know the behaviors will help them contribute as well as those which hurt the company’s profitability.
4. Keep the score out in front of your people. Let them see regularly in charts and graphs how you’re doing in sales, gross margin dollars or other measures against your budget forecast. It’s much easier to be in the game and playing when you can clearly see and understand the score.

Share with your people some of the same information that has you awake and staring at the ceiling at 3 a.m. Let them see the bad news as well as the good news. They may still sleep soundly. Over time, however, as you provide them with a continuous stream of accurate numbers and proper education, they will begin to make better business decisions and contribute positively to those numbers and to your results.

Until you give your people the complete rules of the game you want them to play, they’ll be unable to compete or play very well. Unless you report regularly on the score (who’s winning, who’s behind, by how much and how much time is left on the clock) you are facing a climb that is all uphill and you’re facing it alone. It’s not that your people don’t want to help; many do have the attitude and skills to give you the effort you want. They cannot, however, give you the results you need when they’re kept in the dark about some of the most critical measurements in your business – your financials.

John Carroll is President/CEO of Unlimited Performance, a Mt. Pleasant, SC, firm focused on organizational and individual performance improvement. Brian Tracy International, a worldwide network of consultants, has recognized him for sales excellence. Contact him at 1-800-672-4277 toll-free, email at jcarroll@uperform.com, fax at (843) 881-6746.

© 1999 John Carroll All rights reserved.