Financial literacy

The CFO clears his throat, takes off his jacket and rolls up his sleeves as he looks over the company cafeteria packed with workers from every segment of the business, shop to sales. It is hot and claustrophobic in the crowded room, especially with the blinds drawn shut. Although they have a good employee team, he knows even before he turns on the computer and brings up the first Power Point slide,

The CFO clears his throat, takes off his jacket and rolls up his sleeves as he looks over the company cafeteria packed with workers from every segment of the business, shop to sales. It is hot and claustrophobic in the crowded room, especially with the blinds drawn shut.

Although they have a good employee team, he knows even before he turns on the computer and brings up the first Power Point slide, that the new initiative to boost profitability will be met with the same who-cares stares that greeted the launch of Quality Circles, Continuous Improvement and countless other programs before. “They just won't appreciate why this is so important,” he mutters to the CEO. “And without their support, it can't succeed.”

Today's managers know only too well how tough it can be to sell new programs to their employees — all veterans of bottom-line improvement campaigns where missions were not always clear and consequences not always evident. To help companies and their work teams over this hurdle, Kaufman-Peters LLC has introduced an innovative financial literacy course, “The Cash Flow Chronicles.” It is designed to teach everyone within a company how to understand the language of business, from reading profit and loss reports to understanding balance sheets and the principles of net present value.

The course grew out of company president Derek Kaufman's own experiences while working at a company that manufactures diesel fuel injectors. “We had a number of initiatives in place from JIT to Lean Manufacturing,” he recalls. “Each one was contributing something, but we were greeted with a sea of blank faces every time we met with our employees to talk about the financial challenges facing us. Then we had an idea. If we could increase the financial literacy of everyone in the company, we might be able to get more people involved in the change process.

“We based our training on the premise that people are CFOs of their own finances, so it followed that they could also learn to understand the language of business,” Kaufman explains. “We taught everyone how to read the P&L and how a balance sheet works. We used the cash flow statement to talk about our company's ability to generate cash, and we began to see significant changes in how people approached their work.

“Before the training, somebody in the shop would want a new machine, for example, and they'd say, ‘Why can't you get a new machine for our group? You got one for the other team.’ Once they began to understand what made the place tick, however, they got much better at figuring out how and why the company made changes. We stopped defending why we wouldn't buy a new machine and started talking about our ability to service debt from the cash flow generated by operations,” Kaufman says. “An increase in financial literacy changed the discourse throughout our organization.”

Kaufman and his colleagues began offering The Cash Flow Chronicles as a live seminar, but success pushed demand past their ability to conduct classes, according to Kaufman. That's why the company recently began supplying the training on a two-hour, interactive CD-ROM.

The CD is designed to be as entertaining as it is instructive, thanks to the animated graphics and to Max, the “former financial geek” turned janitor who acts as the on-screen guide through the material. To learn for yourself what The Cash Flow Chronicles can do for your company, email [email protected] or call 616-459-9500 and ask for a demo CD. Like Max, you may find yourself saying, “Now that was pretty cool.”

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