As a leadership coach and consultant I am considered a thought resource in the area of developmental leadership. That is to say I spend my time working with reactive and unconscious behaviors that create unseen and unwanted outcomes within personal leadership.
In my current role, I am often called to help install financial fluency within large organizational structures as part of leadership development. While speaking this last week to one of the largest apparel companies in the country, I led an exercise that became an “Aha!” moment for many in the room.
After a half-hour of speaking with the group, I asked them all to participate in an experiential exercise. Being fluent in Spanish, I proceeded to engage in a Spanish conversation with one of their leaders for about five minutes. Upon finishing, I asked the leaders in the room to convey to me their experience of listening in on that conversation.
Why is this Important?
Financial language in the corporate world is the language of execution. This language is the basis upon which many decisions are formulated and then executed. It is absolutely necessary that all leaders stand on the inside of any conversation from which decisions are derived. If they don’t, how can they possibly exercise the leadership function they’ve been entrusted with?
I share with you today, 5 keys to developing financial fluency as a leader within your own organization:
1) Know Your Financial Model
In most companies it is easy to create a model of revenues and production. I did this recently at a large apparel company by drawing a simple circular diagram of the different ways we talk about sales. It had categories like geographical, product type, channel etc. Different decisions about the same revenue stream are made from understanding these different categories. Put those decisions in a list next to the categories.
2) Install the Model
Take this model and give it to everyone in the company from the dockworker to the CEO. Ask people in your company about the categories and have them ask questions. Get them used to the shallow water before the real swimming begins.
3) Bring it Alive
Bring your model alive by using the pieces and terminology in your conversations with everyone on your team. Carry your model around with you. Bring it out in conversation after conversation. If your revenues are broken down by geography, speak geographically about revenues. If they are also broken down by demographics, speak demographically. Soon, everyone in the building will be standing on the inside of these conversations.
4) Now, Add the Numbers
Adding the numbers to the model is much like hanging ornaments on a Christmas tree. Once the model is known everyone in the organization will know exactly where to find it. So, when percentages and absolute numbers are introduced they will hang easily from the branch upon which they are placed. If 60% of your sales are foreign, then point that out. Soon, your entire company will be speaking in tongues. Financial tongues, that is!
5) Tie Fluency to Personal Development
Once it is understood that decision-making is created from a platform of fluency of financial-ese, then the easy part can happen. All internal development is the attempt to remove unconscious or reactive barriers from the decision making process. All execution involves minute-by-minute decisions. These decisions arise from the clarity of both a mature manager and the language that they speak.
While these steps are presented here in abbreviated form, I have had great success installing the robust version in large and small organizations. The installation of such an initiative is a leadership exercise in and of itself.
ALAN E. SHELTON is a leadership coach, speaker, blogger, and author. His groundbreaking book, Awakened Leadership: Beyond Self-Mastery, integrates the corporate leadership and spiritual worlds through his message that awakening is the felt sense that your actions seamlessly reside in who you really are and move in a perfect flow. You can follow Alan on Twitter, like his Facebook page, and learn more about him at his website, www.AlanShelton.com.