Human Capital - ROI LO13634

John Zavacki (
Fri, 16 May 1997 05:42:51 -0400

Replying to LO13615 --

Roxanne asks:
> How can an organization help employees better understand the economics of
> their job?
> Part of this challenge also rests with employees. One company I work with
> want employees to develop a better understanding of the financial impact
> that they have on the organization. This might come in the form of 1)
> generating revenue, 2)cost savings, and 3) providing a more valued service
> than the company could purchase through outsourcing. In other words, they
> believe that their employees are all becoming internal consultants.
> What methods have others used to create this awareness among their staff?
> Have any of you done any work on this topic? or do you know of anyone who
> has? or any journal articles or research? Thanks for any help you can
> offer.

Open Book Management, which comes in many flavors,can help here. Jack
Stack's "The Great Game of Business" is a good starting point, other
writers in the field are John Case; Ken Proudfit. The key is to structure
an understandable financial literacy program for all employees which
teaches the key metrics the client company uses (and to steer them to
meaning metrics if they're using financial accounting metrics). We
combine the Deming notion of the theory of variation with our presentation
of metrics to be sure the notion of "cash flow" management doesn't corrupt
the learner.

John Zavacki
The Wolff Group

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