Leaders have expressed for years how hard it is to find time to address those important-but-not-urgent tasks made famous by President Eisenhower’s two-by-two matrix. Today, finding time takes on a new urgency. When leaders are squeezed by new operating modes, increased turnover, longer hiring cycles, and more demands on their work-life balance, they find it hard to step back and think about longer trajectories and broader frames. In fact, according to a survey of 2,800 workers by staffing firm Robert Half, nearly 70% of professionals who transitioned to remote work as a result of the pandemic report that they now work on the weekends, and 45% say they regularly work more hours during the week than they did previously. For many leaders, it feels as if there are simply not enough hours in their days to fit everything in.
I teach financial acumen to senior leaders all over the world. Although financial regulations, cultural practices, and market dynamics differ, understanding the timing trajectory of financial and business measures is key to every class I facilitate.
When a client reaches out to us to discuss the creation of a Business Acumen leadership development course, they typically begin by stressing that they would like to help their leaders understand “the Big Picture.” As the design process unfolds, we discuss their overarching corporate goals and how the target population impacts those goals. This sets the priorities for the course, considerations such as: how much time to spend on revenue recognition and accounts receivable; whether to include investment analysis; and how closely to examine the competitive performance in key markets.
At Insight Experience our goal in business acumen leadership development programs is to increase participants’ fluency in financial terminology and decision-making, rather than turning them into finance or accounting professionals. We use business simulations to highlight key leadership decisions and trade-offs, trace the impact of our participants’ everyday decisions through their own company financial statements, and challenge them to find opportunities for improvement. Their stories during and after the programs inspire us every day. It’s hard to pick favorites, but here today we share a few such success stories from the field.
For the past two decades the service sector has been the fastest growing portion of the economy. Service businesses including consultants, contractors, hospitality and professional services are reshaping the business landscape. As many of these fast growing businesses mature, they are now looking to fine tune their business models. And yet, many business leaders either don’t understand or cannot articulate the economic flows that make these businesses tick, the dynamics that keep them cash-positive and ultimately enable them to grow profitably.
A growing chorus of business leaders is questioning the singular notion of maximizing shareholder value. In a recent Forbes article, Jack Welch and Marc Benioff, Chairman and CEO of Salesforce, both label it the “World’s Dumbest Idea”. Neither of these CEOs think shareholder value is unimportant, but without using the label they advocate a more Balanced Leadership™ approach. Marc Benoiff in an essay in the Huffington Post calls for maximizing stakeholder value while Jack Welch says, “Shareholder value is an outcome—not a strategy.”
This December the world watched the hacking drama at Sony Pictures unfold, and the real world handed us a “disruptive event” we couldn’t have made up. When we use business simulations to teach strategic finance and strategic thinking to senior leaders, we often add a disruptive event to a final round to really challenge the participants’ strategic agility. Of course, one of the concerns with this approach is that it can seem unrealistic to suddenly encounter an unforeseen event with business changing short- and long-term consequences. Even when we do, our clients usually tell us, “Nothing like that could happen here.” Until now!