It’s no secret that strong leadership is required for a company to achieve ambitious and aspirational goals. Increasing the collective capabilities of your leadership team is essential if you want your organization to continue to grow, to capitalize on opportunities, and to respond to an ever-changing and increasingly complex global business environment.
Over the past ten years, I’ve led dozens of simulation-based workshops focused on executing strategy. I’ve learned much from the hundreds of students I’ve had the pleasure of teaching. But if there’s one thing I’ve learned – and one universal truth – that is common among the many companies with whom I’ve worked, it’s that there are “more good ideas than resources available to pursue them.”
WHAT IS FINANCIAL LITERACY? Financial literacy is the ability to read and use common financial reports and ratios to assess business performance. There is enormous value to a leader in understanding this building block of business acumen. It allows a leader to make informed decisions and project the financial impact of their day to day choices. It makes a leader more confident and more competent in his or her role. It is difficult to be a strong player in any game if you can’t read the scorecard.
You’ve heard the expressions before, “Cash is king” and “Cash is the lifeblood of a company.” Sounds sensible, but what does it really mean? If cash is king, what about profitability?
Managing through business cycles – and there are many types of them – challenges even the most seasoned leaders. Responding to or anticipating market changes can require bold and risky decision-making with potentially profound consequences. A leader’s first exposure to market volatility can be challenging, unsettling and wrought with mistakes. But what if you could practice reacting to and managing through market swings before you are subjected to them in real life?
It’s a fact: Effective leadership requires both interpersonal skills and business acumen. Even the most dynamic and well-liked leaders are likely to flounder if they lack overall business sense. That’s because without a clear understanding of how business works, their goals are likely to ring hollow -- especially when employees recognize that these goals aren’t based on a strong understanding of the marketplace or technical/functional skills and knowledge.