American Packet

Article by Ron Sandifor

The tenets of career management training have been greatly impacted and may have to be substantially revised in response to the emergence of the “New Economy” in the United States. This “New Economy”, of course, has been somewhat violently forced upon Americans by way of the United States being part of the “New World Economy”.

It seems amazing that although the signals and signs of this approaching “sea change” in the world economic order of nations have been visible to Americans for at least a decade or more, we, as a nation, appear to be quite surprised and shocked at this turn of events. One possible explanation for the surprising nature of this reality shock is the added negative impact of the world economic upheaval of 2008-2009 and the trailing recession. Together, these two events greatly enhanced the negative effect of the New Economy on working class Americans, particularly those belonging to the Great American Middle Class.

How The New Economy Impacts Career Management Training

Three primary characteristics of the new economy combine to make planning and managing an occupational career a more challenging task.

1. Uncertainty

This is arguably the most pervasive effect of this new economic age. It is now clearly apparent that entire industries that employ thousands of workers at all occupational and career levels which we thought were permanent entities, can simply vanish. What can you do if your life plan hinged on pursuing a career in an industry that simply ceases to exist? Traditional career management training does not address this phenomena.

2. Technology Advances

Many baby boomers may recall widespread speculative conversation during the 1960s and 70s about how the invention of computers would cause people to lose their jobs. The response from the “establishment” at that time was that these were irrational fears and in reality, the growth of computerization would create jobs. In retrospect, both predictions have become reality, however, the number of and variety of jobs eliminated by computers and computer associated technology far exceeds new jobs created.

3. Globalization Of Commerce And Labor

The maturation of many previously third world impoverished countries around the world during the past four decades has resulted in an ever growing source of competent, inexpensive labor to compete with the American labor force. The result of this world economy news is a serious long-term loss of jobs in the USA.

Impact Of The New Economy On Career Management Training

The following is a list of potential specific negative outcomes of the New Economy relative to career progression and career management.

General reduction in the number of people employed in your particular fieldReduction of opportunity within your field due to the exodus of companies/employeesReduction of opportunity within your company because of offshore competitionYour company and others in the same field close because they can no longer compete

Adapting Your Career Management Plan For The New Economy

In the past, pursuing an employment career involved selecting an occupation or profession that you want to work within over a long period of time during which you would consistently advance in knowledge, achievement, stature, responsibility and compensation.

Any systemic changes within your actual occupational field were normally associated with positive advancement such as the discovery of new knowledge; improved applications or methods; increased efficiencies and/or lower costs, etc.

In the new economy, this previously “normal” evolution within career fields has become distorted by the previously listed negative outcomes. The same is true for your personal orderly career progression as you originally envisioned.There have always been reasons or unusual circumstances that could arise and necessitate that an individual pursuing a career in their chosen field would have to suddenly and unexpectedly change careers. Now, however, the tremendous uncertainty wrought by the new economic realities make forced career changes more likely than ever before. How can you plan for an experience like this in a way that allows you to maintain a feeling of comfort and still being in control of your life? Career management training must be updated to teach how you can expand the parameters of your career plan to accommodate the new realities. If you are just starting out in a career, make sure that they are addressed in your original career plan.

Start Broadening Your Vision

Beginning now, start envisioning yourself in alternate careers that might appeal to you. Do this even though there are no imminent problems in your current career.

Seek and identify other industries, careers, occupations, etc., that require similar knowledge, skills, education and behavioral competencies as your present career. As you uncover potential alternate career paths, join an association or some other type of network of workers in those fields. Lastly, find recruiters serving those alternative fields and establish relationships.

If you have been working in your field at least 2-3 years and perhaps have even begun moving up the ladder, assess your proven skills and core competencies at this point. Consider them from your own viewpoint as well as assessments on your annual performance reviews. Additionally, you may utilize “career assessment” and “career interest” testing available online at sites such as LiveCareer.com. This feedback will be of value to you for your initial career planning as well as career tracking and management in later years.

Updating traditional career management training to recognize and address these new challenges to pursuing a successful employment career can lessen the workplace stress related to the new economy.

Article by Michael Jeffreys

There are many ways that small business training can be beneficial to a new company. Small business training can teach entrepreneurs every aspect of running a successful business, from obtaining funding to writing a winning grant proposal and everything in between. The proper knowledge can mean the difference between failure and success in a small business

Article by Wesley Mccormick

The primacy of a fatwa when accrediting an Islamic finance training program, and why Islamic finance scholars, not academic and professional bodies, should certify training programs for authenticity

Atif R. Khan, Ethica Institute of Islamic FinanceT (www.EthicaInstitute.com) Copyright ? 2011

A fatwa, or expert legal opinion of one or more Islamic scholars, is the highest level of accreditation granted a transaction, product, or institution in Islamic finance. Islamic banks esteem fatwas. And Islamic banking customers esteem fatwas. Yet Islamic finance training programs continue to turn to academic and professional bodies for Shariah accreditation. Why?

Whence this came one can only guess. Perhaps the word “accreditation” itself naturally harks one back to the leafy environs of one’s campus and conjures up images of stone pillars and gilded arches. After all, accreditation and academia have always gone hand in hand. Or perhaps it is the Islamic finance industry’s natural tendency to replicate the conventional finance industry, and thereby errantly impose upon the Islamic educational paradigm a western educator’s sensibility.

Whatever the origins of this mistake, Islamic finance is ultimately about Islam. And in Islam, accreditation is not about the sanctity of a particular hall of academia or the credentials of a professor; it is about the Islamic qualification of the accreditor – qualification proper to a particular Islamic science, in this case the application of Islamic commercial law, and qualification proper to the individual or institution issuing the opinion, in this case a fatwa.

After all, it was the Prophet Muhammad (Allah bless him and give him peace) who said, “Whoever is given a fatwa without knowledge, his sin is but upon the person who gave him the opinion” (Abu Dawud).(1)

What Does Standardized and Accredited Training Mean in Islamic Finance?

Of the many challenges now facing the Islamic financial industry, perhaps the greatest two are:

1. Accreditation by scholars, not academic and professional bodies: The importance of an Islamic finance scholar certifying a training program is paramount, and2. Standardization in training: The importance of this scholar-certified training conforming to a widely accepted Islamic finance standard.

There is not a single industry in the world except that it enforces standards: banking, construction, transportation, food, and drug, to name but a few. And yet Islamic finance training, the very building block of the industry, is conspicuous in its absence of standards. This is a root problem for all practitioners for which almost every other problem is but a symptom.

Lack of standardization is felt most acutely in the industry’s face-to-face training sector, where just about anyone with passable product knowledge stands before an audience of eager bankers and waxes lyrical about the virtues of Islamic finance. Of course, it would be acceptable if this trainer merely repeated the positions of those qualified to speak on the matter.

But more often than not, this unqualified trainer, professor, or writer assigns the role of scholar unto himself, guessing through an answer here, issuing a pronouncement there, with little regard for established industry standards. Seemingly innocent at first. But these same audience members then go out into the marketplace and begin putting what they learn to practice. If they remember nothing else from the trainer, they rarely forget his casual attitude towards the high standards of the Shariah, or Islamic Sacred Law, and his ready willingness to issue his own “fatwas” – a willingness they soon adopt. Non-scholar trainers may convey legal positions, but they may not create them.

Accrediting academic bodies like universities, degree programs, professional bodies, and accrediting institutes have a place, no doubt, in ensuring high pedagogical standards. Delivery standards in Islamic finance training span the spectrum from excellent to illegal. But pedagogy is not the same thing as Islamic finance.

In Islamic finance, accredited training means training approved by a scholar who confirms that the content fully adheres to a particular standard. And not just any scholar. In order to be qualified to approve something in Islamic finance, one must first be a trained and experienced Islamic scholar who possesses, foremost, deep knowledge of the Shariah with, at minimum, demonstrated, peer-reviewed competence in at least one of the traditional schools of jurisprudence. And second, he must bring practical, working knowledge of banking and finance, complemented by actual experience in the contemporary marketplace.

Standardized AAOIFI Based Training Promotes Shariah Harmonization

In 1991, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI, pronounced “a-yo-fee”) formed as an independent, non-profit, standard-setting body with a remit to promulgate Islamic finance standards for the entire industry. Twenty years on, AAOIFI is now widely regarded by banks and governments as the de facto industry standard for Islamic finance practitioners.(2) In fact, numerous central banks and financial service authorities now recommend the standards as a source of guidance for local banks.

AAOIFI’s regularly updated texts have become the definitive reference work for those seeking a comprehensive rule book about Islamic financial products and practices. Its 85 standards cover everything from accounting and auditing to governance and product-specific Shariah standards. The 16 to 20 scholars – the number depending on the year – who sit on AAOIFI’s Shariah Board are leading Islamic finance scholars who come from the Gulf, South Asia, South East Asia, Africa, and North America; each of them legally qualified to issue a fatwa and adjudicate on matters Islamic finance.(3) And for a religion that deeply values scholarly consensus, or ijma, as one of the main sources for legal derivation in Islamic jurisprudence, it is a relief to hear one scholar put it this way: “AAOIFI is the closest thing we have to ijma in Islamic finance.”(4)

Training Accreditation by Scholars, Not Academic and Professional Bodies

According to AAOIFI’s “Stipulation and Ethics of Fatwa in the Institutional Framework”(5) the standards for issuing a fatwa are, at minimum, knowledge of:

1. Islamic jurisprudence in financial transactions2. How to derive rulings from primary sources3. Islamic jurisprudential contributions of other scholars4. Contemporary issues in the financial industry

Moreover, the individual should demonstrate discernment, scrupulousness, and peer-reviewed competence within the financial industry.(6)

In order to fully comprehend the complexity of the scholar’s task, one should reflect upon the competing demands placed upon him when deriving a ruling from the Quran and hadith (prophetic traditions) corpus; hadith which number in the tens of thousands for those that are rigorously authenticated (sahih) and exceed one million when counted as separate chains of transmission. As one scholar notes, knowledge of the primary texts consists in knowing, among many other things, “the ‘amm, a text of general applicability to many legal rulings, and its opposite; the khass, that which is applicable to only one ruling or type of ruling; the mujmal, that which requires other texts to be fully understood, and its opposite; the mubayyan, that which is plain without other texts; the mutlaq, that which is applicable without restriction, and its opposite; the muqayyad, that which has restrictions given in other texts; the nasikh, that which supersedes previous revealed rulings, and its opposite; the mansukh: that which is superseded; the nass: that which unequivocally decides a particular legal question, and its opposite; the dhahir: that which can bear more than one interpretation.”(7)

This lengthy description of the minutiae facing the scholar in only one area of ijtihad, or personal legal reasoning, is particularly relevant in an age when pretenders to the task open the doors of scholarship unto themselves. Lest one decry that such high standards only complicate matters, and that God’s word is divinely protected, we should have the humility to remind ourselves that divine protection relates to the word of God, not to our ability to derive rulings from it.

It is not lost on anyone the rareness of such individuals in present times. In a perfect world, such a scholar would be the trainer himself. But until there are enough scholars to go around, the best that we can do, and the least we must, is obtain their consent when accrediting a training program.

“Fatwa Shopping” and the Harms of Less Than 100% Standardization

When training content is anything less than 100% standardized to AAOIFI, discrepancies between the learner’s knowledge and the market’s practice abound. This rift widens into a chasm of confusion and leads to what can only be euphemistically described as the banker’s penchant for “fatwa shopping”: finding the right fatwa to fit your needs, rather than tempering your needs to comply with the fatwa. At best, this occasionally costs some banks and customers their money. At worst, this laxity costs the whole industry its credibility.

A number of Islamic finance trainers now work with guidebooks and other material that is merely “authored” by a scholar or “supervised” by a scholar. But what we often end up with is material that is 80% or 90% AAOIFI-based; “Shariah compliant” according to somebody, perhaps. But not uniformly Shariah-compliant according to any particular mainstream collectivity.

When trainers fail to conform their content 100% against a widely accepted standard, newcomers get confused: “Why is this guidebook telling me a product is unacceptable to most of the industry, but teaching it to me anyway?”(8) It is not always quite clear where the Shariah-compliant part of the guidebook ends and where the non-compliant part begins. What is a newcomer in Islamic finance supposed to do?

Addressing Common Questions

Shifting training certification away from conventional academic and professional bodies to Islamic finance scholars requires a paradigm shift in our collective thinking. Common questions and comments, and how to address them, include the following:

Why follow a single standard when scholars cannot agree among themselves, and each bank has its own Shariah board? Does AAOIFI have an answer for everything?

Standards should be specific enough to be of technical benefit to the practitioner, and general enough to be of practical benefit to the broader audience in a variety of situations. Most Islamic finance scholars already acknowledge that AAOIFI is the leading standard-setting body in the industry. Differences in opinion between qualified scholars is a part of Islamic finance, indeed a part of Islam. But the operative word here is “qualified,” and difference of opinion between laypersons is part of the problem.

Shariah harmonization in training has the immediate effect of getting all the stakeholders in the industry moving in one direction. The laborious work of ijtihad then returns to those qualified to adjudicate on the matter, far from the din of confusion now plaguing the lay audience. It is impossible for AAOIFI to anticipate every possible question on every possible matter. Operationalizing rulings is the work of the banks’ Shariah advisors. However, for purposes of training, which is more general in nature, AAOIFI provides sufficient depth.

The message to CLOs is becoming clearer and clearer. Company leaders want them to align educational offerings with the organization’s strategic objectives.

That’s not an easy challenge. They must ensure that education and communication initiatives reinforce the company’s goals. They must help employees understand these goals and develop the skills and motivation to contribute to them.

And at the most basic level of alignment, they must make sure that every employee understands how the company makes money. That includes understanding how profitability is driven, how assets are used, how cash is generated and how day-to-day actions and decisions, including their own, impact success

Developing business acumen is fundamental to business alignment. Consider Southwest Airlines, which was founded in 1971. With 33 straight years of profitability, the airline has become widely recognized for the motivational culture it creates for employees and its extraordinary dedication to customer service.

Much of the industry has suffered during the years of Southwest’s growth, including many airlines that have merged or declared bankruptcy. Southwest buys the same planes and the same jet fuel as other airlines, and pays its employees competitive wages and benefits. What’s the difference?

Unlike some of its competitors, Southwest’s management team involves employees in the company’s financial results, explaining what the numbers mean and, more important, helping to link everyone’s decisions and actions to the bottom line. The airline has an open culture, one of inclusion at all levels, and employees understand their roles in providing great service and keeping costs in line.

Certainly there are other factors that contribute to the success at Southwest, but it’s difficult to ignore the positive impact of an approach that develops the business acumen of all employees and managers so that they can contribute to the airline’s success.

An Educational Challenge

Unlike those at Southwest, individual contributors and managers in many organizations today have not been educated about the big picture of their businesses. They have a narrow focus on their own departments and job functions and aren’t able to make the link between their actions and the company’s success. Multiplied by hundreds or even thousands of employees, this lack of understanding — the lack of true business acumen — means that too many decisions are being made and too many actions are being taken that don’t align with business objectives.

How can training help bridge this knowledge gap? For many companies like Southwest, implementing learning programs designed to develop a strong foundation of financial literacy and business acumen has made the communication of financial results to employees easier and more effective.

Business Acumen: A Definition

Very simply, business acumen is the understanding of what it takes for a business to make money. It involves financial literacy, which is an understanding of the numbers on financial statements, as well as an understanding of the strategies, decisions and actions that impact these numbers.

Someone with financial literacy, for example, would be able to “read” the company’s income statement. This employee or manager would understand the terminology (revenue, cost of goods sold, gross margin, profit, etc.) and what the numbers represent (i.e., gross margin equals total sales/revenue less the cost of goods sold).

With business acumen, the individual would be able to “interpret” this same income statement, taking into consideration how company strategies and initiatives have impacted the numbers during specific periods of time.

Consider a simple comparison: In football, it’s necessary for players to know how the game is scored as well as how to play the game to change the score. In business, financial literacy is understanding the “score” (financial statements) and business acumen is understanding how to impact it (strategic actions and decisions).

Asking the Right Questions

When business acumen spreads through an organization, employees and managers begin to ask questions. These questions are directed not only at the organization, but also at themselves and their departments — questions about processes, products, systems, staffing and more that can lead to necessary and innovative decisions and actions.

Business acumen helps everyone understand that it’s not enough to ask, “How do we cut costs?” or to say, “We need to increase sales.” Digging deeper, employees with higher levels of business acumen will ask questions that take into consideration the far-reaching impact of potential decisions and demonstrate a greater ability to make the connections between performance and results.

Questions that could get to the root of disappointing operating ratios:

• Have production costs gone up? If so, why?

• Have we changed prices? If so, how has that affected our margins?

• Are there any competitive issues impacting our performance?

• Have there been any customer requirement changes?

• If our costs per unit produced have gone up, can we better control the efficiency of our production or service delivery?

• Is there a way to produce a greater product volume at the same cost?

• Can we raise prices, still provide value to the customer and remain competitive?

When questions become more specific, the right decisions can be made.

Business Acumen for Managers

Managers at all levels need a high level of business acumen to do their jobs. Every day, they make decisions about employees, projects, processes, expenditures, customers and much more — decisions that ultimately roll up into larger organizational results. Managers who make these decisions while looking through a departmental lens only, with a limited understanding of how these decisions affect financial results or how they are tied to the organization’s goals and objectives, are working in silos that can ultimately damage the company.

Managers are often promoted to their positions of responsibility because of their “technical” expertise. They’ve been successful customer service representatives, great salespeople, innovative researchers or well-respected IT professionals. They are now entrusted with decision making, budgets, projects and people. They often do not have financial literacy, nor have they developed a higher-level perspective about the business. Over time, especially if they move up the managerial ladder, they may develop these. Or they may not.

Organizations need managers who operate as part of the management team, taking accountability for their own results as well as the results of the entire company. Therefore, more and more organizations have built financial literacy and business acumen into managerial competency requirements and have integrated business acumen training into management curriculums.

Business Acumen for Employees

Although there is little debate about the need for managers to develop business acumen, organizations sometimes question the need for this understanding at employee levels. But frontline contributors, those who are most directly involved with production or customer service, for example, take actions every day that impact business results.

Consider the salesperson who discounts products, or the service representative who deals with an unhappy customer, or the maintenance person who notices a problem. The actions each of them takes might erode profit margin, lose a good customer or allow safety issues to escalate. Without an understanding of how their actions impact the company’s results, they might not have the context to consider alternatives.

Many organizations have determined that financial literacy and business acumen aren’t just for managers anymore. They have decided to develop a company of people who understand the business; who know what return on assets and return on investment mean; who know how inventory turnover rates affect results and the importance of positive cash flow; who see the connection between the company’s financial success and their own health benefits, 401(k) plans and more. In other words, they need people who understand the “business” of the business.

In his book Good to Great, Jim Collins says, “We found no evidence that the ‘good-to-great’ companies had more or better information than the comparison companies. None. Both sets of companies had virtually identical access to good information. The key, then, lies not in better information, but in turning information into information that cannot be ignored.”

With an increased level of business acumen, managers and employees can better interpret information, making the connection between their actions and the company’s results.

Another Reality of Today’s Business World

A public company’s operating results are well known at the end of each quarter. Analysts, investors, the media, employees–everyone has access to a company’s financial results. With a significantly increased focus on accounting improprieties over the past few years, senior management has become highly conscious of the need to provide accurate and timely financial information. And employees have become much more likely to wonder about these numbers. “Is my company being honest? Are the numbers telling the whole story?”

Without a fundamental understanding of financial results and an ability to interpret them, employees may become suspicious and, ultimately, disengaged. Disengaged workers, in turn, negatively impact productivity and profits.

CEOs of public companies, then, must ensure that managers and employees are able to understand the numbers and have confidence in them. That means effective business acumen education as well as ongoing and open communication from the top.

Former GE chairman Jack Welch said in his book Straight from the Gut, “Getting every employee’s mind into the game is a huge part of what the CEO job is all about…There’s nothing more important.”

The Big Picture

As we have become a nation of specialists, armed with new information technology and enterprise-wide operating systems, it has become easier for managers and employees to become myopically immersed in their own jobs. This immersion can have the effect of obscuring their view of the big picture. They may not consider the cumulative effect of wasted assets. They may have little regard for the objectives and responsibilities of other team members, departments or divisions. They may lack the motivation to invest personal energy in critical project work.

Organizations that engage in developing business acumen provide a clearer vision and an overall context within which employees can work, while creating an environment that is more likely to break down internal barriers. There is less waste and less ambivalence. There is increased innovation. Employees are more engaged, they understand their role and its impact on business results, and they are more likely to believe that their efforts really matter. They are more likely to think like a business owner.

Think Like an Owner

To be successful, business owners must be able to helicopter above day-to-day issues and see the big picture. They must understand how the pieces of the business fit together to impact profitability and cash flow, and they must be able to assess the risks and rewards of potential decisions. The best business owners study the numbers, ask themselves tough questions, analyze their mistakes and take decisive action.

To truly understand the business, owners have to understand how that business makes money — in other words, how it produces sales, profit and cash. Organizationally, they know that it’s about people, processes and productivity. On the customer front, it’s about satisfaction, loyalty and market share. Ultimately, every action taken and every decision made in any of these areas will impact sales, profit or cash.

When managers and employees begin thinking like owners, they, too, look at the big picture, understand how all the pieces fit together, and assess risks and rewards. They understand, like an owner, how the company makes money, how it stays in business and how they contribute to its success.

The benefits to an organization of engaging managers and employees in this kind of ownership thinking are obvious. So how can a company develop the business acumen of its people?

Developing Business Acumen: Two Stories

Entrepreneurs are generally forced to develop business acumen on their own. They are hands-on with their businesses and have to make all the decisions as they go along, whether good or bad. They either learn from their mistakes or fail.

It’s very different for managers and employees in an organization.

They aren’t involved in all aspects of the business, and they make decisions primarily within their own areas of responsibility. Since seeing the connections isn’t easy, they need to learn in some other way.

Books and lectures can help. But business acumen is best developed experientially. Learners must be able to analyze situations, ask questions, discuss issues with other learners, consider options, make mistakes and see results.

Although there are a variety of ways to accomplish this kind of experiential learning, many companies have found that simulations, which mirror reality and allow learners to experiment in a safe environment, are one of the best ways. Here are the stories of two companies who chose to educate their learners with business simulations.

Comcast Cable Communications

The NorthCentral Division of Comcast — one of the country’s largest entertainment, information and communications companies, specializing in cable television, high-speed Internet and telephone service — set out to ensure that managers and employees throughout the organization had the financial acumen required to make good decisions. A companywide survey had clearly demonstrated this need — especially for managers of employees who had direct contact with customers.

For example, if a customer calls with a service problem, frontline employees and their supervisors can issue credits to the customer’s account in an effort to resolve the issue. Although this may be exactly what is needed for the situation, Comcast realized that employees making these decisions didn’t necessarily understand that a $10 credit could ultimately require more than $100 in revenue for the company to break even. Similarly, a service technician’s visit to a customer’s home might cost $50 directly, but the company might have to sell an additional $500 in services to cover the cost.

“The lack of financial acumen among supervisors and employees was largely understandable,” says Mark Fortin, senior vice president of finance for Comcast’s NorthCentral Division. “Almost 75 percent of the company’s employees are on the front lines in roles such as call center personnel or field technicians. They are trained to be good at what they do, but their backgrounds typically don’t include emphasis on financial literacy.”

Comcast human resource executives determined that a fundamental approach to the development of business acumen was needed. However, this approach also would need to be fast, engaging and job-relevant. Expanding upon its already robust Comcast University management curriculum, the executives chose to integrate a high-energy, tailored learning experience that would provide the “basics” and, at the same time, deal specifically with Comcast terminology, concepts and strategic imperatives.

As they participated, learners made decisions about products, processes, pricing and more, and they saw how those decisions impacted financial success. In the end, it became easier for them to make sharper day-to-day choices.

“The thing that sticks out for the frontline leaders, the field technicians, and the call center supervisors and managers who attend, is the high cost of sales in our business,” says Sophia Alexander, senior manager of curriculum and metrics for the division. “It’s like a bell goes off in their heads when they realize what it costs for us to earn what we need to earn to run the organization.”

Attending the learning session is not mandatory for supervisors and managers. However, there is an unwritten expectation that they will participate in business acumen training as well as other Comcast University core programs, according to Jan Underhill, senior manager of leadership development for the NorthCentral Division. That expectation, coupled with the fact that manager compensation has recently become tied to meeting specific financial goals, has kept attendance high.

Senior executive support also has been an important factor in creating interest and awareness around financial literacy. “Getting people to sign up is much easier when senior executives like Mark Fortin are strong advocates for the program,” says Underhill.

Feedback has been resoundingly positive. On average, for example, Level 1 feedback about the discovery learning based business acumen sessions has been 4.5 on a 5-point scale. That means that the program has exceeded expectations. Better than that, says Sophia Alexander, senior manager of curriculum and metrics for the NorthCentral Division, is the empirical evidence that the new insights and knowledge have made a difference. For example:

• Participant self-evaluations indicate that financial literacy has increased by at least 25 percent as a result of the business acumen training.

• After the training, there was a 20 percent increase in the participants’ ability to use basic financial terms and concepts on the job.

• Almost 45 percent of supervisory participants report that they are using their business acumen knowledge in daily communications with staff and peers.

“Some people, particularly in big companies, feel like there is an open checkbook. They think … I don’t own the company. It’s not my problem. Somebody will pay the bills. But in today’s environment, with some very large companies in trouble, everyone needs to be part of the solution. Business acumen education for managers and employees helps the company as a whole, but it also helps employees. It’s about self-preservation to some extent.” comments Fortin.

Southwest Airlines

Southwest Airlines is one of the consistently profitable companies that makes “business literacy” a core component of its employee training programs. Every employee has a solid understanding of what a new customer, and new revenue, means to the company. Employees also know how the loss of a customer can impact the business.

According to Elizabeth Bryant, director of leadership training at Southwest Airlines, “Our training covers how the financial ratios such as return on assets and various margins are determined. Knowing that team managers, supervisors and all employees have this knowledge enables the company’s leadership to present detailed financial reports and explain to the teams where the margins need to be. Management can speak more in depth to all the employees, and the employees understand what the objectives are.”

Bryant added, “Because we don’t waste the little things, because we track every penny and every activity, we’ve all come to know the importance of each cent. With the pennies in hand, we spotlight the idea of compound interest– for example, how the small savings help us by year’s end and how small amounts of waste can conversely add up to hurt us.”

Consider the importance of a key operating metric for the airline industry — operating cost-per-seat mile. This is how much it costs an airline to fly one seat one mile. All the operating costs are divided by the total number of seat miles (the total number of miles of all the seats that were flown for a given period, whether a passenger was in the seat or not). Much of the industry has had cost-per-seat mile results at or over 10 cents. Southwest Airlines’ cost-per-seat mile is about 6.5 cents. The lowest cost-per-seat mile in the industry almost 25 years ago was just over 5 cents.

How do they do it? Certainly there are a number of factors that lead to success. However, one of the key influences is Southwest’s ongoing training in business acumen. This training ensures that employees know:

• How challenging it is to ensure ongoing profitability; making a profit can never be taken for granted

• The importance of utilizing the benefits of the good years to prepare for the tough years

• The impact of individual actions and decisions to the bottom line

In other words, Southwest invests in training to help employees think like business owners. This, in turn, produces real results, like its consistently low cost-per-seat mile. When Southwest’s learning team decided to implement a business acumen simulation several years ago, there was some initial concern about how well it would be received.

Bryant explained, “Some people, especially those without financial training, were nervous about the topic. We are such a people-oriented company that we didn’t want people to think that now we’re just a financially oriented company and everyone will be judged purely on financial performance. But we positioned the need for the business literacy training as another way to prove that we actually care tremendously for each employee. We explained that if you understand what the numbers mean then you can better understand how your work provides an integral contribution to the business.”

Southwest Airlines, according to Bryant, has never had a layoff — a rarity in the airline business. The more their employees understand the challenges of the business, the better they appreciate the importance of making smart decisions every day.

Bryant concluded that the discovery learning techniques in a robust business simulation work well in the Southwest culture because of the team orientation. “All the participants learn that they can’t individually make it all happen,” said Bryant. “They learn that they have to look beyond themselves, act and think like an owner, and realize that our efforts and financial results here are not just for a career, but for a cause. It’s this cause-oriented philosophy toward delivering a low-cost, high-quality service that allows people the opportunity to travel. Our success at achieving positive results translates to individual opportunities to work, to grow and to continually think of innovative ways to improve our business and serve our customers.”

The Classroom Advantage

These two companies chose to develop the business acumen of managers and employees by using a classroom-based simulation, facilitated by instructors at company sites. Although online options were available and were used in some cases to supplement the instructor-led training sessions, they decided that there were significant advantages to tackling this subject in a “live” session where they could leverage the power of:

• SHARED KNOWLEDGE AND EXPERIENCE: Learners bring their own perspectives and issues to the session.

• TEAMWORK: Learners work together, make decisions together and rely on each other as they learn.

• COMPETITIVE FUN: Small teams “play” against each other and enjoy a competitive environment.

• COMPANY-SPECIFIC DISCUSSIONS: The learners’ common interest in their own company’s financial and strategic issues allows for greater analysis and depth of discussions and a true “connection” between the learning simulation and the organization’s reality.

• LEARNING MOTIVATION AND COMFORT: Learners who may not be comfortable with the subject of finance find themselves playing a game in the comfort of a team environment.

Although there are a number of educational approaches available to organizations in the area of business acumen, classroom-based training that brings together teams of learners can help ensure that learning occurs and that connections to the business are made in ways that prompt action back on the job.

The Bottom Line

More than ever, successful companies will need to focus on developing the business acumen of managers and employees. These companies will realize that when their people understand the numbers, when they understand how their departments contribute to the company’s objectives and when they see how their own decisions and actions make a difference, they will begin to operate as part of a team rather than in a departmental or personal silo. And a critical piece of the alignment puzzle will be solved.

With widespread business acumen, companies can have a powerful asset — educated, knowledgeable and motivated employees. And with this asset, those will be the companies best positioned to succeed.

Direct sales success depends on making a profit.  Learn one training tip that will change your business and teach you how to make a profit from your home based business.

Start Your Business On The Right Track

When starting a new business the business plan is really the first place to start.  Writing your business plan will insure that you will succeed in your new business.  Many new home base business owners do not see the value in putting plan into place, but it really is key to your business performance and success.

Best Home Business Opportunity

The network marketing and direct sales are the perfect solution to creating an additional stream of income while still maintaining your “job”. When you invest time and money now into a network marketing business opportunity it will generate cash flow long after the effort becomes easy. Many people get started in network marketing and do not stick with it, because they do not think that the effort gives them a big enough pay check. That is because they are programmed by society to work a certain amount of hours and get paid a wage for that time. The problem with that system of a job (working for someone else in exchange for money) is you always have to go to work to receive money. In other words you are always trading your time for money. People who are financially independent understand that the best use of their time is to invest in their own business.  This is why they put time now into generating income for the future, even when they may not “get paid” today. Take the time to focus on the long term benefits of creating cash flow based on today’s efforts to create a more stable financial future for your team.

Business Plan For Tax Deductions

Are you wondering how to prepare a business plan or budget to get the most from your home office tax deductions? Business plan or budgeting is critical in business no matter what size your business is and the IRS income tax deduction is a business benefit that all home business owners want to take advantage of.  One of the best home business strategies is to use the home office deduction. A business plan or budget is an important and necessary part of starting a new business.

It is a valuable tool to help you meet goals and stay in touch with your business. A business plan or budget is really just a financial plan and it is your shield that allows you to take the home office deduction. It can be as simple or as complex as you want it to be, although a certain level of detail is necessary if it is going to be effective.

Business Plan For The IRS

A business plan or budget is not something that is pulled out thin air. It has to be based on figures that can be supported by reasonable expectations. Those expectations are based on a combination of prior financial performance and anticipated business growth (or reduction).

The plan shows the IRS that you are a legitimate business because you have an intent to profit.  Consider running your business plan or budget figures by your team leader or another small business owner you trust.

Definition of a Business plan or budget

A business plan or budget is simply a forecast of all of your business cash sources and business cash expenditures. In other words, the business plan or budget answers a simple question: In the months to come, what money will come in to your business and what money will go out?

Typically, a business plan or budget covers a one-year timeframe, delineating expected revenues and expenses on a month-by-month basis.

Many business owners don’t put their business plan or budgets down on paper, but they prepare a business plan or budget nonetheless.

Think of it as a crystal ball for your business. By looking at your business plan, you get to see the future. If you don’t like what you see, you can change the future by making business decisions that will alter your inflows and outflows.

To be sure, a business plan or budget can greatly improve your chances of success by allowing you to calculate future needs and plan profits, spending and overall cash flow as well as provide you with the IRS home office deduction to create income as well.

Direct Sales & The IRS

Direct sales and network marketing is one of the best income tax reduction strategies there is in the 21st century. Direct selling businesses open the door for income tax deductions. Did you ever notice that all rich people have a business? It is not because they are rich that they got a business, it is the other way around. They developed a business so that they could take advantage of certain tax benefits and that assisted them in gaining wealth. The home business is a legitimate income tax reduction program that the IRS has put into place. Anyone who owns a business has a legal income tax reduction package to utilize to their advantage. If you are an individual or family struggling financially, the quickest way to increase your cash flow without too much time commitment is to start a direct sales or network marketing business.

The majority of small business owners are entrepreneurs who are either still working outside the home or who began running a home-based business. A home-based business is good for many people but also requires a lot of discipline. Some people lack the discipline to get work done in a timely fashion since it can be easy to get sucked into everyday life – including children, email, chores and television. Motivation is possibly the most important factor to consider before starting a business from home.

The bulk of home-based businesses are started based on a particular hobby or interest that the owner has. This can be any form of product or service. There are certain steps to get a home business up and running successfully.

I have found that many people start their home businesses based on myths, misconceptions and half truths.

Do you really know how to start to build home business?

First thing-very important thing-you have to learn how to build your home business.

It is important to learn and take over the experience from people who have this know-how; and to get it with a proper help. Building a business and generating profits online has become simple if you partner and learn with people who know what they are doing.
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Home business ideas, home business opportunities, home business resources, advice for starting a home business or to help you work at home – everything you need to run a successful home based business-here for you. Whether you are brand new to this, or an experienced internet or network marketer, there is something here for you.

No one tool, book, website or solution will be able to give you everything you need to succeed, but I believe wholeheartedly that if you apply the principles you will learn in this training system, you will be well on your way to achieving whatever internet or network marketing success you feel worthy.

The TRAFFICplan is  a community and training center of home business information and tools for the home-based small business entrepreneur who wants to  work from home.

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Starting a home business is a great option for people who want to be their own boss and have a product or service to sell. It is a good idea to follow each of these steps to set up a home-based business; it will set you up for success.

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