By Mike Wright

Business Acumen: 300% ROI

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March 8, 2011 | Categories: Articles & Insights

Recently a leader in the aerospace and defense industry hired MetrixGlobal (an independent Training ROI research firm) to evaluate their Building Business Acumen® course (that's us). At the beginning of the course we asked the participants the same ten questions that we've been asking at the beginning of every course since 2002.

  1. How much cash is on hand?
  2. How much cash is generated from operating activities?
  3. What are total revenues (sales)?
  4. What is the net income?
  5. What is the net profit margin?
  6. What is your inventory turnover?
  7. What is your return on assets (ROA)?
  8. How much are sales growing year over year?
  9. How much is net income growing year over year?
  10. How much is earnings per share (EPS) growing year over year?

This little pop-quiz has probably been conducted tens of thousands of times to over 75,000 business people in over 20 different countries - and the results are pretty consistent: 80% of employees don't know the answers. This client was no different.

So we got to work helping them understand why these measures are important, how to find the answers to these questions, and how to make better and faster decision based upon their understanding of these questions.

This sounds all very number-ish, but MetrixGlobal's study didn't evaluate a participant's financial understanding, rather they measured how well participants applied what they learned and the impact these actions had on their organization.

The study found that overall two-thirds of participants applied what they learned, resulting in improved business performance, teamwork, collaboration, and communication. It went on to report that manager's decision-making and people's actions are now more tightly aligned to business priorities. The report estimated that these benefits produced more than a 300% return on investment (we'll take that).

There's no question that participants increased their financial literacy, but that wasn't the end goal. The client was looking to…

  • Increase bench strength
  • Accelerate the development of their high-potentials
  • Clearly communicate vision and strategy
  • Address key business challenges
  • Create alignment around their executive initiatives

They recognized business acumen as part of  the solution and this study has validated their strategy. But the study also validates what we've been pushing for years, when you help employees understand the measures and teach them how to tap into the right people, processes, and corporate knowledge you get better results - you get people with business acumen - you get business leaders.

You can download the report here: MetrixGlobal Business Acumen Evaluation