The Most Important Training You Can Give Your Employees

Jim Hessler, Founder/President, Path Forward Leadership

So you spend a lot of money training your employees, making sure they know the basics of their job, the specific qualities of your products, and how to enter orders and expense reports on the company computer. You even conduct training on safety, and you make sure everyone understands that sexual harassment is a BIG no-no.

But of all the training you provide, do you provide perhaps the most fundamental training of all? Do you teach every employee to understand how your business model works and how it makes money?

Your business has a profit and loss statement, it has cash flow, it has competition, it has marketing strategies, it has development budgets, it has payroll cost ratios, and it has to closely manage the Cost of Goods Sold.

How much do your employees know about any of this? Do they think your gross margin is 75% when it’s really closer to 25%? Do they think management and ownership is bleeding the business dry by taking home huge amounts of cash each year? Do they understand the risks of ownership, the cost of money, the challenges of taxation and government regulation? Do they know which competitors are beating you and why, and which competitors you need to beat? Do they know what your financial and non-financial goals are?

I argue all of your employees – down to the people who answer the phones and sweep the floors – deserve to know all of these things. And best of all, if they understand how your business works and how it makes money they’ll be better employees.

In any business, our employees need context in order to feel engaged and motivated. They have to know what their behavior means in the biggest possible picture, why it’s important they answer the phone in two rings, why it’s important they turn off the lights when they leave the office, and why it’s important they participate in that continuous improvement project you’ve been badgering them about.

Most employees – even those highly educated ones – need to understand the nuts and bolts of your business. Each business and each market are different, and each owner has different needs and goals. Educate your employees on all this, and include this kind of business fundamentals training in your training plans. It will result in employees who are more engaged and make better, independent judgments. If they don’t know where their paycheck comes from they may not do the best job of earning it.

About the Author

Jim Hessler
Jim Hessler bootstrapped his way from retail work into a successful career as salesman, sales manager, Fortune 500 executive, and corporate turnaround engineer. Along the way, he developed The Leadership Platform, a proven model for training managers to become sustainably better leaders. It became the basis of his leadership primer, Land On Your Feet, Not On Your Face: A Guild to Building Your Leadership Platform. Jim is the founder of Path Forward Leadership Development Services.

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