5 Key Benefits for Companies When Employees Understand Business Fundamentals
Knowledge is critical in business. Whether it is the knowledge of customer needs or a basic understanding of the business environment, everyone in an organization must be willing to learn and upgrade. It may be a common misconception that business fundamentals are best left to business owners or top executives of a company.
The truth is, unless everyone working in a company has some amount of basic business acumen, it cannot outrun its competitors. Business leaders in every organization are well-equipped with business fundamentals. But what do the employees know? How do they contribute to the company’s growth? How do they make decisions that align with the company’s goals?
Every member of your company is responsible for its performance and position in the market, in one way or the other. When they understand the business and share the company’s goals, the growth in reputation and profitability can be exponential.
What business fundamentals must employees know?
It is not expected that an employee would be thorough with how to run a business successfully. Every employee has their own set of skills, and they are contributing to the organization in their own way. But to be good at what they do, they need to at least understand a few business basics.
Fundamental knowledge of business includes knowing the answers to questions like –
- Who does the business cater to?
- How does the business operate?
- What are all the products/ services that the business offers?
- What are the long-term and short-term strategic goals?
- What are the primary areas of revenue generation for the business?
- Who are the competitors?
- What is the current state of the industry in which the business operates?
- What are the ongoing market trends?
If an employee can answer these basic questions more or less accurately, they have a sound idea of how the business runs. This knowledge, in addition to their own skill set and qualifications, can be an asset to the company.
What are the five key benefits of employees understanding business fundamentals?
There are many ways a business can benefit when employees are well-informed and aware. Here are some key advantages –
1. Employee engagement and productivity
Employees who understand what the business is, also understand how their role fits into it. This gives them clarity and increases engagement and productivity.
2. Better decision-making
Every employee has to make decisions in their own capacity. Understanding business fundamentals ensure that every decision they make is well-thought-out and aligned with the business’s strategic goals.
3. Preparing for leadership roles
Understanding business fundamentals prepares employees for more senior roles within the company. If employees are not adept in business basics, a skills gap may be created in the organization, and finding candidates to fill in leadership positions in the future can be challenging.
4. More meaningful inputs
Employees who have strong fundamentals of business management can contribute much more to the organization. They can offer more useful inputs and ideas to help the business grow. They understand what the company needs and what it is lacking.
5. Better communication with stakeholders
Employees who have a good fundamental knowledge of business are also able to communicate better with external stakeholders like customers, partners, vendors, and investors.
As employees see their contributions driving results, it motivates them to learn more and upskill themselves. This becomes a cycle of continuous improvement.
How to impart basic business knowledge to your employees?
Though employees have to be proactive and willing to learn, it is primarily the responsibility of the business leaders and managers to ensure knowledge sharing is given priority. When the organization creates a culture of continuous learning, employees become more accustomed to it and start showing more interest in learning and development activities.
Communicate business goals effectively
Knowing your business first requires your employees to know the business's goals. Employees have their personal goals of growth and progress. When they know the business’s strategic goals too, they are better able to align these and make decisions that contribute to both their own and the company’s growth.
Communicate the goals from time to time and tell your employees how they contribute to these goals. Seeing that their contribution to the business matters motivates them to be more productive.
Encourage tutoring and training
Managers and leaders are often caught up in their own assignments. But it is important to realize that mentoring their employee is just as important. When employees can work with the people who are handling the business directly, they get a first-hand experience of all the things that go on at the higher levels.
This gives them more clarity and a better understanding of what the company actually does. Managers and leaders can mentor employees one-on-one or conduct training in batches or adopt other methods that they feel are most effective in imparting enriching knowledge to the people with potential.
Trainings like BALINCA can be a big help in this regard. BALINCA builds simulations that help teach your employees finance and business fundamentals, unconventionally. Unlike traditional workshops or training programs, tools like BALINCA can give employees hands-on experience in finance, management, and decision-making. The simulations allow people to make mistakes and learn from them too, eventually preventing such missteps in the real world. Click here to learn more about BALINCA.
Encourage collaboration across departments
Often employees are limited to working within their own teams or within their own departments. This restricts their view to only that work that is being handled by that particular department.
A business has several other functions too. And employees need to have exposure to these functions to have a better grasp of their work. Encourage cross-functional teams and inert-departmental collaborations so that everyone can learn something new from time to time. This gives them a more holistic knowledge of the business.
Involve employees in customer/ client interactions
It is usually only the sales or customer service teams that directly handle clients. But a good understanding of customer expectations and market demands is an integral part of business fundamentals. To develop this knowledge in your employees, you may let them interact with customers once in a while.
Let them be present at client meetings when possible. If a customer has a query relating to something they are handling, forward the call to them so they can answer it.
Encouraging them to take up client-facing roles will reiterate what customers expect and how the business delivers on these expectations.
The returns on this investment are worthwhile
A business is made up of the people that work towards its growth. Your employees need to know what they are working for. With this knowledge within their reach, they will understand what is expected of them and also know what they should expect in return. It brings with it a sense of belonging, which is crucial to employee retention, employee engagement, and the overall success of a business.