A critical aspect of employees thinking as owners is financial literacy. Since business generally involves making money, it is necessary to understand how that happens within an organization. Financial literacy does not absolutely mean financial statements though. It is simply connecting me to profitability, knowing how I impact it. If that can be conveyed with metrics relative to that particular employee’s role, then they can have a healthy level of financial literacy. For instance, with manufacturing employees that work directly on the line, we have focused on three key metrics: $ per employee, on time shipping and outgoing quality. Outgoing quality provides an overall barometer as to the attention to detail and general manufacture of product to our standards. It is easy for employees to understand that parts are most costly at the end of the process as well as the fact that anytime an order it rejected at outgoing, rework takes away from our profitability. Likewise, on time shipping is the primary measure of customer satisfaction. Their primary concern is getting parts when they need them. Finally, addressing $ per employee provides manufacturing personnel the most direct perspective on profitability. Educational efforts have focused on how they can impact this number with things like cross training, improving rates and yields. We have also shared that this metric is critical because it serves as an indicator of the amount of money available to share per person. It limits salaries, it limits profit distributions and shows what costs can be absorbed for healthcare and other benefits.

The manufacturing employees have responded tremendously to the metric communication and education. In addition to thanking me personally and sharing how much they enjoy learning this material, the performance screams the loudest. Year to date, the outgoing quality measurement, which is percentage of orders rejected at outgoing audit has been cut in half. Last year, the $ per employee metric improved an inflationary 3%. This year, the same metric has improved 12.5%. Education and empowerment has obviously been exceedingly more successful that project work alone!