No matter what an employer’s purpose, be it a for-profit company or government agency, financial solvency and strength must be a major objective. An organization capable of not just meeting the budget but beating it stands a much greater chance of accomplishing strategic objectives, ensuring stability and growth.
To this end, employees play a critical role. When staff members understand how they can contribute to your organization’s financial success, everyone should be able to better work together as a team — improving efficiency and productivity.
Start with Strategic Planning
Every employer’s financial stability is at least partly attributable to a sensible strategic plan for the year. Generally, such a plan should include efforts to uncover and eliminate operational shortcomings that are inhibiting profitability (if that is your objective) or budgetary success.
One typical example is employees interacting with customers poorly, giving a bad impression, or providing inaccurate information. Word of mouth travels quickly these days. Another common issue is pricing or fee structures that turn off customers or bring in inadequate revenue. Supply chain disruptions also are a common challenge — particularly since the COVID-19 pandemic hit.
Ask employees whether and where they see such problems. Then, assign a negative dollar value to each financial weakness that keeps your organization from reaching its full potential. Once you start putting a value on financial inhibitors, you can add them to your income statement for a clearer picture of how they affect net profit.
Make Needed Adjustments
After you have identified one or more inhibitors to your organization’s financial success, adjust your strategic plan accordingly to educate and motivate your employees.
To do so, adjust or redefine the plan. Then, work with managers and other key employees to devise specific revenue-building or cost-cutting initiatives. Calculate how much each initiative could add to the bottom line or otherwise improve your financial status. To arrive at these values, you will need to estimate the potential income of each initiative — but only after you have projected the costs as well.
Assign someone to champion each initiative. When financial improvement strategies become everyone’s job, they tend to become no one’s job. Employees need to know their respective roles, but they also must know to whom to for leadership.
Above all, communicate clearly and build consensus. Explain each initiative to employees and outline the steps you will need to achieve them. Again, it is critical that every employee understand how his or her job contributes to the organization’s success. However, perhaps even more important is that workers believe in the initiatives themselves.
The economic outlook for 2021 still looks generally optimistic as mass vaccinations and other efforts are expected to reduce the most negative impacts of the pandemic. Now is a good time to review your strategic plan and work directly with your staff to strengthen your organization’s financial standing. Our firm can help you identify areas of improvement and implement the right initiatives.