Invest in your employees to help your company succeed
LORD Corporation is a worldwide leader in adhesives, coatings, and vibration and motion control, with annual sales exceeding $850 million. Part of the Company’s formula for success is their placing a premium on improving employees’ ability to impact the company’s financial success. LORD does this by:
- investing heavily in employee training and development
- giving all of their employees the same incentive measures, with performance being judged on employee impact on both the profits after tax of the corporation and on operating cash flow
- holding quarterly meetings explaining the corporation’s key financials to all employees – something most private companies fail to do.
LORD chose Income/Outcome business simulations to develop business acumen in their employees, many of whom are engineers and operational staff. This has helped them understand the implications of financial reports and how their actions could affect key corporate performance metrics.
We spoke to Jon Kline, Director, Corporate Reporting & Accounting. Jon is in a unique position to judge the impact of the workshops because he not only has been facilitating the workshops since their inception at LORD, but he also helps prepare the financials for the quarterly financial reviews.
“…the participants learn more quickly because most people learn better visually…”
– Jon Kline, Director, Corporate Reporting & Accounting
Jon told us that the workshops are very popular and receive some of the best feedback of any training classes at LORD. “I think it’s because the students are very engaged and get caught up in the competitive aspects of the game. About a quarter of the students comment that they wish the class went on longer than one and a half days.”
The visual finance methodology, in which the players develop a 3D map of their company’s finances during the game, is a valuable part of the workshop for Jon. “I think the participants learn more quickly because most people learn better visually than orally or by reading. Seeing the interaction between the balance sheet and income statement during the game makes it easier to understand the relationships. This is particularly helpful for our non-financial employees.”
Jon moves from the game to real world learning by using the most recent quarterly financials later in the workshops. “I go over real examples, such as the impact of increased inventory on our operating cash flow, the result of a gain in payables, or the effect of our overall working capital or capital spending on our cash flow – and a lot of light bulbs go off in the class – it’s amazing.”
“We’ve had about 120 employees go through the program since 2011 and expect to have 150 in 2013 alone. We’ve added our first overseas workshops in Europe and we’re running workshops for a new acquisition company, which should help those employees quickly learn more about LORD and our finances.”
“The workshops have been a great success for LORD. We’re starting to see a lot more interest in the quarterly meetings and getting better comments from staff after the meetings. Our operating cash flow is strong with improving cash metrics. I hope it’s attributable to the training although I can’t directly link it.”
Based on the positive feedback and popularity of the class and its effectiveness at quickly teaching business concepts, LORD has been steadily increasing the use of the workshops. The first classes were limited to managers and above and were only offered in the United States. Now they’ve opened the workshop to all types of employees, from individual contributors to directors and senior managers.