Business Acumen: In 2013, over 500 Beam personnel went through our 2-day Commercial Acumen workshop. The majority of people were non-finance employees. Here’s what they took away:
“We were able to generate an additional $700,000 (profit) for 2014 which will be ongoing.”
“The course gave me a better understanding of how management, customers and shareholders view the business. It helped me to realize how my decisions impact the total company.”
“I have applied the ROI model in my everyday settings within my accounts, and in discussions with my team. Making sure we are investing behind the right brands. This happens at least once a week.”
“I feel more comfortable in discussions with Finance. I have a clearer understanding of the impact of inventory and accounts receivable and payable on the business.”
Executive Summary
Income|Outcome has been highly effective at helping Beam employees overcome their fear of finance and getting them more involved in the budgeting process. It is also improving communication throughout the company. Six weeks after each workshop, surveys showed wide-ranging benefits already taking hold at Beam. These are in the form of better pricing, shorter meetings, stronger inventory management, more attention to cash flow, and improved budgeting.
Survey Method
In co-operation with Beam Inc. and Percept Research, Inc., all 577 workshop participants were sent surveys immediately before, and six weeks after, participating in the Beam Commercial Acumen workshop. The surveys contained open response questions, and Likert scale questions with open response range from 1 (not comfortable) to 5 (very comfortable). From this data we have been able to gain insight into the benefits of
Income|Outcome. Data from pre- and six week post-workshop surveys show a significant increase in all measured areas of business acumen for participants with and without a finance background.
Overcoming Fear of Finance
Not everyone is afraid of finance; some people just don’t like looking at a report that includes finance numbers. Whatever the reason, the result is the same: people who do not understand finance. And although they are involved in the business process, they are not fully engaged – they won’t provide accurate information, won’t manage the budget, and won’t make decisions that benefit the company.
Income|Outcome is making life easier and more efficient at Beam by overcoming fear of finance, and giving people the tools they need to work effectively with numbers – and with each other.
Cash Flow & Budgeting
All employees impact the business. Shouldn’t they all understand how it works?
Surveys before the workshops showed that only 65% of non-finance people realized that their position had an impact on cash flow at Beam. Similarly, 64% were comfortable being involved in the Beam budget process. During Income|Outcome participants experience the benefits of using financial planning tools and are able to see for themselves how their decisions impact company performance. The result? Six weeks after the workshop 85% of respondents say their job has an impact on cash flow and a full 90% of the people feel comfortable with the budgeting process!
After the workshop, 90% of the people felt comfortable with the budgeting process!
Improved Communication
Good communication happens when everyone approaches a subject from a shared place of understanding. We say ‘finance is the language of business’. When everyone ‘speaks finance’ they can better communicate with the Finance Department and each other. Meetings are faster, the budget process speeds up, information flows more rapidly (and more accurately), and everyone makes better decisions.
Quantifying ROI
It is challenging to quantify the ROI for business acumen training because the effect of better business acumen is widespread and people may not even realize they are making better decisions.
However, a survey of Beam employees provides proof the Income|Outcome workshops are driving behavior change that directly improves Beam’s bottom line results.
“We were able to generate an additional $700,000 (profit) for 2014 which will be ongoing.”
Income|Outcome is driving ROI across Beam
Sales people respond to finance requests quickly and with accurate data because they understand why they are being asked for the information.
“I have been better able to communicate our goals to my distributor, and the reasoning behind them.”
Sales and category owners more effectively use prices and discounts to drive profit rather than revenue:
“Negotiating discounts of 5% on medium and long term contracts.”
Buyers are more savvy negotiators and ask for longer payment terms because they recognize the value difference between paying now and paying later:
“We are trying to avoid down payments or anticipated payments. We are trying to share with the employees the impact of paying vendors sooner than 60 days and reviewing payment terms before accepting proposals.”
Production is more careful managing working capital because they understand the cash flow implications:
“I’m working to reduce wasted agave inventory thereby saving 294,000 Mexican pesos/year.”
Finance people are saving time.
“The financial impact is the hours that Finance would need to invest if we don´t forecast it properly. We can quantify this as 3 days per employee and Latest Estimate in order to adjust the budget and provide explanations. If the employee cost per day is, for example, €200, the saving could mean €1,800 per year and per employee involved.”
Some Beam participants did not identify specific actions but still credited the Commercial Acumen workshop as having individual
impact with value of $5,000-$20,000.
Going Forward (2015-2016)
Beam Inc. is now Beam Suntory. They are continuing their global roll-out of the commercial acumen workshop.