Is Financial Intelligence a choice?
We at Relativity have worked with thousands of employees, managers, and leaders in Indian based companies, sharing them knowledge through our Relativity Knowledge Series about the financial side of the business. Our policy is that everyone in a company does better when they understand how financial success is measured and how they have an impact on the company’s performance.
Our term for that understanding is financial intelligence. Greater financial intelligence, we’ve learned, helps people feel more involved and committed. They understand better what they are a part of, what the organization is trying to achieve, and how they affect results. Trust increases, turnover decreases, and financial results improve.
When we say “everyone,” we mean everyone: It is for the senior HR executive who has not yet picked up the financial skills he or she needs to become an effective advocate, leader, and business partner. It is also for junior and midlevel people on their way to positions of greater responsibility —the HR leaders of the future. Keeping that in focus, we should begin with an observation that we think many —perhaps not all. HR people are ambivalent about finance. It is often they who call us, asking us to develop and deliver training courses for other managers or leaders in their organization. They seem to understand the importance of nonfinancial people learning the financial side of the business—the statements, the measures, the tools. Moreover, some HR professionals aren’t sure about applying the lesson to themselves.
HR in the past concerned itself only with the people side of the business and with a few specific financial metrics, such as the cost of turnover. Some HR professionals still don’t think or talk much about the broader financial side of their organization.
We know that human resources as a discipline has been chipping away at this limitation for many years now. Journals, conferences, and books have all made the point that HR people need to speak the language of business if they want a seat at the strategic table. Most senior HR leaders have gotten the message and are urging others in the field to learn more about business.
So, what we say is that every employee especially the HR team must have proper knowledge of Business finance and how decisions impact their organization, so that they can concentrate more and work towards the financial growth of the company along with the people management.
The conclusion is that Financial Intelligence is really not a choice but a need.