Each holiday season brings the same dilemma over what gifts to get the people in our lives. I go through the same troubles with all you "nice boys and girls" who read this column in trying to think of a year-end topic to fill your stocking with practical value (and not stick you with those sad last-minute gifts that come our way; tic-tacs, tube socks, cherry-flavored chapstick, etc.) And then it hit me . . . I can give you a real training lesson that you can deliver to your own team, on your own time. So today I'm offering up a real barn-burner of an exercise with my compliments.
"The Life of a Sale" is a timely workshop — one that works well with all different company types and sizes. This clever game will spread important knowledge about sales, real profits and that critical business lubricant called "money." Having just watched a panel of financial experts on CNBC tell me that the U.S. economic strength will be severely tested in 2008, it became clear to me that if you're going to educate your people about anything, it better be the business of money!
In my career, I've found too many workers who somehow believe that a million dollars in gross sales means you've got a cool million sitting in the bank! This exercise will help eliminate gross misconceptions like that, as well as other wrong-headed assumptions that nonfinancial employees make about your business' cash and profit position. Most importantly, "The Life of a Sale" will get everyone on the same page — working smarter, harder and chasing the same goals.
WHIP-SMART WORKSHOP: 'THE LIFE OF A SALE'
Premise: This is an interactive exercise, involving employees and management, where actual cash is "transacted" among the attendees (employees play the role of customers, suppliers, vendors, bankers, etc.) in a hands-on game of sales, costs, expenses and investment. Using your own real world finances, a scale model is made of your company's profit and loss performance from your most recent fiscal year. The entire year's accomplishments are converted into a single, easy-to-comprehend and still proportionate $1,000* transaction. The game tracks the life of this sale. (*The $1,000 model works best since the number is easily understood and realistic enough to give the exercise validity.)
Purpose: The objective is to increase your staff's awareness and understanding of your company's finances and how their performance affects profitability and the supply of cash. As the employees play and observe the game, they will be exposed to some basic financial elements, including fixed vs. variable expenses, cost of goods sold, the importance of pricing stability, customer service costs, equipment expenses, hidden employee overhead, taxes, depreciation, the role and cost of credit, the near constant drain on profits and even a small taste of the double-entry accounting system.
Props: First, you will need $1,000 in hard U.S. currency. Do not use Monopoly money or other substitute; real learning won't happen with fake cash. Break it down into game-friendly denominations and make sure to get plenty of tens, fives and ones. There will be many smaller amounts changing hands during the game and you don't want to make it any harder because you had the thousand bucks paid out in Swiss Krugerrands and wampum. Keep the game as close to real life as possible.
You will also need prepared paper slips large enough to be seen by everyone that will be used to demonstrate the type of expense being discussed and the actual cost. They can be color coded to help group them by expense type. Two easels will make the presenter's job easier but one will do in a pinch.
As always, blackboards, whiteboards, overhead/pc projectors, chocolate, caffeine, sugar, fresh air and well-made handouts to reinforce facts or numbers, etc. will make for a better workshop. Be creative . . . allow everyone to first bet/predict the amount of net income they believe will be left over after the expenses finish their feeding frenzy. I once used a kid's high-tech cash register to lend authenticity to one session!
Tips For The Teacher: Your mission is to teach through storytelling. Make certain you know "the story" of your numbers; the heroes, the villains, the surprises that hurt or helped, the memorable plot points, the light-hearted moments and the dead serious moral of the story. As with any presentation, success comes from preparation and your ability to encourage everyone to join in. Set the right mood and expectations early and often — talk up the value and importance of the workshop. Radiate excitement to your class regardless of the numbers' performance. Your employees will look to you for cues during the exercise; make it easier on them by super-sizing your gestures and your expressions. Make it look like, sound like and even smell like a professional workshop for business professionals (not some average get-together for fabricators or installers or secretaries). Produce a meeting that only the very best companies could produce.
Speaking Freely: This exercise can't come to life without total two-way trust and confidentiality. Plan for a brief premeeting to discuss the explicit nature of the information you'll be sharing and how your staff will benefit. Most firms have each attendee sign a special confidentiality agreement as their ticket in to the workshop. This not only protects you but also enhances the perception of the meeting's value; providing another piece of the "differentiation puzzle" that we're always after to enhance your firm's brand. Prepared confidentiality agreements are readily available on the Internet.