Below is one of two case studies presented on this site by the Business Literacy Institute that illustrate the importance and effectiveness of financial intelligence for businesses and corporations. We invite you to use these case studies in your reporting.
The book authors, Michael Siegmund of MacDermid, and Laurie McGraw of the Gulf Coast Regional Blood Center are all available for interviews. To request interviews and/or more information, please contact Joanna Brody of Brody Public Relations at (310) 582-0085 or Joanna@brody-pr.com.
Founded in 1975, Gulf Coast Regional Blood Center in Houston, Texas, will have a $78 million annual budget in 2006. It provides for the majority of the blood needs to a 24-county area in the Texas Gulf Coast region, which has a population of about 5.25 millionimpressive numbers for a nonprofit organization. However, in 1997, the organization ended up in the red for the first time in its distinguished history. And it happened again in 1998.
Many factors contributed to the organization’s slump, including insufficient blood collections, a lack of attention to the little costs, and the employees’ unfamiliarity with basic business knowledge and the fact that even in a nonprofit, money matters.
The Blood Center turned to the Business Literacy Institute (BLI), a consulting firm that helps organizations create “financial literacy.” BLI began working with The Blood Center in 2000, creating a financial literacy course designed to educate the employees about the basics of their business, which was based on three areasfinancial stability, compliance and adequate blood supply. The program, called “The Business of Saving and Sustaining Lives,” included teaching everyone about how the organization measured financial success, its financial and operational goals, and how each individual’s job contributed to the financial successor failureof the organization. As part of the initiative, the concepts taught and the language used in the program were also used by managers to ensure that financial literacy became part of how they managed.
Beginning in 2001, everyone in the organization600 employees and managerswent through financial literacy training. The follow up included ongoing discussions in each department about their numbers and how they could improve them. The financial health of the organization started to improve.
Says Laurie McGraw, director, education and training, “We handed out copies of each department’s financial reports to everyone so they could see how much things cost. That was a real eye-opener for people. They just had no idea what we were spending on big and little things. Sharing the information was just as important as teaching the basics of the business.” The Blood Center continued to update the program annually and required new employees, managers, and leaders to take the course so that everyone in the organization understood their business.
In 2004, the administration and BLI modified the course, creating a game that focused on how every department and every job in the organization impacted the three key areas of the organization. Everyone, including The Blood Center leaders, played the game.
According to McGraw, BLI’s courses were “two of the most successful training programs ever. All employees have a direct line of sight into the organization’s financials, and everyone knows how they individually affect the success of The Blood Center.” Now every new employee must go through a whole day of literacy training. The Blood Center still holds the class once a month for new employees and for anyone who wants a refresher.
In 2004, The Blood Center met all its corporate goals: financial, compliance, and blood donor collection. And it is on track to exceed its financial and collection goals in 2005. Another benefitemployee turnover, which is a significant financial drain, has decreased.
“I believe wholeheartedly that the financial literacy training, along with other programs such as Commit for Life, contributed to this turnaround,” says McGraw. “It was extremely successful. Once we started training everyone in the basics of the business, our numbers started to get better. It greatly improved our bottom line and employee retention, and is helping save more lives.”
Now, after nearly 20 years of consulting nonprofits and public and private companies, the owners of Business Literacy Institute, Karen Berman and Joe Knight, have put their collective wisdom into a book for anyone who works in an organization to read. Appropriately titled FINANCIAL INTELLIGENCE: A Manager’s Guide to Understanding What the Numbers Really Mean (Harvard Business School Press; Jan. 12, 2006; $24.95/hardcover), the book focuses on what managers need to know about finance. It also unveils some of what finance and accounting professionals know, but managers haven’t discovered: that finance is an art, not a science, so managers must understand the estimates, assumptions, and biases in the numbers to truly manage effectively.
About Gulf Coast Regional Blood Center
Gulf Coast Regional Blood Center is asking its donors to Commit for Life. It takes three simple steps: 1) Donate once per quarter; 2) allow The Blood Center to contact you; and 3) spread the word, encouraging others to Commit for Life.
The Blood Center is the primary supplier of blood components to more than 220 hospitals and health care facilities in a 24-county Texas Gulf Coast region.
Donors must be at least 17 years of age, weigh a minimum of 110 pounds and be in good general health. The donation process is simple, taking only about one hour.
For additional information, call 1 (713) 790-1200 or 1 (888) 482-5663, or visit The Blood Center’s website at www.giveblood.org