Singapore - Managers are unable to make effective decisions that align itself with the overall business strategies because they lack the larger business oversight and do not understand the business market at large.
According to Kristian Borglin, managing director at BTS Asia Pacific, research has proven the more people that understand where the company is headed and its overall strategies, the better the financial performance of the company.
But why can't managers better understand the overall corporate strategy? In Borglin's view and based on his years of experience at Electrolux, he feels a lot of the blame lies with senior management and the methods in which they present their corporate goals to middle managers. He describes the traditional PowerPoint presentation slides of yesteryear as "ineffective one-way" communication tools, which results in managers not fully comprehending the larger picture.
Furthermore, Borglin adds, companies that fail to engage their managers in the company's larger picture may face "worsening bottomlines". They may also face difficulties retaining their middle managers as well. "Managers today demand involvement and understanding of where the companies are headed. And if they don't get that, they quit and go to another company."
While business acumen is mostly gained through experience, Borglin says companies are now also looking to sharpen their employees' business acumen through training. However, traditional training methods yields low learning retention rates. He cites a study conducted by Jeanne Meister, former president and CEO of Corporate University Xchange, which found that sitting in lectures and reading only produce retention results of 5 to 10%. However, through experential and hands-on learning, or what Borglin describes as "learning by doing", the retention rates dramatically increase to 75 to 80%.
Therefore, for HR practitioners to better develop their employees, Borglin suggests HR provide case studies and business simulations for their employees to practice in risk-free environments. This helps employees get a sense of the business function at large and how functions play off into each other. Now with the economic downturn, Borglin says companies should not cut back on learning & development, but should invest in their employees instead. "Now people need better business acumen and better leadership to cope with difficult situations."