Business Economics: Finally – A Use for Your Econ 101 Class!

Economics can seem like a dreary field of study – plus, it has too many charts and graphs for anyone’s comfort.  But an article in Inc. Magazine argues that buried in the tedium of economics is a powerful key to increasing employee engagement.  And that as a business leader, you should focus your staff on the economics of your business, not just on the financials.

While financials provide valuable insights and are a necessity of doing business, they don’t always provide an intuitive view into the operations of the company.  That’s where the economics behind the numbers can help.  Establishing and tracking “economic” performance metrics (e.g., cost and schedule performance, productivity, new bookings, retention, etc.) illuminates how employees’ work affects operational outcomes, not just the accounting numbers.

And when people see the connection between their work and those specific metrics, they realize that they are helping to “make the news” at the company instead of just “reading the news” in the financials.

And if you have access to the Wall Street Journal, also see this article about how companies are trying to jazz-up their annual reports to make the financials and economics of their businesses more engaging to stakeholders.