About the Founder of BizWisdom
Neville Joffe
Understanding accounting and business concepts is different from being able to explain it effectively.
At a crucial moment almost 30 years ago, the idea for what would become a patented and award-winning approach for entrepreneurs and corporate leaders to improve their business performance began to take shape.
Neville Joffe had a serious problem: the 400 employees at his manufacturing company had a shaky-at-best understanding of how to increase operating performance and, in turn, improve their corporate incentive plan. The knowledge gap affected the company's productivity, cash flow, and bottom-line growth.
He first tried teaching these concepts himself, but all he got back were confused stares. He then hired a college professor who continued to do the wrong thing more efficiently. He was not about to give up. Neville knew that he could "scrape the profits off the floor," so he thought of a new idea.
His first step? Toss out the traditional teaching methods of teaching finance for non-financial managers. He needed to explain basic business and financial principles in plain, relatable language. He cashed $1,000 in small bills and crumpled them into a plastic garbage bag. He gathered the staff and poured the crumpled bills onto a table in front of them.
"This is called revenue," he said. He then put a handful of cash in a bucket labeled "wages." He repeated the exercise with buckets labeled "materials," "rent," "maintenance," and "insurance.". And then, in front of his shocked employees, he tore up many of the remaining bills and threw them into a "waste" bucket. "Why are you so surprised?" he asked." You do this every day you just don't see it."
At the end of the demonstration, some cash remained on the table. Neville said, "what's left on the table is profit." He shifted some of the remaining cash towards the crowd and said, "This is for all of you for your hard work this year. The remainder is for the owners in return for all the financial risks they take to support the business."
"The group was stunned, but they finally understood the message of why and how to improve business processes – and increase their share of the profits."
After the meeting, Neville realized that knowing the "pieces" of how to make a business profitable (things like "reduce costs" and "increase sales") was not enough. His employees needed to understand the principle of "cause & effect" and how each decision could be financially successful in one part of the business while having a negative impact on another. This newfound level of business acumen knowledge helped all stakeholders make more sound strategic decisions resulting in a dramatic improvement in profitability and sustainable free cash flow.
In 1997, after 8 years, he sold his interests back to the original owner and armed with that knowledge, Neville founded AME Learning (and subsequently BizWisdom) which eventually became a global leader in providing financial literacy resources to universities and colleges throughout the world. He has since educated more than 25,000 corporate people all over the globe.
