Afraid of numbers
(The Philippine Star)
Updated February 10, 2013
The math teacher was questioning Danny during an arithmetic lesson.
“If you had P10,” said the teacher, “And I asked you for a loan of P8,
how much would you have left?”
“10,” said Danny firmly.
“10?” the teacher echoed, “Why 10?”
“Well,” replied Danny, “You may have asked for a loan of P8, but that doesn’t mean you’ll get it!”
Math! Do we really get it?
“I hate math!” Do these three words sound familiar to you?
How about
this one: “Mommy, I’m willing to take up any course in college as long
as there’s no mathematics in it!”
I was good with math when I was in high school. I took summer
remedial classes every year, so that means I had twice as much math
every year compared to regular students in class.
The language of business is accounting and finance. This is a fact, much to the chagrin of the sales and marketing people.
Numbers intimidate many, but the key to understanding numbers is to
keep the horrors of your grade school, high school or even college days
from terrorizing you any further.
When I was young, a very distinguished math educator comforted me
about my weakness in numbers: “Francis, as an instructor in math, let me
tell you this: there is no such thing as a bad math student; only bad
math teachers.” I’ve come to know that this is true. I’ve come across
excellent math instructors who made math learning fun. In turn, their
students are able to excel in the subject matter.
Let’s go back to business. The key to understanding numbers is to
think of financial statements like they’re blood test results or health
reports from your doctor. You don’t focus on all the details of how the
numbers were derived, but you focus on understanding the vital pieces of
information that would indicate the health condition of your company.
Every single person who aspires to become a leader in any business
organization should have business acumen. This is my recurring theme as I
do training this year. Business acumen allows aspiring leaders to see
the big picture. And the big picture deals with numbers.
There are three most important financial documents a business leader
must know how to understand: the income statement, the balance sheet and
the statement of cash flows. Look through it, study it, and don’t be
afraid to ask questions. Many executives don’t like doing the third one
for fear of being perceived as illiterate and ignorant about numbers.
This is a very risky pretense.
Business celebrity Sir Richard Branson admits that he’s dyslexic, and
when he looks at a financial statement, it appears like a crossword
puzzle to him. But he gets his accountant or his financial consultant to
interpret the numbers and tell him the state and status of the
business. Don’t be afraid to ask, be afraid not to know.
I ask finance people. I ask accounting people. I want to know the
numbers, because I base my decisions on this knowledge. This enables me
to make informed decisions and to take calculated business risks.
Don’t let numbers intimidate you. Numbers don’t like; we shouldn’t
too. Develop your business acumen. This is just one of the many
important lessons I’ll be presenting in my big event on March 1. Because
we need to lead and live life to the next level!
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