Afraid of numbers

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!

(Attend Francis Kong’s once-a-year big event this March 1, 2013: “Inspiring Excellence” at the SMX Convention Center. Learn best practices on business, finance and good citizenship from Butch Jimenez, Chinkee Tan and Alex Lacson.  For tickets, call Inspire Leadership Consultancy Inc. at 632-6310912 or 09228980195. You can also send an email to [email protected].)