Desperately needed financial education
Dec 15, 2008
While accounting is widely accepted as the “language of business,” the knowledge of it in a typical architect, engineer, planner, or environmental scientist does not even reach a rudimentary level. You have to know the language to operate successfully. My painter and drywaller, Miguel Contreras, sends all his workers (who will go) to English classes. He says if they don’t learn English they will be working for him or people like him for the rest of their lives. He knows how critical it is to speak the language. He says if Americans went to Mexico looking for work and didn’t speak Spanish, that they would either end up broke or dead. It’s kind of like that with finance and accounting knowledge when it comes to A/E and environmental professionals. Don’t learn this language and you’ll end up broke. The truth is I find plenty of business students who don’t understand what an income statement is, what a cash flow projection looks like or how it is used, or what a balance sheet is and what the significance of some of the numbers are on it. This is terrible! I will be the first to admit that this stuff is not nearly as fun as designing a really cool project and then seeing it built. Nevertheless, you need to understand it. Being able to read and understand a PM report, understanding the impact of billing and collection activities on cash flow and the importance of cash flow, and understanding the differences in cash and accrual results is like being able to read the gauges on your car’s dashboard. Can you imagine what driving would be like if you didn’t have a gas gauge, a coolant temp gauge (or even an “idiot” light), or speedometer? Not to mention all the other stuff modern cars have, such as tire pressure indicators, miles ‘til next oil change readouts, and global positioning navigation systems? You would have a hard time driving. Similarly, your people are having a hard time “driving” your company because they can’t read the “dashboard.” When you tune into the numbers of the machine, you get to understand it much better. You learn what helps the business make money and how it loses it. You learn how certain activities or actions affect the future. So, how can you do it? Lots of education, that’s how! Try: Seminars from your accounting and finance staff. Why not have a series of a half-dozen seminars from your in-house accounting and finance people? Make them an hour or so long— do them over lunch— and give handouts. Relate them to your firm’s specific numbers and reports. Seminars from outside providers. Companies such as ZweigWhite, professional societies, and colleges and universities all have educational seminars aimed at helping with this problem. Try all of these resources— your employees and your business will appreciate it. Executive MBA programs. These weekend programs for key people could be the way to really educate those with the most potential to be your next top managers. They will learn the language of business and much more. As the old adage goes, “If you think education is expensive, try ignorance!” Originally published 12/15/2008
About Zweig Group
Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.