03 Jan Why Increase Your Financial Intelligence?
Financial intelligence is a skill that many people assume you were either born with or you weren’t. It
seems that some people naturally have a knack for numbers and analysis, while others don’t. While some of
this may be true, financial intelligence is both a skill and an asset that is valuable for anyone who works within
a business to have, and an asset that anyone can attain.
So why increase your financial intelligence? Growing your financial knowledge brings with it a host of
practical benefits. One benefit is that people in organizations outside of the accounting department- leaders,
managers, employees- who can understand what is happening in their company from a financial perspective
are better equipped to use that information to work and manage more effectively. Another reason for individuals to boost their financial intelligence is that by doing so, it allows them to stand out from the crowd. Greater financial intelligence greatly improves an individual’s ability to make wise and meaningful decisions in their job, thereby allowing them to have a greater positive impact on their organization.
Understanding the bias that naturally (and most often ethically) occurs in financial numbers is yet
another skill financially intelligent people have at their disposal. Understanding financial bias will give you the
knowledge and the confidence- the financial intelligence- to productively question the data provided by your
finance and accounting department. You will be able to identify the hard data, the assumptions, and the
estimates. You will know- and others will, too- when your decisions and actions are on solid ground.
You will also be able to look at your company and evaluate it critically. By knowing what’s going on
within the financial statements that most companies publish (if they’re a publicly traded company, they are
required to have certain financials available). While you may not be able to spot precarious situations like
those that occurred at companies like WorldCom, Tyco, or Enron- after all, they fooled plenty of seemingly
savvy Wall Street types- a little more knowledge will give you the tools to watch trends at your company and
understand more of the stories behind the numbers.
While you might not always have all of the answers, greater financial intelligence helps you to know
what questions to ask when you don’t know. It’s always worth your while to assess your company’s
performance and prospects. By doing so, you’ll learn to gauge how it’s doing and figure out how you can best
support those goals and be successful yourself within your position. Companies love employees who are able
to see the bigger picture and have the savvy to make a greater positive impact on the company, and having
greater financial intelligence can help you do just that and stand out from the crowd.
Source: Financial Intelligence by Karen Berman, Joe Knight and John Case. Joe Knight, and his
partners, Joe Cornwell and Joe Van Den Berge from Setpoint Inc. together have built two
companies with 25-year history of successfully implementing these principles in their thriving
businesses. Setpoint Inc. designs and implements custom rides and attractions for the top
amusement and theme parks in the world, and Setpoint Systems delivers custom automation
and robotics that helps manufacturers large and small improve the way they make and