Everyone admires a genius. Brilliance, especially in business, can carry a mediocre vessel across near-miraculous distances.
But if a select few at the top of the business are the only ones with sturdy financial knowledge, the whole structure will topple.
Dan McGurrin is the Director of Executive Education at Poole College of Management at North Carolina State University. He’s spent more than 20 years giving leadership teams the skills they need to keep their business upright. And much of that has involved financial training.
Dan is an Income|Outcome client, and we recently asked him to share three compelling reasons why every leader in a company, no matter the field, should be financially savvy.
Here’s what we took away from the conversation.
1) Everyone Needs Resources
In today’s organizations, resources are scarce. If you want investment in a multi-million product idea, or even a new printer, you have to build a business case.
If you know how money flows through the organization, you can show why your investment would have the greatest return. You’d have a compelling business case — complete with nuts, bolts, and the instruction manual.
In most cases, an organization has several options as to where they should invest their resources. But financially savvy leaders set themselves apart, typically acquiring the resources they need, because of their ability to build a business case that’s thorough and well-informed.
2) Expanding Beyond Your Role
You’re in a good place if all of your leaders stop to ask themselves:
What’s driving my company; what’s it trying to achieve?
But to expand beyond their roles, leaders have to understand the financial drivers of their own organizations and their competitors’. (Click to Tweet)
Recently, Dan spoke with a man who traced his last two promotions back to his financial knowledge. He could predict where the competitor was going to invest based solely on their financial statements.
That financial savvy is invaluable to an organization.
3) Not Getting Caught
Inadequate financial knowledge will always catch up to you in business. If you’re a leader, you don’t want to be caught in the following situations:
1) Making a bad decision because you don’t understand how money is affected.
2) Not being able to understand the business language of the organization.
In the first, no one is going to bail you out if you don’t understand how finances are being managed. Savvy leaders, however, can sniff out trouble in investment opportunities and prepare the organization if its going in a negative direction.
This is the same as if you were an entrepreneur facing a lot of problems you are not able to solve.
In the second, finance is the language of business — and you must be able to speak it. Every leader should have the ability to have the same, literate conversation around financial drivers.
Good business acumen means less wasted time for translation.
Dan McGurrin has helped establish financial literacy all over the world for a variety of organizations, including Patheon – a leading provider of drug substance and drug product services for the global biopharmaceutical industry.
When Patheon acquires a company, Dan steps in shortly after with the Income|Outcome business simulation to train up a new group of financially sound leaders.
Dan’s advice comes from experience — years of watching organizations flourish through collective knowledge. You can trust it.
After all, the only thing better than a business genius is an organization full of them.
To learn how Income|Outcome can develop real-world business acumen throughout your entire organization, click here.