By Gene Siciliano for Financial Management
Nonfinancial execs don’t always understand the language of finance and often don’t trust what they don’t understand. Think back, if you can recall, to your first accounting course in college. If you were like most of us, it was a new and somewhat foreign language. How did they know that the balance sheet really had all the company’s assets on it? Or that the liabilities were real and supportable? How could you completely trust the numbers on the sample reports you saw when you hadn’t personally developed them? If you were a marketing major or an engineering student, I’m guessing you would have had even less trust because you would have had less understanding of the process. Well, most business executives today didn’t get an accounting or finance degree, and that’s especially true for most CEOs and board members (although the trend is moving a bit in our favour in recent years).
Over the years, when I gave talks on financial topics to management groups, some of the reactions of audience members showed they clearly didn’t grasp much of what they were hearing, perhaps because something in their minds said, “This is a foreign language. Don’t listen and it will go away.”
So it’s not surprising that attempts to communicate with our nonfinancial peers and bosses has proved challenging. And yet we want to be heard because:
- Our message is important;
- We want to make a meaningful contribution to the success of our company; and
- We want to achieve career success beyond where we are now, perhaps including being the CEO mentoring a young CFO at some point down the road.
What do we need to learn about communication of financial information that will help us in all those areas?