A series about the ways I work towards being cognizant through decisions that make me more mentally engaged with various facets of my day-to-day life.
Cognizance (noun): Awareness, realization, notice, knowledge, perception.
At the end of May, I wrapped up the first three courses of my Graduate Diploma in Business program: Accounting, Communications, and Negotiations. I wanted to share one major takeaway from each course that I think everyone could benefit from knowing!
1. Accounting: Revenue is an indicator of health, but ratios tell a more nuanced story.
When you hear about companies in the mainstream news, it is often something related to their revenue – it’s way up! It’s way down! Or they’ve got bankrupt.
I’ve learned that while revenue is a “vital sign” of a company’s health, digging deeper into the financial statements and looking at financial ratios tell you a little more about how a company is really doing. These ratios tell a story about how effectively a company is using its assets and cash, or how easily they could cover their butt if they suddenly needed to pay off all of their debt, to name a couple.
For example: Netflix has experienced explosive growth and has phenomenal revenues to brag about. However, it has a growing reliance on debt that has been acquired to invest in original content creation. So, while very exciting, the revenue excitement overshadows heavy debt being taken on that the company is betting will pay off in the long run. They’re counting on all of you to keep subscribing and to get your friends to subscribe – and then, when they run out of people to subscribe? They’ll probably need new business ideas.
2. Communications: “So what?“
If you’re trying to communicate an idea or convince someone of a point of view, ask yourself, “So what?” every time you put forward a piece of information. Is that information serving any purpose, or is it merely distracting from the main point you are trying to get across? If you can answer the question, “So what?” everytime, you’re setting yourself up for a more memorable and influential message!
3. Negotiations: Don’t start with the money.
When people are coming together to decide on something – whether it is how much money will be exchanged in the purchase of a business or who is going to handle what chores for the week – inevitably, those specifics must be discussed. However, the relationship among the parties involved should not be reduced to those numbers. The numbers are important, but the negotiation should be a back and forth that builds from a place of open communication and information exchange.
Don’t start with the money!
Or chores. Or timeline. Or whatever it may be. Starting there without showing care for the relationship will only lead down a negative road.
I believe we all have something to learn from these courses that we can carry into any areas of our lives: Don’t take all information at face value, ask yourself why you are making decisions, and prioritize relationships.
Hopefully, you see the value in these lessons I’ve learned as well.