Why Every Manager Should be Fluent in Finance
Picture: Programme Finance For Non-Financials | Solvay Executive Education
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Do you know the difference between accounting and finance? Or is your reaction more along the lines of, ‘wait, there’s a difference?’ Do words like revenue, profits, cashflow, and margin cause you to look for the nearest exit?
Unless your job title has the word ‘financial’ somewhere in it, chances are, we’re talking about you.
The idea that all-things financial are best left to the ‘numbers people’ is a misperception that has gone on for far too long. “In today’s workplace, high-performance management demands knowledge of key financial concepts,” says Mathias Schmit, Academic Director and Associate Professor of Finance at Solvay Brussels School.
Regardless of sector or role, being able to speak – and understand – the language of finance gives you a unique, competitive edge. “Managers need to have a general understanding of the entire company, which means they must be able to understand all the people sitting around the boardroom table – including the Chief Financial Officer,” explains Schmit. “What you want to avoid is the embarrassment of being asked something by the CFO and having no idea what they are talking about.”
The basis for good decision making
According to Mathias Schmit, anyone who makes decisions needs to understand finance. This includes entrepreneurs, who must manage figures – and cashflow – not to mention raise financing. “For entrepreneurs, the fastest route to bankruptcy is a failure to monitor cashflow, confusing profits with the money you make, and ignoring things like inventory,” says Schmit.
It also includes project managers, who must explain the financing of a project when pitching it to their organisation. And sometimes even CEOs can benefit from being reminded that, for example, maximising shareholder value is not the same as maximising profits or stock price.
“Board members are charged with approving a company’s financial figures, but few actually understand what it is they are approving,” notes Schmit. “Doctors and lawyers also make decisions that involve financing.”
The bottom line is you can’t make good management decisions if you don’t understand the information. “As a manager, you must be able to get through the technical jargon and extract the key concepts needed to make competent decisions,” adds Schmit. “This requires that you have a general understanding and awareness of fundamental financial concepts.”
In other words, you need to be able to speak the language of finance.
Finance for Non-Financials
This is where Solvay Brussels School’s Finance for Non-Financials course comes in. “Our goal is to give you the knowledge you need to respond to financial questions with confidence,” says Schmit.
Designed specifically for those who self-identify as being a ‘non-financial’, the course covers such key elements as financial statement analysis, investment decision criteria, project valuations, budgeting and reporting, and risk management governance.
“I learned to distinguish between finance and accounting and have since incorporated the time variable into my way of doing business,” says Corine Buffoni, course alumna and Business Development Manager at Enerdeal. “I am now better prepared than ever to make investment-related decisions.”
Through a combination of theory and practice, interactive discussions, case studies, hands-on learning, and group activities, students gain a solid understanding of the foundations of financial management.
“I recently explained what’s really behind Net Present Value to people who had only a vague idea of what it was about – something I could never have imagined doing before taking this course,” adds course alumnus and Senior Medical Advisor at JV NOVARKA Dr Dominique Eggermont MD. “I will always consider the Finance for Non-Financials course as an unforgettable experience and a milestone in my career.”
Ready to start speaking the language of finance?
Enrol today for the Finance For Non-Financials programme!