As business gets more competitive, more global, more technologically
driven, it gets easier for others to compete with you. It
gets harder to be successful by just doing OK. It gets harder to
launch a good product and enjoy the benefits of your innovation
for a long time without serious competition. And, yes, it does get
tougher to make a living. So what was good enough for our parents
to be able to get by and make a “good living” isn’t good
enough today. You may have read that many of us will fail to
achieve the relative standard of living that our parents did
because of that tougher world out there. Of course, if you’vebeen alive for the past 10 or 15 years, you also know that there
are unprecedented opportunities to create new wealth, new
products, new companies, and new fortunes that never before
existed. It’s unlikely that our forefathers could have imagined fortunes
being made, and lost, as quickly as they were in the ’90s.
So it’s hard to argue that times are more challenging now.
The question is: what can you do about it? The answer: not
much about the times, but a lot about how you prepare for
them. And that’s what this book is all about.
When I was a young boy, my father owned and ran a small
grocery store that supplied the neighbors with their daily household
needs, long before supermarkets killed the mom-and-pops
that then existed in every neighborhood. When school was over,
I went to the store to help out, because mom and dad were both
working there. My first job was opening cases of packaged
goods, pricing the packages, and stocking the shelves. Then I
packed groceries and delivered them to customers, sometimes
after taking their order over the phone and personally filling it.
(Yes, that was how many small stores did business back then.)
Then I graduated to cutting meat in the fresh meat department.
By the time I was in junior high school, I was checking out customers,
opening the store in the morning, and finally running
the store when my parents went on a rare vacation. By the time
I was in high school, I had run every aspect of a small business,
including opening and closing the cash register and doing the
bookkeeping at the end of the day.
In today’s business terms, I had worked in shipping/receiving,
warehousing and inventory control, production, sales, delivery,
billing and collection, accounting, and management.
Uncommon today? Yes, and yet that diverse background is
exactly what is being demanded more and more of today’s upand-
coming professionals. Managers in companies large and
small, including directors, vice presidents, and general managers,
are finding their particular specialties aren’t going to
carry them to the finish line as they might once have.
Their first clue might have been the arrival of the personal
computer. Senior managers and company executives a generation
ago were challenged by their lack of knowledge of this new
tool, no matter how firmly they knew their own particular areas
of expertise. The young professionals coming into the business
often made their bosses look old-fashioned with their mastery of
this impressive and intimidating technology. Soon, as we discovered,
those young professionals had children, whose computer
acumen after being on the planet for only a few years made
even their savvy parents sit up and take notice. And so it goes.
Now, as we are learning, finance and accounting are having
an impact on many companies in ways never before thought of
by managers outside the financial department. The accounting
scandals of 2002 showed that financial incompetence, or carelessness,
or simply lack of integrity, could wipe out the efforts of
thousands of loyal, hard-working employees. The report card, it
seems, has become more important than it ever was when we
were in school.
Today we’re finding out that we need to know how to read a
report card so we can just keep our jobs, let alone advance in our
careers. Boards of directors now need to delve into the reports
they have routinely received for years to a degree never before
contemplated. They need to understand financial terminology and
accounting methods they might previously have taken for granted.
CEOs now need to be completely aware of what their people
are doing and the financial ramifications, because they will no
longer be able to credibly say they didn’t know. And finally, managers
within a company, whether large or small, are going to
need to understand the rules of accounting and the boundaries of
proper finance well enough to avoid getting into trouble just
because they were aggressively trying to make their goals. As for
those who aspire to become managers, they might not even get
started up the ladder until they can demonstrate this kind of
knowledge. So you see, it touches everyone.
Now, it’s all well and good to say that accounting scandals
will make everyone learn more about finance and accounting,
but is that the only reason to know this stuff? Of course not!
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