Thursday, November 15, 2012

Fifth Grade Math In Business

This Blogger CEO focused on History, Political Science and Foreign Languages, while spending several years at university, which in many ways prepared me to manage a global business.  While I studied Algebra and Geometry before university, it was fifth grade math that prepared me to actually deal with daily management of a company.   Of course, those that studied higher level math, who no doubt are much smarter than me, would probably beg to differ; but then it takes them much longer to make management decisions because rather than trust their instinct, they must use computers to do basic addition and subtraction. 

And then, there is the smell test related to numbers.  If it doesn't smell right, or seem logical, it is probably wrong.  I think I learned that in fifth grade math too.   Fifth grade math is all about common sense.   Profit and loss can be analyzed using fifth grade math; though many in business attempt to make it more complicated.   A company is either making money, or not.  What part of that concept is hard to understand. 

The concept of "Show Me The Money" is always applicable.   And, since hope is not a strategy and cards talk and numbers don't lie, the numbers are either there or not.   Pie in the sky is a tasty road to no where.   So, what could have happened, or should have happened related to numbers doesn't add up either.   My old Italian grandfather, who only had a fourth grade education in Italy, was one of the smartest guys I ever saw when it came to numbers. 

My grandfather was in the grocery business for more than 40 years.   I always marveled at his ability to deal with numbers that were all in his head.   In his case, he used fourth grade math to manage a successful business, while amassing wealth the old fashioned way through hard work.    My grandfather understood that Cash Is King.

So, when the brainiacs at many companies start talking about sophisticated analysis to make decisions, let them have their fun; though it does slow down decision making.   At the end of the day, if the CEO of a company can't do a deal on the back of a napkin, using fifth grade math,  he or she probably doesn't understand the business. 

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