One of the best courses I took in graduate school was an economics requirement that everyone else had dreaded – and then proceeded to hate.
I loved it. The topic was fascinating.
So what enthralled my liberal-arts-educated brain? A primer on social security, pensions, occupational safety and health, unemployment insurance, and disability benefits.
(Go ahead, I give you permission to roll your eyes. But stay with me here.)
It was practical. It was applicable. It taught me how to assess costs and benefits of different programs. It demystified ERISA and gave me valuable knowledge about defined contribution and defined benefit plans. Perhaps most important, it reminded me that you don’t have to be an economist to understand the economy. Or business. Or numbers.
You have to know your numbers.
Two recent events reminded me about this.
The first occurred in the penultimate episode of The Partner. Marcus Lemonis asked each of the four final candidates to look over a profit and loss (P&L) statement for a restaurant and tell him what stood out. Two looked and immediately identified the glaring issues. One froze (exhaustion and stress). The fourth stared at the numbers as though they were written in Chinese.
The second event occurred closer to home. I was commiserating with my neighbor about our ethically challenged condo board and explaining to her that one way to understand what’s happening is to read the condo budget and look at how funds have been allocated and dollars spent. I told her to look at the budget. Her response: “But, Daria, you’re smart.”
Okay, I’ll take a compliment.
But here’s the problem.
It doesn’t take a genius to read a budget.
I’m no financial genius.
I can read the basics of an annual report, but I give it to a friend to decipher when I want to know what’s missing. I don’t speak financial acronyms, but if someone starts throwing them at me I’m confident enough to ask them to translate so I can follow the conversation. And I can read a P&L statement and I know how to scan a budget to understand what’s going on.
Like most things in business (and in life), you don’t have to know it all. But don’t you want to know enough to understand what questions to ask so you don’t get taken for a ride?