Visualizing Company Management Figures! ~How to Communicate with Numbers~
Have you ever looked at your company's financial statements?
Surprisingly, many company presidents say, "There are just rows and rows of numbers, and I don't really understand them."
Actually, before I became a Small and Medium Enterprise Management Consultant, I didn't understand them at all either.
I read many books like "How to Read Financial Statements in One Minute!", but they were completely useless.
Today, I am talking about how to visualize company management figures (such as financial statements and monthly trial balance sheets) for presidents and general employees who are not good with numbers. It is well-received for being understandable even to high school students.
Understanding the 20% that is the essence is enough!
The reason why documents with many numbers, such as financial statements, are difficult to understand is that there is too much information!
A president does not need everything to make management decisions.
The information necessary for decision-making is roughly 20% of the whole.
By organizing information and reading it with a clear focus, both understanding and management decision-making become faster.
Visualize to grasp the big picture
Numbers alone do not create an image in your head.
In such cases, visualization becomes a powerful weapon.
Humans can finally understand something by forming an image in their minds.
Sending images directly into the brain is the clarity of visualization.
What I am introducing here is a tool called the "Money Block Puzzle" that I learned at the Japan Cash Flow Coach Association, to which I belong. It is a method for visualizing management figures like financial statements in an easy-to-understand way, and I use it myself.
The overall picture looks like the diagram above. But just looking at this, you don't understand it, right?
I have written an article on another site, so please refer to this for more details.
Spreading from Ota Ward! Japan's Town Factory Support Media "So x Zo" is the contribution article.
Communicating with numbers (A tool for discussion rather than analysis)
The "Money Block Puzzle" feels more like a tool for discussion than for analyzing numbers.
Instead of staring at numbers, we use the "Money Block Puzzle" to make it easier for presidents and employees, or presidents and consultants, to talk.
What is important is to grasp the current situation and then simulate the future.
What if sales go up by XX%? Or down?
What if the selling price goes up by XX%? Or down?
What if the purchase price goes up by XX%? Or down?
By simulating such things and sharing the results through visualization, the images of everyone talking start to align. It's not just about thinking alone; because everyone discusses it together, various ideas emerge.
Once you understand, you get motivated!
In the sequel I wrote recently, I introduce it under the theme of "How to get employees to have a management perspective?." (Click here below)
A common concern for company presidents is that their employees do not think about profits at all! They often wonder, 'How can I get them to think and act more proactively?'
The gap in awareness between the president and employees stems from a difference in the amount of information they have.
If they don't know, they don't understand. If they can't understand, they can't be serious. That is often the cause.
It is not simply that they lack motivation.
On the contrary, once they understand, they will become motivated!
By having the president and employees discuss things while looking at the same 'Money Block Puzzle,' they can deepen their mutual understanding and relate to one another. I support such communication using numbers and diagrams.
I am not a financial analysis expert. If anything, I am not very good at communication either. That is precisely why I am so particular about taking difficult problems and expressing and conveying them in an easy-to-understand way.
I feel uncomfortable when I don't understand something, so I want to make it understandable.
Being able to visualize things intuitively with diagrams is a powerful weapon.
For more details, please see the article on my other site!
I would be happy if you could feel even a little bit of potential in the 'Money Block Puzzle' for visualizing management figures.
This article was written by
Mousou Biz Planning Representative Shigeki Kawahara
https://mousoubiz.com/
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