“Follow the leader”
It is a simple game, and all players emulate the actions of the leader!
Corporate life is not quite so simple – and it raises the question…
“How effectively can you lead if you don’t know where you are going?. If you don’t have a reliable compass?
I suppose its fairly OK if the company is well established, stable, profitable, cash generative and the business and economic environment is calm. Competition is not too fierce and its “business as usual “ to a large degree.
So largely emulating the past.
In my experience, however, change is a constant in business – often without warning, sometimes drastic (e.g. Covid) and can have a significant impact.
Against that background, a prudent leader would ensure preparedness.
A smart business leader would go beyond preparedness and have a predictive financial compass at his disposal – something to evaluate change and demonstrate accurately the effects on key results.
And I am not talking about some mystical crystal ball or a tame soothsayer. Having spent some 60 years navigating the vagaries of corporate life, I know one absolute truth.
Nothing is more valuable- fits the bill – better than an effective, flexible, well researched financial model based on a comprehensive and realistic inclusion of all the business metrics.
As readers of my articles will probably know by now, I am a dedicated “follower of fashion”.
In my case, the “fashion” is financial modelling!
It has nothing to do with myopia – or some deep-seated fear of failure.
On the contrary, it epitomises practicality and the experience gained over many years.
It has been suggested that leaders are born, not created or developed.
While this may be true in some cases, my observations of successful leaders is that they successfully combine the essential characteristics of EQ (emotional Quotient or Emotional Intelligence) and IQ (Intelligence Quotient).
- In the context of corporate management, high EQ is crucial for building strong relationships, managing team dynamics, resolving conflicts, and fostering a positive work culture. It enables leaders to motivate employees, adapt to change, and communicate effectively, which are all vital in a collaborative environment.
- IQ ( Intelligence Quotient ) on the other hand, measures cognitive abilities such as logical reasoning, problem-solving, abstract thinking, and the capacity to learn.
Again, in the context of corporate management, a high IQ is essential for analyzing complex business data, devising strategic plans, and solving intricate problems that affect the company’s operations and long-term direction.
And, quite simply, when it comes to issues, such as those set out in the preceding paragraph, even a management team equipped with high IQ can benefit significantly from a purpose made, flexible, comprehensive financial model.
Having a diverse business career spanning 6 decades, and having built and used financial models extensively to manage and expand the companies that I controlled, I have had real-life practical knowledge of the extensive benefits and advantages of financial models.
I you wish to discuss my experiences and explore how a bespoke model of your business could benefit you, please call me, or drop me a mail.
Colin Human CA(SA)
Goalfix Financial Modellers
colin@goalfix.co.za
O82 888 1900
