Finance Book

In my corporate experience to date I have encountered a number of realities that range from the fun place to work to companies that follow policies based on fear.  To the former group belong companies where people are more than happy to work, often very hard, for the pleasure of sharing their experience with many other talented individuals while being part of interesting projects.  The latter tend to be organizations with high turnover of people and where the only incentives for them to stick around are the financial rewards they are getting and eventually the experience that can be sold to other companies at a later stage.

Control and command management style

The typical management structure based on control and command was first established when, in conjunction with the industrial revolution companies started to grow larger and larger.  The already existing agricultural model never needed to grow big and complicated enough to require articulated management structures: now industrial manufacturing, procurement, sales, stock management and various other functions needed a way to be pulled together.  Armies had at the time the only organizational models available, with multi level management system so similar structures and bureaucracies were implemented.

Control and command vs. coaching

Let’s consider two very different models of managing and getting results out of people:

Think first about a sergeant yelling orders to a soldier who answers “sir, yes sir”: this represents a model that has been used for thousands of years in armies around the world and ensures standard performance among all people in a unit.  Soldiers are there to follow orders, without asking questions and without necessarily agreeing on the specific tasks they are carrying out. At the same time let look at a football or basketball coach during training and during a game.  The coach is there to manage his team.  There is no doubt about who is in charge: at the same time she is there to inspire and motivate athletes for them to achieve increasingly better performance.

With over 70% of workers in USA being employed in a so called knowledge work and a similar percentage in the UK I am here considering why and how control and command is still, today, the most used management style.  Often because who is managing doesn’t know an alternative way on inspiring and motivating her reports and ensuring they always perform to their best.  The simplest solution works out to tell others what they would do if they were you.

A coaching approach to management: quiet leadership

The concept of Quiet Leadership introduced by David Rock in his book with the same title, suggests that in an environment where most people are paid to think a coaching approach nurtures this concept and effectively inspire people to do exactly that.  When you are employing a broad range of top graduates, scientists, MBA and PhD you are aware of being surrounded by very clever people: these are people that can easily be inspired to think creatively toward their own solutions to their problems.  So the Quiet Leader is not a person ordering and commanding instructions to his reports but she enters short and powerful coaching conversation where she asks questions and manages to get the other person actively involved in the dialog in order to achieve her own conclusions.  This result is usually a guaranteed success because of the following reasons:

If you were encouraged to think through a problem and you achieved your own solution you will own it to the point that you will have a much higher motivation to perform and deliver the result.  To the contrary receiving a suggestion or an order about what to do is somehow easier but you will perform or execute a task as your boss suggested it. The coaching conversation is usually geared around the process rather than the content: that allows the manager to stay out of details and avoid the possible temptations of micromanaging her staff. The process of encouraging you to think through the various possibilities will also foster a more independent thinking mind that will naturally seek solutions rather that simply asking: “what shall I do next?”.

Benefits of coaching approach to management A statistic available from the International Coaching Federation, reports the following benefits for companies where a coaching model as been adopted:

Lower stress levels 57% Self-confidence 52% Setting better goals 62% Increased self-awareness 67% Self-discovery 53% More balanced life 60%

Conclusions

There are a number of jobs and activities that require a structured and sometimes strictly organized management system, e.g. in manufacturing or in building sites: the coaching approach, on the other hand can be (and is) successfully applied to situations where people are primarily paid to think, such as in designing or other creative jobs, finance, general management and it is great to address conflict resolution.

In the medium and long term an established coaching culture will help your company to function better as a whole, improving key people retention, raise morale, ensuring they are happy and motivated to work hard for the ultimate success of their employer.

By: Massimo Gaetani

The Richest Man in Babylon by George S. Clason was one of the first books I read on the subject of wealth. I was fascinated by the storyteller’s simple principles to acquire wealth and riches and I thought, “This is too easy”. Yet, all those years ago with the knowledge held within the pages of this simple book, I did not take heed. It would be many years before I understood what the story had foretold and I, like many others, would learn the hard way about building a relationship with money.

With our economy in a state of influx and our country’s future uncertain, it would be prudent to teach our younger generations the importance of establishing a strong relationship with money. So many books have been written on the subject of money management and yet 8 out of 10 households have credit card debt in excess of $10,000. Why haven’t we learned the simple rules of building wealth? Where did we miss the mark? Lack of discipline and respect for money has caused much of this country’s default status. A small portion of blame can be placed upon the educational system. That’s right…the curriculum is not inclusive of finance and money management. Our children are learning how to count, but not how to spend. Parents should be more proactive in teaching their children about the realities that lay ahead in the real world concerning money.

The lessons are simple; the action is difficult for those who have never systematically implemented a plan. However, with commitment and a goal bigger than your immediate wants, you will achieve your financial goals with ease. The following is a rudimentary outline of the seven prosperity principles as this author has interpreted them from the famous book:

Principle 1 – Pay You First

Principle 2 – Create a Spending Plan

Principle 3 – Make Your Money Multiply

Principle 4 – Avoid “Get Rich Quick” Schemes

Principle 5 – Own Your Own Home

Principle 6 – Insure Your Future

Principle 7 – Increase Your Ability to Earn

The old cliché “it’s not how much money you have, it’s what you do with it that counts” is true and there aren’t enough of us doing what we should with our money. The downside to this is we are in a race against time, never knowing when we will run out. Each of the seven principles outlined here gives you the foundation for establishing a financially secure future. You can choose not to be a statistic of the working poor, or worse, never reaching retirement age. Start right where you are; it’s never too late.

By: Kim Harris

Assets and Liabilities

I recently finished reading Rich Dad’s Guide to Investing, the follow-up to Rich Dad Poor Dad that provides an in depth look into the worlds of business and investing. The book provides substantial and valuable insight into not only the philosophies of the rich, but specific practices and tools to use as well. I highly recommend this book to those who wish to change their way of thinking and move toward a life of financial freedom and independence.

One of the greatest lessons I learned from Rich Dad’s Guide to Investing is that you do not have to acquire assets through purchasing them. You should, in fact, learn how to create your own assets. This got me thinking of my own assets and liabilities on my own personal financial statement. My assets column doesn’t really have anything in it, and while I stared at that blank column, I felt absolutely worthless.

So, I decided to start thinking about the potential assets I could create and how I could turn the ideas into realities, no matter how crazy or outlandish they seemed. I also found during this process that I do have assets now that I should list. I started filling my assets column and it now looks like this:

Education – knowledge of international relations, conflict resolution, and development
Passion
Work ethic
Perseverance
Creativity
PSNM (Poor Student No More)

The first five are not putting money into my pocket as of now, but I always want to remember what my REAL assets are. Those characteristics will be the driving force behind my financial success.

My suggestion is to look at your personal financial statement at least once per month and each time, have a short brainstorming session in which you write down ideas for creating assets. Most importantly, you do not need an already existing amount of money to transfer ideas into tangible assets. Use your intellect, experience, creativity and character to find a way to make it happen.

My liabilities column heavily outweighs my assets column in terms of monetary value, but I know that this is only temporary. Don’t sell yourself short and realize what your true assets are – then take it and run with it.

My goal by May 2010 – grow my assets column bigger than my liabilities.

By: Jess Shorland