questions we hear leaders ask...

Below are answers to the most frequently asked questions we hear when working with business leaders each week. Questions are grouped into two areas:


Business Acumen

What is Financial Reporting?

Financial reporting is the process of disclosing an organization's financial health to investors, managers, and governmental agencies through a variety of formats and forums including financial statements, press releases, annual reports, prospectuses, and corporate websites.

Financial reporting is a legal requirement for all publicly traded companies in the United States, and enforced by the Securities and Exchange Commission (SEC).

The most common financial reports are the Income Statement, Balance Sheet, and Cash Flow Statement. These reports must adhere to reporting standards defined by the Financial Accounting Standards Board (FASB) that use rules known as Generally Accepted Accounting Principles (GAAP). GAAP rules ensure financial reporting consistency and objectivity for stakeholder decision-making and benchmarking purposes.

Learn why understanding these reports is important to all leaders - not just the CFO:
http://blog.insight-experience.com/blog/business-acumen-important-aspiring-leaders/

 


What is an Income Statement?

The Income Statement, also known as the Profit and Loss Statement, is one of three important financial analysis tools that are used to better understand and manage the financial health of a business.

The Income Statement shows revenues, expenses, and profits for a period of time such as a month, quarter, or year.

Simply put, it is a way to measure whether a company’s products and services are profitable by subtracting all its business costs and expenses from its total revenue during a specific period, which results in net profit.

Learn more about the meaning of some important terms on the Income Statement: 

http://blog.insight-experience.com/blog/6-business-acumen-concepts-managers-profitability-cash-flow/

 


What is a Balance Sheet?
The Balance Sheet is one of three important financial analysis tools that are used to better understand and manage the financial health of a business.
 
Simply put, the Balance Sheet is a snapshot in time of what a company owns – its assets – and how those assets are paid for – by liabilities and equity. Assets are the things a company needs to operate, generate revenue, and, hopefully make a profit.
 
Assets can include cash, receivables, raw materials, facilities and intangible assets.
 
Liabilities typically reflect contractual agreements for money borrowed from bankers or vendors.
 
Equity is another source of cash, provided by investors, to purchase assets.
 
The Balance Sheet must always “balance” where the dollar value of its assets is equal to the dollar value of its liabilities plus the dollar value of shareholders’ equity.
 
Learn why understanding this report is important to all leaders - not just the CFO:
http://blog.insight-experience.com/blog/business-acumen-important-aspiring-leaders/
 
 

What is a Cash Flow Statement?
The Cash Flow Statement is one of three important financial analysis tools that are used to better understand and manage the financial health of a business.
 
The Cash Flow Statement reflects the inflows and outflows of cash from a company’s core operations, investments, and financing activities for a period of time such as a month, quarter, or year.
 
Inflows of cash – money entering the business – generally include cash collections from customers for products and services provided to them, bank loans, shareholder investments and asset sales.
 
Outflows of cash – money leaving the business – are used to pay suppliers, produce or purchase inventory, pay employee salaries, and pay for bank interest and taxes.
 
Learn why understanding this report is important to all leaders - not just the CFO:
http://blog.insight-experience.com/blog/business-acumen-important-aspiring-leaders/
 
 
 



Leadership

What are the four leadership skills new leaders need to be successful?

New leaders often step into their new roles having received little training, navigating unfamiliar territories under additional pressure, while attempting to lead their former peers. At Insight Experience we believe that in order to be successful, new leaders must possess the skills to:

Lead strategically by understanding the organization’s strategy and making connections to how their team fits into that larger strategy picture.
 
Decide and Deliver results by prioritizing projects and monitoring teams to see that tasks are being performed in a timely and efficient manner.
 
Collaborate and communicate between business units and across organizational boundaries, utilizing intrapersonal skills to build relationships and propel projects forward.
 
Develop people and skills through coaching, directing, and managing others to build an efficient and capable team.

 

Learn more about essential skill development for new leaders:
https://www.insight-experience.com/solutions/developing-new-leaders/

https://www.insight-experience.com/best-practices-first-level-leaders/


What does 'lead strategically' mean?
People who lead strategically understand the organization’s strategy and help their colleagues understand how the team's work fits into that larger strategy picture.


What is strategic communication?

What you achieve as a leader comes down to how well you inspire, direct and empower your team. Strategic Communication can come in any form, and must clearly convey your plan of action across 4 dimensions: 

 Strategic Alignment: Is the content of your message clearly connected to the strategy? Do you explain to your team where the company is headed, how what you are asking them to do connects to the organization as a whole, and how it supports the strategy?  

Consistency: Is your message consistent with your business goals and objectives? Is it consistent over time? Is it in line with what other stakeholders are being told? 

Tone: Is your team motivated by what you are saying? What is the tone of the message? Are you recognizing their efforts? Is your message engaging? 

Accountability: What do you expect of your team? Is it clear what your team’s goals are and what you want them to do? Your message should include an explanation about how they will be held accountable for the results. 


What is business strategy?

Strategy is a long term plan for how to attain objectives. In business, a growth strategy may be to strengthen core products or acquire relevant assets.  

FOR EXAMPLE: Company A has a 2020 goal of 11% revenue and 13% EBIDTA. This is their business Objective. They have decided to reach that goal by focusing on growth in new markets, which they will achieve through investing in innovation and acquiring smaller businesses in their field. That is their strategy.  



 

What business question do you have?