We Are All Human

Financial Intelligence CoverKnow your assumptions. That’s the first theme in a book I’ve begun reading: Financial Intelligence. Before diving into how to read and interpret financial statements, Karen and Joe (the authors) want to make it clear that all financial analyses are based on assumptions. Be it the depreciation schedule for a vehicle or what counts as cost of goods sold (COGS), there are judgement calls and assumptions that must be made to create a financial analysis. If you understand these assumptions, either by talking to your finance team or reading the footnotes for a financial statement, you can get the full context for the analysis and have conversations about whether those assumptions are accurate. Don’t just accept numbers. Instead, understand how they were chosen and question.

I believe this lesson can be extended farther to teams beyond finance. For new Product Managers, it’s likely the first time he or she will interact with teams like finance, legal, and security. These teams are often shrouded in mist as the common conception is that they speak their own language while making decisions that affect everyone. However, it’s important for a new Product Manager to understand that these teams are human. They must make assumptions and guesses to get their jobs done, and those assumptions are often wrong as assumptions often are. A new Product Manager should strive to form relationships with these groups to understand these assumptions as well as learn how to best inform them of their products impacts to their decisions. This relationship can be formed through informal 1:1s or lunches, or simply getting on the phone to talk to these teams rather than sending email. And even better is to read an intro book to those teams, like Financial Intelligence, to understand their lingo and the framework for their decisions.

So far Financial Intelligence is quite good, and I expect to have several posts about the parts of the book as I read through it.

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