Management Tip of the Day: Look beyond the financials

Mon Jun 13, 2011 12:53pm EDT
 
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BOSTON (Reuters Life!) - Your balance sheets can tell you a lot, but there are many intangibles that can not be captured by numbers, says Harvard Business Review.

The Management Tip of the Day offers quick, practical management tips and ideas from Harvard Business Review and HBR.org (http:\\www.hbr.org). Any opinions expressed are not endorsed by Reuters.

"There is only so much you can know about your company by scrutinizing its financials. As a leader, you need to keep an eye on the financial reports, but don't lose sight of those things that can't be captured in numbers:

1. Threats to your future. BP's income statement had no trace of the company's grave safety violations. Numbers won't tell you if there are looming threats to your company. To uncover them - and mitigate them - you need to talk with employees through focus groups, surveys, and interviews.

2. What customers are thinking. Financials measure what customers did the last year, but future customer behavior impacts the bottom line. Find ways to understand how satisfied customers are with your products, what their gripes are, and whether they intend to repurchase."

-Today's management tip was adapted from "Guide to Finance Basics for Managers."

(For the full guide: here)