I want financial statements to be in real time, I want them to be accurate, but don't you think we, as leaders or people in business, we have enough intuition to act in the meantime, instead of using a lack of information as a crutch? This podcast, boosting your Financial IQ, is about business, financial literacy, strategies for profitability and the principles taught at byfiqcom. My hope is that you'll apply the lessons learned and that we can work together soon in my mastery program. Enjoy the show and don't forget to subscribe. One of my main goals with this podcast is to document my journey as I'm turning around and growing these companies and to share these experiences with you so you could take this information and you could avoid a lot of the pitfalls that I run into, that my clients run into and that will allow you to be successful out there in the real world.

When it comes to boosting your financial IQ, I'm always talking about KPIs, key performance indicators, metrics to pay attention to, reading the financials, understanding the story behind the numbers, spreadsheets, financial models all these tools in order to drive better performance in a company. Here's what I want to talk about today, because this week I've had multiple conversations with CEOs that I work with on this very topic. So it's like a theme, and since it's a theme, I should probably share it with the rest of the world. Here's the deal when it comes to running a company. So when I go in to turn around or grow a business, one of the first things I do is I put in place a strategy. Okay, that strategy helps the company to get very clear on where it's going to compete, how it's going to compete and, ultimately, how it's going to win. That also involves being crystal clear on what the strategic problem is. Once that problem is identified, we then put in place initiatives, actions and results to go and execute. And guess what? We then use key performance indicators to measure whether or not that strategy is working.

When it comes to KPIs, oftentimes I feel like leaders can hide behind the numbers, hide behind the metrics. In other words, they can justify not taking action because maybe they don't have the data sliced and diced in a certain way, or they don't have access to a certain report, or maybe they're working through some accounting issues and they need to understand the numbers exactly before they can actually go out there and execute. But guess what? Execution drives everything. I was talking to a CEO this morning and I said look, here's the deal, if we talk in six months and you came back to me and said Steve, our numbers are a mess, we need your help cleaning up our books because accounting just went completely rogue. We weren't tracking things, we weren't classifying things and look, we haven't even produced a financial report in the last six months Not that I want them to do that, but let's just say they did. But then at the same time, they were able to grow their revenue by 5X and that's why they didn't have time to mine the accounting. Now, obviously, you want to pay attention to your accounting, you want to track the numbers, you want to have real-time data. My point to them was if you went out there and you increased your revenue because that's their strategic problem right now is that they need more revenue, they need to increase sales. That's the one constraint that's affecting everything and causing cashflow issues in their business. So if they're behind their desk looking at spreadsheets, building out models, waiting for numbers to come in, waiting to get an exact accounting before they could go out there and act, I think it's just an excuse.

I'm kind of coming in high here on this podcast because obviously this has been a topic I've been so passionate about this week, so that's what I want you to hear today. When it comes to numbers, of course I love numbers. Of course I want financial statements to be in real time. I want them to be accurate. But don't you think we, as leaders or people in business, we have enough intuition to act in the meantime, instead of using a lack of information as a crutch? Okay, let me just say it another way.

I was working with another company a while back and they were trying to figure out their strategy, but every time we met, it felt like there's one piece of information they're waiting on and therefore they weren't making a decision. But here's the bigger issue the investors in the owners of the company. They were just fearful of making the decision they needed to make. They already knew what the decision was. It was just hard because, by making this decision, it meant that they had to divest a certain part of their business, and that's hard, it's embarrassing. You got to go back to other investors and tell them that you failed. Nobody wants to do that. So they were just delaying the decision and by delaying the decision, they kept burning through more and more cashflow, right? So that's what I'm talking about.

Oftentimes, we have all the tools and all the resources we need to go and execute, but we use the numbers as an excuse, as if we are paralyzed or we can't go out there and execute because we don't know exactly whether or not our customer acquisition cost is $80 or $95. It's like who cares? Obviously, you need to get that number right, you need to know your numbers, but it shouldn't stop you from executing and improving your performance. Now I don't want to contradict myself, because I believe numbers are really important when it comes to understanding your strategy, so don't hear me wrong on that. Instead, what I'm saying is that we cannot use them as a crutch.

So here's the deal. Let's say you have a revenue problem and you know that for every 10,000 emails you send out or for every thousand phone calls that you make, you're going to get X number of people who are interested in your product or service. They become qualified leads. And then you know that your conversion rate is X percent. Well, it's just formulaic. It's going out there and it's doing, it's doing the reps, so you can get those leads in the business. You don't need to sit back and wait until numbers come in before you can make decisions. So don't be waiting on numbers is what I'm saying. It's already the beginning of February as of the date of this recording, which is crazy to me because the year is just going by so fast and it's just going to go by even faster. So we just have to go out there. We have to make moves in our businesses in order to drive better results.

Okay, so, when I talk about understanding the story behind the numbers, when I talk about doing analysis, when I talk about doing research, knowing your KPIs and all these other things, that's great and, yes, you should absolutely 100% do that. But just don't use numbers as a crutch. Don't use the excuse. I'm waiting on the most recent financial statement in order to go out there and act in the real world, because action is what drives results. Now, obviously, you don't wanna go out there and do a bunch of action that's not gonna create value or that's gonna destroy value, but that's less of a worry, because you're smart, you got this and if you just go out there and kick some butt, you're going to have a very successful year. All right, that's what I'll end on. Have a great week until next episode. Take care of yourself. Cheers.