“If you think education is expensive, try ignorance.” Derrek Bok
This is one of the first volumes in a new series of anthologies of articles previously published in Harvard Business Review, in this instance ten of them, in which their authors share their insights concerning a major business subject, in this instance explaining basics for managers.
As is also true of volumes in other such series, notably HBR Essentials, HBR Must Reads, and HBR Management Tips, HBR Guides offer great value in several ways. Here are two: Cutting-edge thinking from 25-30 sources in a single volume at a price (about $12.50 from Amazon in the paperbound version) for a fraction of what article reprints would cost.
The material was selected to help those who read this book improve in areas that becoming fluent in the language of finance and economics, comparing/contrasting one’s firm’s financials with those of the competition, sizing up vulnerability to industry downturns, shifting focus from revenues to profits, using financial data to justify budget requests, avoid running out if cash (and going out of business), preventing costs from “killing” the bottom live, investing shrewdly according to rigorous cost-benefit analysis, “selling” a brilliant idea with its ROI, and avoid excessive faith in the numbers, whatever they may be.
The material in this volume is organized within three sections. All of it is of outstanding quality and value and some of it is of special interest to me, as indicated:
Section 1, Finance Basics: Don’t Be Afraid
Of Special Interest: “The Fundamental Laws of Business” (Pages 33-39)
How to get a grip on any company, regardless of size or location
Section 2, Making Good Decisions – and Moving the Numbers
Of Special Interest: “Working Your Assets to Boost Your Growth” (Pages 63-71)
Focus your supply chain on customers’ needs — and increase your return on invested capital
Miles Cook, Pratap Mukharji, Lorenz Kiefer, and Marco Petruzzi
Section 3, The Limits of Financial Data
Of Special Interest: “The Five Traps of Performance Measurement” (Pages 139-151)
What they are — and how to steer clear of them
Readers will also appreciate the provision of a before-and-after “Finance Quiz” with correct answers provided (Pages 5-8 and then Pages 153-157). My guess (only a guess) is that the material of greatest value to non-finance managers is provided in Section 1.