Jacob Ahmadzai – Page 101 – STL

What is active listening?

Active listening is the ability to pay attention to the other person without becoming distracted such as thinking about what you will say or how to respond. Nor should you allow yourself to get bored and lose focus on what the other person is saying.

Dr Stephen Covey author of The seven habits of highly effective people said “First seek to understand then to be understood“ In other words when listening to others you should focus 100% on them and not on what you want to say.

How can you develop your active listening skills?

1. Stay focused on the other person without interrupting

A simple but important part of active listening is to stay focused on what the other person is saying without interrupting them. Too many people, myself included, are in so much of a rush to say something that we often interrupt others and don’t stay as focused as we should.

2. Show you are paying attention

When listening to other people you should show that you are paying attention by using good eye contact and acknowledge from time-to-time by smiling and encouraging the speaker to continue with small comments such as “yes” or “I see”, or prompts such as “tell me more”? Or “can you explain further?”

3. Summarise key points

While it is important not to interrupt, if you stay too quiet when listening, the other person might feel that you are not paying attention or do not fully understand their points. Therefore, when the speaker has finished you should summarise some of the key points made by the other person to acknowledge your understanding.

4. Dig deeper

An important aspect of active listening it to understand more deeply what is behind peoples’ words. In certain cultures, such as in Germany or Holland, what people say is what they mean. However, especially in Asia and even in the UK, what people say and what they mean are often two different things. When a British executive tells you that your idea is “interesting”, it can sometimes mean that they don’t like it!

5. Ask better questions

If you want to be a better quality listener you need to ask better questions. This could be follow-ups to dig a bit deeper and either understand the other person’s feelings, or to check you understand the other person correctly. It’s key to get a good balance between both open and closed questions. A common mistake people make when communicating is to use too many closed questions and risk making assumptions. Therefore, be sure to ask open questions and encourage the other person to explain in order to understand them more deeply.

The 4 basic Financial Statements for Success

Finance for Non-Financial Managers

Unpredictability of the markets and the impact of changing consumer demands can lead to serious implications for business stability. Awareness in profitability is paramount. It is imperative that a manager has the ability to understand financial processes.

This article will explore the FOUR basic financial statements that Managers need to be comfortable with:

1. Balance Sheet

The balance sheet provides a snapshot for a particular date. It does this by showing what your business owns versus what it owes.

It displays your business’s status in the form of its assets (what you own), liabilities (payments you still owe) and the equity (the amount your shareholders own).

If your business is healthy, the assets will be equal to (balance with) the liabilities and equity.

One important number we look at on the balance sheet is liquidity. In order to evaluate this, you want to look at the current ratio. This is a measure of working capital.

It compares the current assets, which are assets that can be turned into cash in the next year, with current liabilities, which are obligations that have to be paid in the next year. A ratio of at least 2:1 of liquidity against debt is ideal.

2. Income Statement

The income statement or profit & loss presents a summary of the revenues, gains, expenses, losses, and net income or net loss of an entity for a specific period. This statement is similar to a moving picture of the entity’s operations during this period of time.

The profit and loss account does exactly what it says: it shows whether your business has made a profit or a loss over a given period of time. It does this by showing your total income and your total expenses, and whether your business has earned more income than it has spent on its running costs.

If it does, then you’ve made a profit. A profit and loss account will include your credits (including turnover and other income) and deduct your debits (including allowances, cost of sales and overheads) to find your bottom-line figure – either your net profit or your net loss.

3. Cash Flow Statement

The cash flow statement illustrates a company’s short-term viability and is useful for calculating your ability to cover payroll and other expenses like bills. This financial report shows the cash generated (cash inflow) and used (cash outflow) over a specified period of time.

Cash flow is split into the following activities:

operating
investing
financing

The cash flow statement is therefore very useful for potential investors, lenders and creditors as it gives a clear view of a business’s short-term health.

4. Statement of changes in owners’ equity or stockholders’ equity

A statement of changes in owners’ equity or stockholders’ equity, reconciles the beginning of the period with an ending balance.

If non-financial Managers are to move upwards in their organisation, and in their career, a strong financial acumen is critical. Finance Skills can greatly improve your productivity, efficiency and performance, for as they say ‘knowledge is power’.

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