The Importance of Language in Finance
“Whether you decide to use industry or organizationally specific language, it must be easily and consistently definable.“
When one thinks of financial efficiency it can be easy to overlook the importance of language. Lost in a sea of equations, projections, trends, and endless data, it is easy to see how this might happen. However, if an organization is to have a successful and efficient financial operation, implementing a proper emphasis on simple, clear, and consistent language is essential.
Often when discussing finance in the workplace abbreviations like JE, JV, GL, and NOI, can be used as common language with terms such as trial balance, financial projection, and budget analysis. Add in additional shorthand that is specific to a particular operation and this can become very confusing for veterans in a work environment, let alone anyone new to the organization. Too often these attempts to save time and create efficiency instead create confusion and discourage open communication.
How then can leaders in an organization keep industry language within the proverbial sweet spot between efficient, and confusing?
Ensuring your organization’s language contains three characteristics can improve its efficiency and promote open communication within the workplace. Language in the workplace must be:
DEFINABLE
TEACHABLE
REPEATABLE
Whether you decide to use industry or organizationally specific language, it must be easily and consistently definable.
Take the time to define a term, any time that term is used moving forward ensure its use fits that definition.
After defining the term, take time to teach others in the workplace that exact definition.
Finally, make sure the definition and understanding of the term is easily repeatable.
Utilizing these techniques helps to ensure that others will not forget the meaning of the term as you have defined it. As the term is correctly implemented, you will no longer need to be present to teach and re-teach the meaning and expectation that is communicated when the term is used. This creates an environment of communication that promotes education and proactive accountability. While this form of communication takes more time to build and implement, once implemented, it is most efficient and effective.
Make your language: Definable, Teachable, and Repeatable!