How important is the use of words? Is it important for business owners to be precise in their use of business and financial terms? Can distorted or inaccurate communication lead to incorrect conclusions and actions that are harmful?
Ask the average business owner if he or she wants to make more money, and the answer will be “Yes.” Ask that same question of a more experienced or sophisticated business person and the answer might be “Just what do you mean by more money?” As you might now imagine, the term “make more money” has different meanings to different people.
We’ve all heard a newscaster say things like the movie “Unbroken” made $47.3 million during its Christmas weekend opening. To be accurate, the reporter should have said “Unbroken” grossed $47.3 million in ticket sales. The “making of money” is an expression that refers to profit, the money left after paying all operating costs and expenses. The figures quoted in the newscast were sales during the period, not profits.
At this point you may say, “So what? Does it really matter?” Let’s look at a different scenario.
A business owner at a cocktail party talks about how much money he made. Most listeners recognize he is boasting a bit, and they pay no attention. But what if the same statement is made to his banker, a potential investor or lender, an important supplier or a prospective customer? The meaning now becomes critical because the credibility of the owner will be judged based on his use of business and financial terminology.
A banker or investor won’t make a loan or investment solely on the ability of the owner to use an accurate vocabulary. On the other hand, inaccurate usage of terms and inaccurate communication of business results – however unintentional – will cause them to wonder about the knowledge and acumen of their applicant.
If a vendor has a choice of two customers to promote and sell their products or if a customer has the choice between two sources to supply their needs, credibility may be important. If the decision is low-risk, meaning the acumen of the owner is of no import, the usage of terms may not matter. On the other hand, if the reputation, stature and sophistication of the business are important to the vendor or customer, the impression created through vocabulary may be critical. Although perhaps an extreme example, I recall the CEO of a large St. Louis corporation who would not consider suppliers if the representatives were sloppy in their use of language.
Think of it this way: There is no disadvantage to using business terms correctly, but there may be advantages to creating the image of a person who knows what they are talking about. Using improper or imprecise language runs the risk of damaging image or reputation. Why take that risk?
Bowser@BusinessValueInsights.com. Dan Bowser is president of Value Insights, Inc. of Durango, Chandler, Arizona, and Summerville, Pennsylvania.