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7. Cash Flow and Emotional Intelligence
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Transcription - Cash Flow and EQ
Darryl: Hi, my name is Darryl Munro.
Scott: And I'm Scott Richards. And welcome to our third of our series on business acumen and cash flow. And so in our first one, we focused on financial intelligence of cash flow, that's the strength and the speed of cash flow in your business.
Scott: The last one we did on strategic execution and we really focused on price and when you're pricing, you're relating it back to your strategy. And today is on our EQ, our emotional intelligence and how we need to use our EQ when we're dealing with cash flow or making decisions in our business. So, Darryl, I'll allow that you will hand over to you.
Darryl: Okay, thanks, Scott. It's interesting that probably a lot of people have looked at our formula and are wondering why have we got EQ sitting out here. So the intent today is to give you some context about that. We're not going to go into a lot of depth but we'll give you a bit more information about it.
Darryl: The focus on benefits of applying emotional intelligence. Emotional intelligence is made up as basically four attributes, self-awareness, so we can actually understand what we're doing in a situation, self-management, therefore we take action to actually address things that we're aware of in ourselves. And I'll talk about example. Social awareness, being aware of what's around you. And then relationship management because that's critical in everything we do.
Darryl: How does this benefit us when we're looking at business acumen. And that's what I'm going to focus in on. And it comes back, once again, to research. There's been a lot of research done on EQ. I guess research that came from the journal of psychological science actually really sums it up in terms of that benefit about the ability of making decisions.
Darryl: Through here, we've understood our financial story. We've started to think about the seven leavers that we've used to get the results we want but then it's crunch time. We've made our choices, now we've got to make the decisions. And this is where most people are like deer in the spotlight or the rabbit in the spotlight.
Darryl: What happens is, and emotional intelligence research supports this, is our anxiety level comes up. However, what they've discovered is people with higher levels of developed emotional intelligence were able to actually turn off the emotion that was creating the anxiety so they could focus with crystal clarity at the decision point that had to be made. It's not like they weren't ... they couldn't have emotion but to the outward appearance they don't appear or allow emotion to get involved in the equation. So yes, they will still have them but they're managing it.
Darryl: Now when they're confronted with the facts, they can actually see with clarity what actions they need to take. It might sound a small thing, but in fact, it's a huge thing. Cash flow would be an example. I'm in a situation where I've assessed that I'm panicking because the cash flow is dropping off and I've got significant bills. I've just got a letter from the Australian tax office to say I've got tax to pay. And now I'm really, I'm starting to fire up.
Darryl: High EQ says, "Wow, let's take a step back, park the anxiety, start to think about a strategic or some tactics to actually address that." So there's one example. I guess the key example that emotional intelligence brings to the equation is the one around communication. So the Journal of Consumer Science actually discovered that people who have higher levels of developed emotional intelligence, they actually are better communicators. So why would that be?
Darryl: Well, again, it's the same thing. It's the ability, self-awareness, self-management, and the social awareness I need to communicate with people. I need to build the relationships around me with my customers, my staff, et cetera. So my anxiety that could cripple me in being effective is actually managed and I'm able to communicate and look like if you're the captain of the ship, you need to be the one that's calm and cool and collected even though under the surface you might be fluffing and getting concerned. So again, you bring that clarity.
Scott: So what you're saying, Darryl, is when you're under stress of cash flow and we've all worked for bosses who are under stress and you go and ask them a question and they just bite back at you.
Scott: They're lacking some of these.
Darryl: Absolutely. And more often than not, they just don't want one more thing dumped on them. It's like don't give me another decision to make. I'm up to my neck in it. But the thing is that the first step in ... it's a real pair of steps I suppose is being aware of that. So now that I'm aware of it, how am I going to manage that so it doesn't overwhelm me? So it might be that I've got to step out mentally and actually process that emotion, and then come back and apply my logic to get things happening.
Darryl: The communication one, the critical nature of being able to actually, say, for example, you're in the process of negotiating a price for a product. And you know this is a critical tipping point for you in your business. The ability to sit around the table with those that you're negotiating over and appear controlled, have good clear message and get your message across, that's a whole advantage over somebody else.
Darryl: I know this is a quick trip through business acumen and the components that make up our model but each one of those are critical elements that will give you an edge over others that haven't discovered the pair of this formula.
Scott: Yeah, no. That's spot on, Darryl. And especially if you're not thinking straight, then when you go to back to look at your strategy or when you're making a decision, you might end up doing something because it looks like it's going to be the quick gain but it doesn't fit in with your long-term strategy. And so it can end up biting you. And then like you said, if you can't communicate to your team members why you are doing that, and it's incongruent with your strategy when you start.
Darryl: Yes. And I guess, it's another thing is sometimes we're influenced by the things around us. And we start to move away from our strategy, a well throughout, well-planned strategy based on real, real determined process coming out of say the business canvas models. And then all of a sudden we're influenced, we start going off, but we don't actually pull ourselves up. We're not aware of what we're doing and there we ... It's almost like we've lost a lot of ground because of it. So small steps.
Darryl: Now, this, in the work that we do with our clients, we don't try and teach EQ. There is really fabulous resources out there. Danny Goldman and others that have written a lot of material around this and lots of articles on it. It's to raise the awareness that if you're struggling and feeling anxious about the decision making, that's the area that you want to juice up a bit because the benefits to you are huge.
Scott: Yeah, exactly.
Scott: In summary, that's the end of our series on business acumen and cash flow. And so the first one, we talked about the cash flow velocity, the strength and the speed of cash flow. The second one we talked about strategic execution.
Darryl: And the seven levers.
Scott: And the seven levers. And Darryl put brilliantly today about the emotional intelligence and being able to think clearly, and then to be able to communicate when you're under stress, especially from when you have cash flow.
Darryl: And I suppose one quick story that comes to mind is the great speakers of the day. They weren't born great speakers. They had to develop their skill. And quite often, they would hire coaches to teach them how to manage, raise their EQ so they could manage that anxiety when they stood up in front of lots of people. So all of these components are critical in your success. So how do they find out more?
Scott: If you want more, you can subscribe to our YouTube channel and the link's right below us or you can connect with us on social media where we like LinkedIn. You can also find our page on Facebook, Twitter. The details are below on YouTube. If you're on our website, you go to the contact us page. Please, if you have any questions, send us an email or contact us. We love hearing from people and also, we have business acumen groups where we provide special tools and videos that we don't put out on the thing. And so they're on our Facebook and on LinkedIn as well.
Darryl: All right. Well, thank you, Scott.
Scott: Thank you, Darryl.
Darryl: And we'll look forward to future series with you.