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Financial Freedom Is Merely Organized Common Sense
Compare and Contrast
When I was in high school, I found the compare and contrast essay form to be difficult. Later in business, I found it to be the most effective way to communicate important information.
We live in a world where information is everywhere. Information is past the point of being useful. What is useful now is the way to find it, filter it and to present it. That is where compare and contrast works.
Consider the familiar annual budget.
At the end of the first quarter, actual results are presented alongside the budget. Does that help? No! Because if the budget has been thoughtfully prepared, almost all of the actual results will be “as expected.” No meaningful information there.
There may be some results that are not as expected, but how to find them in a 500 line presentation. How much better it would be if the presentation was only the 5 items that were “not as expected.” Better if there is an explanation of how they came to be. Better still if they include a recommended action.
Information should be the prelude to action. It is of little value in isolation. Do not make the decisive information and the action steps hard to find. Offer explanations of how the difference arises and what options there are to acquire the benefits.
The technique works with more than budgets.
You can do it with client presentations. Two columns. What you are doing, and what I am proposing. List the things that are about the same in each column. Most of the factors go here. Emphasize the commonality. Then point out the few differences. Focus on the differences. Explain the benefits, outline the choice needed and demonstrate the connection that will acquire the benefits.
Accountants will recognize this as a capital budgeting technique. Things that are the same under both options may be ignored because the decision will not alter them. Only the differences matter.
Compare and contrast does not provide more information, rather it provides less. The information that remains though is useful, contextual and actionable.
That is the goal.
Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. don.s@protectorsgroup.com
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