Wednesday, February 12, 2014

Talk with Dr. Anil Lamba : Romancing The Balance Sheet

 Dr. Anil Lamba
Bestselling author, financial literacy activist, and an international corporate trainer, Dr Anil Lamba is a practicing Chartered Accountant and holds degrees in Commerce, Law and a Doctorate in Taxation.
Dr Anil Lamba's training programs are held internationally, with a client list exceeding 1000 large and medium sized corporations spread across several countries including India,USA,Europe,  Middle-East and the Far-East.

He has conceptualized, and is actively engaged in the implementation of, ‘Financial Literacy for All’, a movement towards creating a financially intelligent India.
With over two decades of experience in training and consulting in finance, Dr Anil Lamba has created and developed a series of training videos titled 'Figure Out the World of Figures',
and has done pioneering work in distance education and e-learning.
He has also written several books and over one thousand articles. His latest book, ‘Romancing the Balance Sheet’ is currently making waves.
Here is the excerpts of our talk with him on entrepreneur and Financial Management


Q.   “Romancing The Balance Sheet” was a huge success and now revised version has also been launched. What is in it for entrepreneurs or those wishing to be entrepreneurs?


Ans:   Entrepreneurs must understand that successful businesses stand on two pillars: 

           Pillar 1 - Profitability and Pillar  2 - Cash Flow

   Even if one of these pillars is weak, the entire edifice can collapse. 
   To be sustainable it is critical that a business is generating profits. But that is not enough. Entrepreneurs learn very early that there is no connection between the profit that an  organisation makes and its bank balance. Even highly profitable businesses can get into trouble if the Cash Flow Management is not effective.
Whose responsibility is it to ensure that these two pillars are strong? This is the responsibility of the entire organisation.
 It is a myth that finance management is the domain of those working in the accounts or finance department. The truth is that every action of every individual has a financial               implication.  And unless everybody in the organisation possesses the ability to understand the impact of their actions on the organisation's profitablity and on the cash flow, their actions will not be financially intelligent.
  All this and much more is explained in my book.

Q.     You train International corporate biggies on  finance management, interact with many small to big business owners on daily basis. What is the biggest failure point for an entrepreneur and how much an entrepreneur is aware about such failure point?

Ans:  It is an established fact that over 90 per cent of business failures can be  attributed to bad finance management. And this happens due to a widely-prevalent view that finance management is the responsibility of those in the finance department alone. The truth is that much of what happens in the finance department is accounting-related. Finance management or mismanagement is the result of the actions of everybody in the organisation.
The salesperson's decision as to the price to be quoted to a potential customer, or the credit period to be allowed is not a sales decision alone. It has a financial implication. The materials manager decides the volume of inventory to be maintained. But his decision has to be influenced by the impact on the working capital of the organisation. The size of the bench- taken by the HR person of an IT company - has a financial implication. Unless the actions of a large percentage of employees are financially intelligent, a business will get into trouble.

Unfortunately, in many cases, this awareness comes very late. Most organisations that we train, have come to us after suffering the consequences of bad finance management.

I wish entrepreneurs, and budding entrepreneurs, imbibe the culture of Good Finance Management at a very early stage. 


Q.     So can I conclude that even a brilliant business idea can fail if founder is weak in financial management. Appointing a CFO should solve the issue in my opinion.

 Ans:  That is absolutely true. However in my opinion, appointing a brilliant CFO, while desirable, will not solve the problem. Often financial mismanagement has already happened by the time the CFO comes into the picture

The solution lies in making a large majority, if not all, of the employees financially intelligent.


 Q.     What is the most common reaction of your students after  class.

Ans:   I wish I had undergone your programme years ago or before joining or starting the business. 

Q.     Your trainings are only for people already into finance or for anyone willing to be an entrepreneur. Does it fit for top management only or even for middle management as well?

Ans:   Since finance management is the collective responsibility of the entire organisation, our programs are for everyone, starting with the top person, the CEO and the Managing  Director.

In fact we are now working on a new concept called 'Creating FINANCIALLY INTELLIGENT ORGANISATIONS' (as opposed to creating financially intelligent individuals). 
And for this it is essential that financial knowledge and understanding permeates every aspect of the business and across all employees.  

Q.     Coming back to “Romancing The Balance Sheet” can you please share what all an entrepreneur will learn after reading the book.

Ans:   On reading 'Romancing the Balance Sheet' you will understand what Profit really means.

If Balance Sheets mystify you, these lucid truths will give you clarity.
You will learn the rules of Good Financial Management which will keep you secure. 

How to make the most efficient use of your Working Capital, and understand how an increase in Sales actually impacts your Profit. 

You will also learn  the simple secrets of Marginal Costing, Leverage and Funds Flow. 
Written in a simple and easy-to-read style, you will find yourself relaxing and enjoying this book as you become smarter at managing Finance.

Q.     Under the Lamcon umbrella you have corporate training, e-Learning, Books, e-Books, live e-classes, videos and many more. Can you please elaborate a bit more on each stream and how it is beneficial for different set of companies/people.



Ans:  Lamcon's philosophy is to be a one-stop solution for everybody needing financial education and training, notwithstanding the industry in which they operate or their geographical location.

If you wish to learn finance management, you can come to us (and attend one of our public programs). 

If you cannot do that, we will come to you ( and hold an in-company program).  

If that is not possible, you can enroll for an online live program or an online video program

If you want further flexibility you can acquire a set of our videos to watch at your convenience and even educate your colleagues. 

If there are constraints of connectivity or technological infrastructure, you can read my book

If there are thousands of employees in your organisation, we can provide a cost-effective solution by offering you e-learning programs (installed on you intranet site).

If you don't understand English, our products will soon be available in a number of regional and foreign languages too.

The idea is that anybody (from the CMD to the employee occupying the lowest rung), living anywhere in the world, speaking any language, using any media, should be    
able to access our programs.  

Q.     What are your expansion plans in near future?

Ans:   Our mission is to be the largest, the most credible and the most effective finance and management training company in the world.  We are working towards creating an infrastructure to reach out to a vast audience globally. To begin with all our programs will be focused on the field of finance. But once the technology and infrastructure is in place we will offer courses and programs in various other streams using branded trainers.

Q.   Can our reader have a glimpse of your class on youtube?

Ans:       You can view a demo of these videos at