As part of my job as a consultant, I attend numerous networking events, conferences, and workshops to make sure that I continue to develop my skill set and to remain current on what is happening around town and who is involved. At one such event this past week I was reminded of the importance of being conversant in the language/jargon of the industry you’re in and in business and entrepreneurship terms in general…
I was at an event focusing on financing and bonding for small businesses in the construction industry. I have had clients in a range of industries as diverse as artificial intelligence/robotics and sign creation, but I’ve never worked with a construction company. The closest I’ve come is consulting for a marine composite manufacturer that developed docks, pillars, etc. used in construction projects. So I was at this particular event as much to learn as to network. However, most of the panelists were discussing the particulars of certain deals and using acronyms and references that I was not familiar with. As soon as the formal piece of the presentation was over, I immediately approached one of the bonding agents and scheduled a training so that my colleagues and I could become conversant in the language of bonding.
Why is this so important?
Firstly, it’s almost impossible to compete in a marketplace if you appear to lack knowledge. Most others in the space will not want to do business with you because they won’t see what your value added is if you cannot even hold an intelligent, industry-specific conversation with them. The first step in making sure that you’re able to make a good first impression is to learn the language of the industry.
Secondly, there are always people out there that will 1) insult you and 2) attempt to take advantage of you if they think you don’t understand what’s going on. I remember consulting with a company once that was exploring adding an employee equity incentive plan. I was a part of the debate at the meeting of the Board of Directors and was shocked to see how easily the Directors were able to use a lack of business vocabulary against the employees: One of the options on the table was a phantom equity or unit appreciation rights plan that would vest over 5 years. This was the plan that the CEO supported and would have been great for employees. However, multiple Directors argued against it stating that if the Board went to the employees offering “a unit appreciation rights phantom equity incentive plan that vested over 5 years and included the following triggering events…” nobody would understand what they were getting and it would, therefore, be ineffective. Now, they could just as easily have gone to the employees and said that they were offering “a plan for the employees to share in the success of the company that would consist of each employee earning his/her share over 5 years of continuous employment and resulting in a payout for the employee as if he/she owned a percentage of the company if the company was sold or if another event such as the employee leaving the company, death, or disabling injury occurred.” But the Directors were able to use the jargon as an excuse to avoid implementing the plan and sharing success with the employees.
The same thing happens all of the time with first time entrepreneurs raising venture capital money who do not understand the meaning of all of the items included in the contract and are taken advantage of when investors get their money out first and receive a larger payout than the entrepreneur had realized he/she had signed away.
You don’t want to be one of these employees or one of these entrepreneurs. Make sure that you learn the lingo of the industry and that, if you’re not comfortable and don’t fully understand, you ask for help. Unfortunately, you cannot trust that everyone you’re doing business with is honest and ethical, so you need to understand everything that is said or written to ensure that you remain in control.
A major reason I went back to school to get my Masters in Business Administration was that, with a sociology and critical social thought degree from undergrad, I was not conversant in the language of business. I could out-reason, out-argue, and out-strategize a lot of the people I came across. Yet, when I would attend meetings at my company discussing our financial state and strategy moving forward, I would have to leave each meeting and Google certain terms and acronyms such as EBITDA (earning before interest, taxes, depreciation, and amortization) and I was simply sick of my lack of knowledge and vocabulary holding me back when I knew I was smart enough to succeed in the business world. This is also a major reason that I have a particular affinity for entrepreneurs without a formal business background: I understand!
So, in an attempt to not make this post longer than it already is, I am going to keep my suggestions brief:
- Read everything you can get your hands on: business and industry journals and blogs, the business sections of newspapers, relevant magazines…anything that will use the jargon and discuss the topics that you need to know.
- Subscribe to word of the day emails from BusinessDictionary.com, InvestorWords.com, etc.
- Write down any term you hear or read and don’t know and look it up as soon as possible.
You can never have too much knowledge about your industry, so get out there and learn.
Also, let me know about times you were taken advantage of because you didn’t know the jargon and/or ways that you have been able to learn the vocabulary you need to compete. I’d love to hear from you!