Master the Rules Before You Break Them
I believe this adage is somehow connected to another saying, which is, “To break the rules, you must first master them.” When we put this in the context of business, consulting, and services, the reality is you first need to have a clear understanding of current or existing rules to be able to pinpoint which ones need to be changed or improved. Keep reading to learn more on how you can apply this adage to your journey and experiences as an independent and how this statement is particularly applicable in the accounting and business industry.
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Master the Rules Before You Break Them 'To break the rules, you must first master them...' You might attribute this quote to Pablo Picasso, the famed Spanish artist, or Tenzin Gyatso, the 14th Dalai Lama, as it seems to fit segments of their life stories rather well. In reality, there's no proof that either of them ever spoke these words about mastering rules before breaking them. The adage is recognizable to some as an advertising slogan used by the Swiss watchmaker Audemars Piguet. But its origin is probably from a lesser-known author from a century earlier. Regardless of its original source, the concept and value of the quote are not lost simply because of its misattributions. Enough people say it because of its essence. The idea of mastering the rules before breaking them is incredibly relevant in financial analysis and investment research. As much as there are lots of accounting miscalculations and miscategorizations at governing accounting bodies, the fact remains that accounting is the language of business. And we're sort of stuck with the reporting that we've been given. Financial statement reports and filings are still the main ways companies communicate, report performance, and signal future prospects. While a standard English dictionary may add a few new words each year, accounting rules can change dramatically from one year to the next. And while English may vary slightly from country to country, British English remains easily understood by Americans and vice versa. This is not the case with financial statement reporting. The calculation of earnings, assets, and liabilities has changed dramatically over time and is incommunicable across international borders. It's particularly the case in advanced accounting. How would one know which rules are problematic if one doesn't know the rules at all? Ninety-nine times out of 100, when one reader doesn’t understand Uniform Accounting earnings calculations, it's not because of a company’s adjustments. It's because that person usually doesn't understand how complex, confusing, and inconsistent the actual rules of accounting are in the first place. First, we need to master the rules. Then, we understand which ones are broken and need repair. That's what inspired Uniform Accounting. In any field, you need to master the facts and orthodoxy first before attempting to disrupt it. Otherwise, you're approaching the challenge with an incomplete data set. It should come as no surprise, then, that we focus so heavily on learning from the investment greats, such as Benjamin Graham and Warren Buffett in the value space and Richard Driehaus and Julian Robertson in the areas of growth and deep fundamental research. We can develop better investment strategies by understanding and learning from the greatest investment minds who have come before us. Hope you’ve found this week’s insights interesting and helpful. Follow us on LinkedIn. Stay tuned for next Friday’s Everson’s High-P Fridays! As an independent business owner or marketer, there are a lot of ways to engage with your target market to improve your brand’s online presence. Learn more about how you can market your brand effectively on Quora on next week’s Everson’s High-P Fridays! |
