​Me & the Bees is creating a buzz.  Mikaila Ulmer turned her great-grandma’s lemonade recipe into an $11M Whole Foods deal.  From which part of the profits go to honeybee causes.

Honey lemonade is sweet, but sweeter still is the story: Mikaila is just 13 years old and started the business at the age of four.

​The lemonade’s winning ingredient may well be the honey, but it’s also business acumen. At the age of four, while most kids bring their teddy bears to show and tell, Mikaila had a lemonade stand at a children’s business fair.

Lemonade stands are an almost mythical  entrepreneurial platform for children. And yet here is this young lady from Texas creating a very real business from her sidewalk venture. 

The delightfully articulate Mikaila appeared on Shark Tank and talked to NBCabout how she got (literally) stung when she was starting out.  Methinks with her business savvy, and no-doubt presence of behind-the-scenes advisors, this social entrepreneur won't get stung in business too often.

Wishing you a sweet week,

Peter

Investors use a company’s profit this year as a starting point for predicting next year’s.  The prognoses drive the company’s share price. 

When making those predictions, it can be reasonable and make sense to adjust the reported profit figure so that it better foretells the future.  But that’s where the trouble begins. ​

It is a truth universally acknowledged that a business seeking better returns must be in want of women.  (Sorry, Jane Austen) 

You see, research has shown that businesses - and particularly investment managers - perform better with a balance of men and women in the workplace. ​

Too much testosterone can wreak havoc on financial behaviour. So here’s the conundrum: why are there not more women in executive leadership roles? 

“Women and minorities manage only 1% of the asset management industry’s $71 trillion in assets and only 15% of global mutual fund managers are women” says  Girls Who Invest.  It’s an organization that’s done the sums and exists to change them. 

Girls Who Invest selects about a hundred female students each year after a hard-fought application process. It then puts them through three-week summer camps at Wharton and the University of Notre Dame.  The women emerge prepped and inspired for a career in finance. 

Each year, after teaching the Color Accounting module at the camps, we leave uplifted.  The bright minds of the savvy up-and-comers, from widely diverse backgrounds, give us great cause for optimism.  

Clearly, balance shouldn’t only happen on balance sheets. 

Peter

​Albert Einstein, the greatest scientific genius of his time, changed the very way we understand the universe.  

He discovered the truths that led to the equation E=MC2 and the theory of relativity by conducting visual thought experiments. Famously, he imagined riding alongside a beam of light. 

Einstein had been unhappy at school in Germany where, in the late 1800s, schooling was rigid and all about rote learning. So he moved to German-speaking Switzerland and sought out a school in Aarau which followed the principles of Johann Pestalozzi, an educational reformer.  Those principles made all the difference and set him on the path to his breakthroughs.
 
Pestalozzi’s motto was “Learning by head, hand and heart”.  He wrote that “Visual understanding is the essential and only true means of teaching how to judge things correctly.”  The learning of numbers must be subordinated to first understanding concepts, he believed.
 
On so many levels, our worldwide community of Color Accounting educators are proud to call ourselves “Pestalozzians”.  Belief in the individual. Use of hands in the learning process. The power of the visual BaSIS Framework we use.  And even the priority of words over numbers as one learns to make sense of financial statements.  
 
200 years later we are unreservedly happy to take our hats off to you, Johann Heinrich Pestalozzi, with a deference you wouldn’t demand from us.

Peter

How accountants sort things can have serious consequences. And provide some fun.

In our business acumen workshops, managers talk about how they organize their kitchen or their clothes. There’s a lot of laughter as the obsessive-compulsives in the room get outed for their color-matching proclivities. 

Photo by Hannah Morgan on Unsplash

Applied to accounting, we ask questions like: should we classify the cost of a trip to meet with a client as Marketing or, perhaps, Travel? And if Travel, should we break out airfares from ground travel?

The important lesson is that we can obscure financial information by how we aggregate, slice and describe it.  

For example, when a mining company’s sales are reported on its income statement by type of mineral rather than by mining region, it can disguise how much of the company's activities happen in dodgy places.  
  
Back in the classroom, our recent favorite classification was a student who said she organized the novels on her bookshelf by how the authors would get along. Who needs alphabetic when you have that kind of insight?

Peter

Photo by Dmitri Popov on Unsplash

In 1954 Sam Sheppard was on trial for murdering his wife. The judge, explained to the jury that if they were to convict him there needed to be no “reasonable doubt".

But the judge's definition was so convoluted, the jurors likely misunderstood him. Ten years on, Mr. Sheppard was released after a second trial.

Photo by Peter Lloyd on Unsplash

Language matters. And that applies as much in the numeric world of accounting, as anywhere else. 

When we started Color Accounting twenty years ago, we thought color was the big thing. It still is integral to what we do. By color-coding financial statements we engage people's neurological response to color, thereby achieving accelerated learning.

But now we believe that our innovation around language and deliberate - and sometimes atypical - use of words is an even bigger deal. 

For example, when people grasp what  “revenue", “expense”, and “equity” really are (and are not), it opens a massive door to clarity of financial thought and access to powerful communication. 

The lawyer of an accountant on trial for revenue shifting told me that, even when handing down their guilty verdict, the jury didn’t clearly know what “revenue” was. They thought it was money. And vaguely thought he'd nefariously put it under a mattress or similar. The lawyer believed that his client may have been imprisoned because of this confusion.

If the jury had better appreciated how gray rather than black and white the issue of revenue recognition is, they may have had reasonable doubt. 

Clearly, words change lives. 

Peter

Photo by Nicholas Kwok on Unsplash

Color Accounting Partners from around the world assembled last week in London to discuss our quest to advance accounting literacy globally.  

With participants from Australia, China, Canada, India, USA, South Africa, Greece, the Caribbean and UK, it was also an opportunity to observe another color spectacle, Trooping The Colour.

Photo by Mosa Moseneke on Unsplash

This British tradition of Trooping The Colour, which goes back to the 1600s, has hundreds of marching and cavalry troops in their finest, presenting themselves to the British sovereign and marking her birthday.

Today of course, it is an excuse for pomp and ceremony which the Brits do like no other. 

The assembled Color Accounting trainers had the pleasure of watching the parade from a vantage point near Trafalgar Square, capped off by a flyover from the Royal Air Force, Spitfires and all. 

While the armies of yore used color to enable soldiers to recognize their own companies, we use color to logically code concepts of company finance.

And while the empire has long since shrunk, the quest to spread accounting literacy to the world continues to expand, and took a big, fun and fabulous leap forward last week. As you can see below.

Peter

Attendees to ColorCon18, our global Partners conference, assembled in London, England