Business Majors - The Personality Test

I finished my accounting final about 3 hours ago, and like many of my previous undergraduate accounting exams as soon as I started I couldn't wait for it to be done. I usually do well in accounting, but the it's always been an unpleasant experience. After the exam I began studying investments and the last three hours have been a huge contrast in pain, to the same three hours spent yesterday. When I think about it, the business majors all have a personality of their own, and the people who thrive in them seem to exhibit certain attributes. So for what its worth, here's my take on the major - personality match up!

The Accountant

Oh accountants. So neat, so orderly, so... anal. I hate because I lack these qualities, and some of them I really do which I had. The biggest thing accounting has taught me is how to view a rigid puzzle, and to appreciate tolerate all the checks and balances that are involved in financial reporting.

At first you learn how the 3 major financial statements link together. How the cashflow statement is a throwback to cash-basis accounting and reconciles cash from revenue, financing, and investment. How income from one year is gathered in retained earnings during closing, and how working capital accounts interact with revenue and expenses. It's all pretty elegant really, and with purchases all taking place on January 1st, life is a hunky dory place.

But then come the exceptions. Inventory = FIFO, LIFO, WA, Specific Identification. Depreciation = Straight Line, DDB, Sum of the Years, Units of Production. Investments = Held for Trading, Held to Maturity, or Available for Sale. Leases = Operating or Capital. Building Costs = Expensed or Capitalized. Foreign Currency Translation = Temporal Method, Current Rate, Hyper-Inflationary. The list goes on. The beauty of the simplicity, is replaced by ad hoc rules and standards dictating which method is appropriate and you end up tearing it all with imparments and re-statements anyhow. A rage begins to boil up inside me as I memorize the pointless completely offsetting joural entries involved in cash flow hedges, and I just want to scream "WHO CARES"... And that's why I'm not an accountant.

But some do care. If you like organization, putting everything in it's place, and naturally follow the rules to the letter in all of life's activities then accounting is for you. Some of the best accountants I know were group mates that "tut tut'd" when I wrote formatted "align left" instead of "justify", I didn't even noticed, it was a big deal to them. (Hence my solute to them with the justification of these paragraphs). You hear of things in big accounting organizations like "pen hierarchy" where newbies get one colour, mid levels get another and top level get the red pen. When reviewing work all the colours trickle down, with each level trumping the next. If I walk up to my i-banking boss and he tells me that red pens are reserved for managers, I'd shit a brick.

Marketing

I see marketers as exactly opposite to accountants. They are free spirits and their major focuses on instilling the primal business spirit into students, contrary to most other majors which focus on skill creation. It does have one thing in common with finance, most marketing majors don't end up in marketing, they end up in some sort of sales. I'll break it down into these two factions, but as a student who's always been on the numbers side, my view into these functions are not as strong.

The pure marketer usually exists in three organizations: corporate, consulting, or PR/Gov. Within these organizations most of the work is on the PR side along with event planing, but a lucky few really get to become creative and craft the firms message. The creators will be very smart, but maybe not a numbers fan. Their profession is essentially behavior analysis and psychology of the masses. They need to figure out what their consumers are trying to tell them or what they think of them, and then what steps they need to take to move those perception in the desired direction. To me it's voodo magic and often a unjustifiably high expense (look at the difference between Gross Margin and Net Profit with a company like Coke), but it works. Economically I understand what they are trying to do, scarce resource creation to allow for price discrimination. How it's actually done is much more of an art, with a ton of market analysis to drive decisions.

Sales

Sales is what makes the world go round. Small business owners, lemon aid stands, traders, corporate 'client services', it's all sales. Sales personnel from the marketing background tend to be the best at talking the talk. Students who aren't particularly academic but have good business instinct fit this mold well. I would describe this person as a very popular, well spoken person who above all can influence people. The slick salesman who no-one likes won't go very far, especially in corporate, it's the super networkers that keep reaching new heights.

In corporate it's usually the salemen with a background in the technology that the firm sells that really excel. This is because B2B selling is focused on a very knowledgeable customer, and the engineer turned salesman will both understand their needs, and also may have formed a relationship with them before flipping to the money side.

Traders are salesmen with all the tools of a more typical finance worker. Sometimes they actually don't talk to their end customer, but they understand their customer better than any profession because it's the relationship between the two that creates the profit, not the product. The customer of course is who ever may be on the other side of the traders trade. The trader must understand where the customer is wrong in their understanding of the product (read: security or asset) and he is right. Traders are self confident, very intelligent, risk taking individuals. Unlike most salesmen, traders don't need to be particularly social or nice, but most of the ones I've met are.

For the rest of the world, small businesses are filled with owners who read some sort of book on marketing and sales, because generally your brand and your core business is the one thing you can't outsource.

Finance

Okay that's a trader which is really sales but the picture is too good. Finance is for the soothsayers of today, the entire profession is based on an estimation of risk and reward. Accountants hate looking forward, and most estimates they do, they shop out to the treasury department. Financiers need to have a very strong understanding of accounting but it's always from the view point of what's next. What are the nasty surprises likely to come, does a regression with average barrels per day and average oil price do a good job modeling revenue - will it in the future as well?

A good financier can think big picture. When they learn subjects they really 'get it' when they understand the why's and how's, not when they memorize the method. The world works by methods, rules, and convention, but there is a little sloppyness to all of this; a financier who truly grasps the underlying framework will see when the convention does not hold and profit from it. This means that financier has a strong grounding in statistics, economics, accounting, and econometrics. It is a service industry so they must also be a good communicator, and be able to understand what the client is asking better than they do. This is a bit caveat'd by which side of the firm you are. A Ph.D. physics background quant may have few communication skills and still thrive, and those more on the sales side may get by with less fundamental knowledge of the products they are selling.

On the personal level my commentary on what makes a good financier is obviously biased but I'll take a stab. Those in finance are usually curious about the world. They are well read, like the news, and like to think about how seemingly unrelated events might fit together. How might a missile strike on North Korea affect the USD or gold? How would a dividend cut at RBC affect BMO? This comes through an understanding of systematic risk, everything is connected on the base level, and every event is an additional piece of information that may have value on predicting any future events. Financiers are usually competitive, relatively hard working, and quick witted. A professor once told me that in finance it's not good enough to be right, you need to be right and first - something I have really taken as a personal goal. 

I'd like to say that financiers aren't incredibly detail orientated, but I think it's just that I am not incredibly detail orientated. As I read more about the work of investment banking, there doesn't seem to be much room for error, and so this year has included a focus to drop that pesky 5% margin of error from stupid mistakes. Interestingly a very competitive bell curve has naturally given that goal a fair bit of incentive!

Major's I'm leaving out include Operations and Information Systems. Operations folk are an odd mix between engineer and accountant. It's a study of efficiency, and although I always enjoyed the math, the issues were a bit boring. I/S majors are a mix between marketing and computer science engineers. I worked in a high tech company, and am a big fan of internet culture, so I definitely sympathize with these folks, I'm just not that interested in web design or database management.