The Four Intelligences and
The Financial Statement Metaphor

Introduction

The objective of this document is to promote a better understanding of the interrelationships of the Four Intelligences using the Whole Person model described in "The 8th Habit: from Effectiveness to Greatness" by Stephen R. Covey..

I will briefly describe the Four Intelligences and why they can be important.

I will describe the main concepts of a Financial Statement.

I will describe the concept of Systems Thinking (the Metaphor).

I will describe some "calculations" that may move us to the simplicity that is on the far side of complexity.

I will then present the metaphor that applies the Financial Statement concepts to the Four Intelligences by way of Systems Thinking.

Reading or listening to the audio books "The 8th Habit" and "The Fifth Discipline" may make it easier to comprehend the concepts. For me, both books are well worth the time invested in reading them.

The Four Intelligences

In "The 7 Habits of Highly Effective People" and "The 8th Habit: from Effectiveness to Greatness" Stephen R. Covey describes the four intelligences. 

These correspond to our four parts of a "Whole Person": 

• body

• mind 

• heart and 

• spirit. 

The Four Needs of the Whole Person are described as:

• To live

• To learn

• To love

• To leave a legacy

The Four Intelligences or capacities are among our Hard Wired Birth Gifts:

• Physical  - PQ

• Mental - IQ 

• Emotional - EQ 

• Spiritual - SQ

Other Hard Wired Birth Gifts are:

• The Principles 
  Natural Laws - that are universal, timeless and self evident. 

• The Freedom to Choose 
  Between stimulus and response there is a space. In that space lies our freedom and power to choose our response. In those choices lie our growth and our happiness.
  The range of what we think and do is limited by what we fail to notice.

Finding Your Voice

"The 8th Habit" indicates that when the four Intelligences or Capacities are well developed they will be evident through Four Attributes (of greatness):

• Discipline

• Vision

• Passion

• Conscience

"The 8th Habit" gives an outline for "Finding Your Voice" in growing from effectiveness to greatness. Voice is described as one's unique personal significance. The "Inside-Out" sequential process involves 

• Using the Freedom to Choose

• Taking account of the Principles or Natural Laws 

• Applying Creative Force 

• Developing the Attributes of Greatness to one's life situations 

• In order to Find Your Voice.

Use Discipline to Identify a Need. Use Vision to apply a Talent in a way that  is consistent with your Passion and Conscience - and satisfies the Need.

Chapter 6 of "The 8th Habit" describes the next phase on the path to Greatness "Inspire Others to Find Their Voice". The remaining chapters of the book go into more detail.

The Financial Statement

In "Rich Dad, Poor Dad" and "Cash Flow Quadrant" Robert T. Kiyosaki provides descriptions of Financial Statements. In looking for an easy to understand "Stock and Flow" model, the Financial Statement diagram may have the advantage of being somewhat familiar.

The Financial Statement includes an Income Statement and Balance Sheet sections.

The Income Statement - records the rates and sources from which Dollars come in (Income) and the rates and destinations  to which Dollars go out (Expenses). The (rate of) cash flows could be expressed in Dollars per month

The Balance Sheet - lists items that have enduring value (Assets) and lists items with enduring obligations (Liabilities). The values are expressed in Dollars (as at the date stated in the financial statement).

Note that some assets appreciate (increase in value over time - capital gain) or produce income (like bond interest or share dividends). Other items listed as Assets might depreciate (decrease in value over time) or could have associated expenses (vehicle registration, insurance, service, maintenance).

If we combined the Income and Expenses Statement and Balance Sheet on a single page it might look like this.

Becoming Wealthy

In "Cash Flow Quadrant" Robert Kiyosaki writes "Ultimately it is not how much money you make that matters, but how much money you keep and how long that money works for you."

In the early part of an adult's life 80% of the Income might go toward paying Expenses and perhaps 10% might go to purchasing assets and another 10% to paying for liabilities (loans greater than 1 year for example).

Through planning and disciplined choices the Liabilities can be reduced and the value of wealth producing Assets can be increased. Through ongoing purchase of income producing Assets, a point may be reached where the monthly cash flow from the Assets exceeds the monthly amount of expenses - in financial terms the person is then "wealthy". 

The person became "wealthy" or "financially independent" over time through combinations of:

• reducing Expenses (that have negative cash flow)

• reducing Liabilities (that have negative cash flow or aren't related to producing positive cash flow)

• increasing Assets (that produce positive cash flow or capital gain)

• Increasing Income (that has positive cash flow)

The  Metaphor - 
Applying the The Financial Statement Concepts 
to the Four Intelligences

Some Correlations

In the table below I try to match the Body, Mind Heart and Spirit equivalents to the Financial Statement heading. I have selected several of the terms from "The 8th Habit" that seem to fit in the Income and Expenses rows. It would be nice to have a single word that encompasses the words in each cell - I have not discerned the appropriate terms for these sources of "Income" and sources of "Expenses".  "The 8th Habit" is fairly clear about which words fit into the Assets and Liabilities rows. 

"The 8th Habit" indicates that Spirit can have a Trust relationship to Body, Mind and Heart. For example the Mind in a trust relationship to the Sprit could result in intuition. I have tried to select words that relate substantially to only one of Body, Mind, Heart or Spirit. 

The Learning Organisation

In "The Fifth Discipline - the Art & Practice of the Learning Organisation" Peter M Senge describes the five disciplines as

Personal mastery

• continually clarifying and deepening our personal vision, focusing our energies
• seeing reality objectively and focusing our energies

Building shared vision

• translate individual visions into collective visions
• what would the people really like to do or create

Mental models

• learning to unearth our internal pictures of the world in order to see how they shape our actions

Team learning

• starts with dialogue - suspending our assumptions - thinking together
• discussion – defends of promotes a view - conversations

Systems thinking

• weaves together the first four disciplines, fuses the other four disciplines into a coherent whole
• how learning organisations interact with their world
• age of interdependence, active participants

The Personal Mastery, Mental Models and Systems Thinking disciplines are important in this analysis. The Financial Statement Metaphor is being developed as a Mental Model. What we choose to do with the Mental Model can contribute to Personal Mastery

Systems Thinking

In the language of "The Fifth Discipline"  the metaphor can be described in terms of System Thinking. The book describes Systems Thinking as:

• a discipline for seeing wholes

• a framework for seeing inter-relationships rather than things

• patterns of change rather than snapshots

• a specific set of tools and techniques originating in two threads: "feedback" concept of cybernetics and in "servo-mechanism" engineering theory

• needed more than ever today because we are becoming overwhelmed by complexity

The information from the Financial Statement can be further processed by examining the Cash Flows.

Financial Statement

Flow of: Dollars
Time period: Month
A "Systems Thinking" description of wealth creation:

• Each month, cash from employment (etc.) flows from the sources of Income.

• Each month, cash flows from Income into Expenses, Assets and Liabilities

• Cash flowing into Expenses is consumed. If the amount of cash available is insufficient to reduce all of the Expenses to zero, the remaining cost accumulates in Liabilities.

• Cash flowing into Liabilities pays the ongoing cost (interest) for the Liabilities and a portion of the cash flow can be used to decrease the remaining amount of the Liabilities. When the value of Liabilities reaches zero, the cash flow would be re-directed.. 

• Cash flowing into Assets increases the value of Assets 

• Assets produce interest, dividend or capital growth which is either fed back into Income, or retained in Assets where the value of Assets increases.

• When the value of cash flow generated by Assets exceeds the consumption of cash through Expenses and Liabilities - the person (or organisation) satisfies the definition of "wealthy"

Note that Financial Income and Expenses refer to Rates - for example Cash Flow expressed in dollars per month. 

Applying Systems Thinking to the Financial Statement Correlations

The Financial Statement is a snapshot and doesn't show the interrelationships, feedback or cycles. Lets apply the Systems Thinking described above, to the table of Financial Statement Correlations above. Extrapolating from the Path to Greatness in "The 8th Habit", the table below aims to answer the questions:

• what is Creative Force applied to, to give the Financial equivalent of "Income accumulating into Assets"?

• what is Cultural Software applied to, to give the Financial equivalent of "Expense accumulating into Liabilities"?

 This information should point to the equivalents for Financial Cash Flow - Dollars per Month. The Whole Person Model equivalents to the Financial Cash Flow could be (amongst others). 

Financial Cash Flow Equivalents

Notes:

In the examples below I have tried to make the concept more visible by excluding the flow that corresponds to the statement: "If the amount of cash available is insufficient to reduce all of the expenses to zero, the remaining cost is accumulated in Liabilities." In creating wealth I would try to eliminate that cash flow.

In the examples below, the person or organisation has the Freedom and Power to Choose. In financial terms for example, a person has the Freedom and Power to Choose to invest surplus cash in Assets.

The example of the "Systems Thinking" description does not cover every cash flow that could occur. For example a person could occasionally purchase a recreational vehicle using consumer credit. This would increase the Assets, Liabilities as well as the monthly expenses.

In the Financial Statement example, the time period was one month. In the examples below the term "on a continuing basis" is used to show that the item corresponding to cash arrives:

• more frequently than monthly and 

• not necessarily continuously.

I am not aware of words that adequately correspond to the terms of Income and Expenses when applied to our four intelligences. I have used the terms PQ Income, IQ Income, EQ Income, SQ Income, PQ Expenses, IQ Expenses, EQ Expenses and SQ Expenses. 

The examples are written in terms of a person. The example could also relate to an organisation. 

As an example, PQ Income results when the person applies creative force to Growth, Paying the Price. etc.

As an example, PQ Expenses result when the person applies the Cultural Software to Decay, Decline, Quick Fix, etc.

Remember that we derived the Financial Cash Flow Equivalents  in that table:

• Time and Physical Resources

• Thoughts / Sense of Calling

• Knowledge of Self

• Sense of Inner Light

When we apply Creative Force to the activities, attitudes or attributes listed in the PQ / IQ / EQ / SQ Income boxes we can generate the Financial Cash Flow Equivalents. For example, I choose to exercise for half an hour each day - I gain strength and flexibility (a physical resource) - I continue exercising each day and I develop some discipline - I can apply the strength or discipline on other areas of my life. Another example I avoid exercise and consume comfort food - I gain weight - my health declines (the negative of a physical resource) -  I continue to indulge in consuming comfort food.

Examples of creative force include amongst others:

• Focus, Mental Models

• intention, Personal Vision

• building human capabilities, Personal Mastery

• initiative, Systems Thinking

• collaboration / cooperation, partnering, Shared Vision

• awareness, support, Team Learning

• influencing, Guiding Ideas

• Ethical Dimension

Examples

Body / Physical - PQ

Flow of: - Physical Resources
Time period: - Continuing Basis
Replacing the financial statement terms with the correlated terms, a "Systems Thinking" description of Body / Physical well being follows:

• On a continuing basis, Physical Resources are created in the person's Life as a result of Choosing to apply Creative Force to Growth, Paying the Price, etc.

• On a continuing basis, Physical Resources flow from PQ Income  into:
  - PQ Expenses such as Decay, Decline and Quick Fix, 
  - Discipline and 
  - Indulgence.

• Physical Resources flowing into PQ Expenses are consumed.

• Physical Resources flowing into Indulgences pay the ongoing cost for the Indulgence and through the Power to Choose a portion of the Physical Resources can decrease the remaining value/cost of the Indulgences. When the value/cost of Indulgences reaches zero, (through Choosing) the Physical Resources can be re-directed into Discipline. 

• Physical Resources flowing into Discipline increases the value of Discipline 

• Discipline results in more Physical Resources being generated. This is either fed back into PQ Income or increases the value of Discipline.

• When the value of the Physical Resources flow generated by Discipline exceeds the consumption of Physical Resources through PQ Expenses and Indulgence - the person satisfies the definition of self sustaining physical well being.

Mind / Intellectual - IQ

Flow of: - Thoughts / Sense of Calling
Time period: - Continuing Basis
Replacing the financial statement terms with the correlated terms, a "Systems Thinking" description of creation of Mental / Intellectual well being follows:

• On a continuing basis, Thoughts and Sense of Calling  - are created in the person's Life as a result of Choosing to apply Creative Force to  Learning, Imagination, Optimism, etc.

• On a continuing basis, Thoughts and Sense of Calling flow from IQ Income into: 
  - IQ Expenses such as Ignorance, Pessimism and Unaware of Own Potential, 
  - Vision and 
  - Victimism

• Thoughts and Sense of Calling flowing into IQ Expenses are consumed.

• Thoughts and Sense of Calling flowing into Victimism pay the ongoing cost for the Victimism and through the Power to Choose, a portion of the Thoughts and Sense of Calling flow can decrease the remaining amount of the Victimism. When the value of Victimism reaches zero, (through Choosing) the Thoughts and Sense of Calling flow can be re-directed into Vision. 

• The Thoughts and Sense of Calling flowing into Vision increases the value of Vision 

• Vision produce more Thoughts and Sense of Calling which is either fed back into IQ Income or increases the value of Vision

• When the value of Thoughts and Sense of Calling flow generated by Vision exceeds the consumption of Thoughts and Sense of Calling through IQ Expenses and Victimism - the person satisfies the definition of self sustaining intellectual well being.

Heart / Relational - EQ

Flow of: - Knowledge of Self
Time period: - Continuing Basis
Replacing the financial statement terms with the correlated terms, a "Systems Thinking" description of creating Emotional / Relational well being follows:

• On a continuing basis, Knowledge of Self - is created in the person's Life as a result of Choosing to apply Creative Force to Love, Courage, Desire, Interdependence, etc.

• On a continuing basis, Knowledge of Self flows from EQ Income into:
  - EQ Expenses such as Fear, Apathy, Boredom and Dependence, 
  - Passion and 
  - the Social Mirror

• Knowledge of Self flowing into EQ Expenses is consumed

• Knowledge of Self flowing into Social Mirror pays the ongoing cost for the Social Mirror and through the Freedom and Power to Choose a portion of the Knowledge of Self flow decreases the remaining cost/value of the Social Mirror. When the cost/value of Social Mirror reaches zero, (through Choosing)  the Knowledge of Self flow can be re-directed into Passion. 

• Knowledge of Self flowing into Passion increases the value of Passion 

• Passion produce more Knowledge of Self which is either fed back into EQ Income or increases the value of Passion.

• When the value of Knowledge of Self flow generated by Passion exceeds the consumption of Knowledge of Self through EQ Expenses and Social Mirror - the person satisfies the definition of self sustaining emotional well being.

Spiritual - SQ

Flow of: - Sense of Inner Light
Time period: - Continuing Basis
Replacing the financial statement terms with the correlated terms, a "Systems Thinking" description of creating Spiritual well being follows:

• On a continuing basis, Sense of Inner Light - is created in the person's Life as a result of Choosing to apply Creative Force to Discernment of Truth, Empowerment, Affirmation, etc.

• On a continuing basis, Sense of Inner Light flows from SQ Income into: 
  - SQ Expenses such as Denial of Reality, Dis-empowerment, Control, 
  - Conscience and 
  - Ego

• Sense of Inner Light flowing into SQ Expenses is consumed.

• Sense of Inner Light flowing into Ego pays the ongoing cost of Ego and through the Power to Choose a portion of the Sense of Inner Light flow decreases the remaining amount Ego. When the value of Ego reaches zero, (through Choosing) the Sense of Inner Light flow can be re-directed into Conscience. 

• Sense of Inner Light flowing into Conscience increases the value of Conscience 

• Conscience produce more Spirit of Inner Light which is either fed back into SQ Income or increases the value of Conscience.

• When the value of Sense of Inner Light flow generated by Conscience exceeds the consumption of Sense of Inner Light through SQ Expenses and Ego - the person satisfies the definition of self sustaining spiritual well being.

Discussion

The utility of the Financial Statement is increased when we understand where the cash flows within the financial statement. Similarly the examples "Financial Statements" for our Physical, Mental, Emotional and Spiritual Intelligences may become useful when we understand the patterns of the flows. The model might help us to ask a better quality of question. For example - How can I increase the Passion in my life?

• Passion can develop from the accumulation Knowledge of Self from EQ Income sources such as Love, Courage, Desire, Interdependence. 

• The Knowledge of Self that I gain from  Love, Courage, Desire and Interdependence must be more than enough to overcome the EQ Expenses of Fear, Apathy, Boredom and Dependence. 

• I can discipline myself and choose to reduce EQ Expenses associated with Fear, Apathy, Boredom and Dependence. The EQ Expenses either consume or inhibit the creation of Knowledge of Self.

• I can discipline myself and choose to reduce the effects of the Social Mirror and live by the universal, timeless and self evident principles.

• Etc.

The example shows that :

• unless I had very low EQ Expenses (Fear, Apathy, Boredom, Dependence, ...) and 

• unless I had paid off my EQ Liabilities (the Social Mirror)

• I would require substantial investments (applying creative force) of Knowledge of Self produced by the EQ Income sources such as Love, Courage, Desire and Interdependence 

before I could accumulate (transform) the substantial levels of Knowledge of Self into Passion.

The models may be useful in examining how to improve the well being of individuals or organisations. For example, examine the effects of proposed activities or changes. If the proposed action takes place then how are the flows in body, mind, heart and spirit effected. If we fail to "pay the price" where is the "expense" likely to accumulate and in what form? Examining the flows helps to discover whether we are treating the symptom rather than the root cause of the situation.

The model may help to a situation from another's point of view. I read a newspaper article where a recent university graduate examined his choice to take a year off and travel before beginning full time employment. The writer purported that he viewed the situation from the Generation Y perspective and his prospective employers viewed the situation from the Baby Boomers perspective. I examined the actions using the Body, Mind, Heart and Spirit models described in this document. The person has the Freedom and Power to Choose. Having goals and plans addressing the physical, mental, relational and spiritual natures would certainly help to ensure effective use of the person's Time and Physical resources. Establish the goals before developing the strategies. 

The model is not easy to understand - and the aim of the model is to simplify reality. Perhaps reality is complicated. If this is so, then is it reasonable for me to expect to "find" sustained physical, intellectual, emotional and spiritual well being , without a plan? I believe that well being is an important element of personal happiness. Setting goals and developing plans will help a person to develop toward the attributes of personal greatness - vision, discipline, passion and conscience.  

Conclusion

I encourage you to become familiar with the models and use them on your journey from effectiveness to greatness - through applying Creative Energy. 

As a practical exercise, record a ten minute segment from the television evening news or news commentaries. Pick out one of the stories.

• Analyse it in terms of the most relevant of the PQ, IQ, EQ or SQ models. 

• Is creative force being applied? 

• Are the actions or emotions potential sources of _Q Income or _Q Expenses. 

• If the pattern or action persists - what _Q Assets or _Q Liabilities will accumulate?

Last modified 01/10/2008