It was a warm sunny spring day talking with a client when he asked a terrific question. It was not the meaning of life or why crabs walk sidewards.
He asked the question “What makes a high performing finance team?”
I coughed and splattered like an old Massey Ferguson Tractor starting up in the middle of winter. What a great question. I suitably paid him a compliment and said, let me think about that….
I thought through the various attributes and skill sets required.
A great CFO / Financial Controller thinks and acts more like a CEO than a hard-core bean counter or accountant. What do I mean? Over the past ten years with the advent of some wonderful technology conceivably, the role of a CFO is a lot less about the numbers. Possibly as low as only 20% of the role is now number crunching.
This is not to downplay the importance of regular, consistent, accurate and timely reporting. It’s the opposite. It means that a lot of the backend is more straightforward and can, in part be done more automatically.
You may be wondering what does a CFO does with this additional spare time? In summary, sitting down with the CEO and jointly developing and setting strategy. The CFO needs to understand what the business needs and requirements are for its financial health> Where the business is heading and ensuring that the finances are there ready to contribute.
So, with the CFO taken care of what does the rest of the finance department do? There is a limit to how many YouTube clips one and watch in a day. The finance team needs to be involved more broadly across the business. It’s a lot more than just functionally or transaction based.
There is a difference between independence and calibration. Finance staff are to be the independent sounding board for others within the business. A good finance team will quickly work out their role. They are not to be there as everyone’s friend and say yes to everything. Sure, it may work in the short term. The finance team may quickly be social star celebrities. A far cry from a few years ago where they would rarely emerge from their darkened office, holding tightly to their pencil and electric calculator making their way slowly to the coffee machine without eye contact with other staff.
The bottom-line, short term popularity is only short-lived and does not add value to the business in the long term.
Finance teams are to be the voice of reason. You may be wondering what that means and what it looks like? How can we be collaborative but be independent? It may be as easy as saying “hang on, we are moving towards A. What about D or E?”
High performing finance teams need to be an enabler of the business. They are helping to achieve business goals. They are not to be on the sidelines and saying no to everything. They also need to be ensuring that governance requirements are met.
Business finance teams are not a government department, that is no one moves until it is perfect. Sure, from time to time, there may be the voice of reason to slow down. Good finance teams will sit in the middle, getting the balance right, being a balance between enabling the business and providing good governance. Another way of looking at it is how we can say yes and then manage the business risk? If you can say yes, then you are beginning to understand business risk. A brilliant accomplishment.
A high performing finance team will be in the centre of the business, knowing exactly what’s going on in the meetings. Their role is much broader than just the numbers. Now finance teams are explaining why the business is doing what it is doing. This is vastly different from the old days of sitting in a darkened room calculating the numbers, that very few truly understood.
High performing finance teams spend time in understanding the business. They are willing to roll up their sleeves and get their hands dirty. They are inquisitive and want to understand what and why the business is investing in.
One of the most significant challenges in finance is when everyone is saying yes, but you are thinking no!! Do you say something or not? Do you take a risk? I have been faced with this predicament, and I did say no. I have found others may be annoyed that they have been challenged. However, I also noticed that you are still respected. Always be clear, let your yes be yes and your no be no. Don’t forget. You are a leader within the business, not just the finance department, so voice your opinion.
From time to time, your ethics will be challenged. Simply put, if you lose your ethics, go home! I am not saying it will be easy, far from it.
For high performing finance team’s relationships are key. In the busyness of business and life, it is easy to overlook relationships. The more finance staff invest in relationships and build creditable trust, the better. Personally, the best conversations I have had have nothing to do with money.
It is easy to form relationships with those we naturally synergise with. Make a consorted effort to mix with those of a diverse background. That diversity comes from gender, culture and a different way of looking at issues.
High-performance finance teams must be gifted communicators. Communication is a critical skill. Yet, many accountants are poor communicators. If you are not naturally, a brilliant communicator then, practice, practice, practice and get yourself an honest, gifted communicator mentor that you trust.
By now, you have concluded high performing finance teams are less about the numbers, and more about the business, relationships and communication. How times have changed.
So, moving forward, what is the mindset do we need?
1. Always be forward thinking. Proactive. We need to be in front and not behind.
2. Always help the business to be forward thinking
3. Get out from your desk
4. Provide understandable insights. If we don’t achieve a budget, understand why not just what
5. Be action oriented
6. Have a backbone and have the courage to say it
7. In God we trust and, in all others, bring the data. Get accurate, timely and informative data. Analyse the data and provide insights from it.
8. When tough times come. It’s time to invest