Kelcee Blue & Lance Geda | Director of Strategic Finance
Have you ever been excluded from a conversation out of fear that you would be a roadblock or heard an audible “uh-oh, finance is here” when you walk in the room? These aren’t digs at your personality, but rather what you represent to your colleagues in the big-picture of the organization.
It’s not uncommon for finance to be viewed as the ‘brakes’ –forcing a pause on passion and momentum to introduce a healthy dose of practical ‘financial’ analysis. Clearly, it’s an important pause but it’s not always well-received.
This is why finance professionals must go beyond technical expertise to influence through connection for the good of the organization.
The Role of Finance in Your Organization
By default, finance can be task-oriented and siloed in organizations. To other departments, finance can feel like a ‘no’ factory–an obstacle that is always in their way of getting things done. As a result, the true power of the finance department often goes unrealized.
The true scope of the finance department includes things like:
- Forecasting Future Performance
- Providing Insight for Effective Budget Allocation
- Maintaining Accurate Historical Records
- Monitoring & Managing Cash Flow
- Identifying & Mitigating Risk
- Structuring Financing & Capital
- Managing Investments
- Ensuring Compliance with Tax Laws
- Advising on Cost, Pricing, Tax Planning, Etc.
A business would not be able to operate with the support of the finance department. But it’s still, often, a thankless job–people don’t like hearing no so when practical models restrict their department budgets, the ‘finance guy’ becomes an easy target for frustration.
Still, finance doesn’t have to be the enemy of every other department in the organization. In fact, finance can be one of the greatest assets in the organization–a strategic partner to every other department and a trusted source of input on key decisions.
The difference is in how you choose to work with others.
How Finance Can Be a Strategic, Collaborative Partner
To be a collaborative partner, focus on being approachable and building relationships rather than simply completing task lists. Understand the business beyond the numbers so that you can help your colleagues understand the reason behind your no’s. And use that opportunity to communicate effectively with other departments.
Here’s how:
- Engage with Stakeholders and Cross-Functional Departments
- Ask Questions–People Like to Talk About What They Do
- Be Helpful, Genuinely
- Be Proactive in Connecting Team Members
A small but growing company had increased annual revenue from $2M to $6M over the previous 24 months and suddenly found themselves with a lot of new expenses and no realistic budget.
They also had gotten by for years without a real bookkeeper. As a small company, the CEO and an administrative assistant handled the finances. As a result, they had a cumbersome chart of accounts that was all but unusable and a very disorganized approach to completing expense reports which were habitually months behind and always missing receipts.
They hired an accountant, expecting to get someone to keep the books but what they actually found was a collaborative partner who invested his first 12 months on the job into establishing relationships with every department and teaching them what he needed from them to do his job.
No finger pointing, no blame, no sharp tones–just genuine helpfulness that earned the respect of his colleagues and ultimately resulted in clean financials that transformed the organization and it’s understanding of it’s position.
Let’s dive into how this accountant was able to navigate his new role and become a strategic partner in the organization.
Be Approachable & Build Relationships
You might be perfectly happy operating in your finance silo, but you’re not doing yourself or your organization any favors by toiling away in your office, only reaching out to your colleagues when with rejection and sharp disapproval when they haven’t completed their expense reports, department budgets, timekeeping approvals, or fill in the blank with whatever finance task you are working on.
Human beings are built for connection.
By focusing on being approachable and building relationships, you can build a bridge that enables the flow of information. As a result of this new level of communication, finance can build better forecasts and garner more insight into risks and opportunities that ultimately serve your organization in new and unprecedented ways.
Explain the ‘Why’ Behind Your No’s
It’s easy to say no when it doesn’t fit into the budget–or the big picture. It’s justifiable to say no when the proposal is past due for approval or it doesn’t follow policy. There are many situations where no is the right answer, but from a relationship perspective, rejection is rough and the word ‘No’ is rejection.
Instead, soften the blow of your no with an explanation that helps people understand why you are saying no. This will improve the process and reduce future bottlenecks by educating other departments on how their roles financially impact the organization.
Focus on the Fix
Late expense reports are the bane of every finance person’s existence. If there is one universal source of conflict between finance and the rest of the company–it’s expense reports. Rather than harping on your colleagues for late reports month after month, center your communication around fixing the problem rather than punishing the offense.
Late reports delay month-end closings and future approvals. If expense reports are late, things won’t get paid on time and that will negatively impact vendor relationships and the organization’s reputation. This is a sensical explanation that anyone–finance or not–can understand.
Focus on the fix by communicating what action needs to change and why that change is necessary rather than sounding like a broken record as you call out late expense reports month after month.
The Role of Finance to Help Everyone
If money isn’t tracked, the organization has no way of knowing where they are spending money and if they are operating at a profit or a loss. If spending isn’t kept within reason, the organization will run short in one area or another. These are preventable ways that businesses fail every single day.
Coordinating financial activity is imperative for success and it falls on the finance department to create a collaborative environment that facilitates coordination.
When you create this type of environment, finance becomes a strategic partner rather than a roadblock. Instead of ‘forgotten’ invites to important meetings, you’ll have more opportunities to have input on strategic decisions and be better positioned to use your financial expertise.
Understand Your Business Beyond the Numbers
How much do you know about the business that you support? Can you name their top two or three competitors? Can you describe the company’s target customer(s)? Do you know what the top three goals or initiatives are for this year?
More importantly, has your level of understanding of your company grown as you’ve matured in your career? These questions are key to really understanding how the business operates. This will, in turn, give you a broader perspective that allows you to see risk and opportunity, driving focus in finance accordingly.
How to Get Informed on Your Business:
- Learn About Your Stakeholders
- Ask Questions–Double Click Into the Why
- Research the Market and Your Competition
- Attend Lunch & Learns or Other Company Opportunities
Exploring Stakeholder Interests
By default, for-profit companies focus on shareholder or investor interest. The whole business is structured around ensuring profitability–and in finance, managing cash flows and maintaining transparency in financial reporting is priority number one.
But finance should also care a great deal about other stakeholders, like employees, customers, suppliers, and lenders. Recruiting and retaining employees is largely considered a function of Human Resources. But the ability to successfully attract and keep talent has a distinct financial component.
By understanding the employment market(s) that your organization operates in, finance can partner with human resources to build competitive salary and benefit packages while ensuring the company can support those positions without incurring significant layoffs.
Similarly, when finance acts as a strategic partner, the collaboration can drive revenue generation and customer retention through a better understanding of pricing strategies and the relation of different revenue streams to the financial health of the organization.
Understand the Market
Market research is a common topic of conversation in sales and marketing and it has a regular place in C-suite meetings, but it’s not often a top-of-the-list conversation starter in finance. However, taking the time to deep dive into the market conditions and positioning of the company can benefit finance professionals in all industries.
From accurate projections and better scenario analyses to the ability to recognize and potential threats or anticipate regulatory changes, knowledge is power. For example, imagine you are a finance professional for a growing SaaS company.
Understanding how companies are embracing digital transformation and what emerging technologies might compete for your organization’s services could help you proactively identify when the company needs to change pricing strategies.
Once you recognize the need, you use your financial expertise along with your knowledge of the market to create a scenario analysis. You deliver your analysis with your insight to senior leadership, introducing a well-thought out strategic opportunity. The idea is vetted and put into practice with great results.
This is how trust is built and strategic collaborations are forged.
Communicate Effectively
Here’s a typical scenario. A business needs to make a decision so leadership contacts finance to quantify impact. That’s smart, they’re seeking an analysis to make an informed decision. Finance prepares the requested analysis based on the information provided and then delivers that information via an Excel file or a short, siloed presentation in a meeting.
The problem is, people don’t always understand what they need so from the beginning, the ask isn’t always well thought out. As a result, finance operates off misguided or limited, often secondhand, information, delivering a skewed analysis. When the model is delivered, key takeaways are lost in translation because leadership didn’t know what to ask for and finance didn’t have all the information to know what they really needed.
Sound familiar? How many times have you spent too much time and effort chasing the wrong rabbit? The root of this problem is ineffective communication. If you can learn to communicate more effectively, you can get all the information you need to be a problem solver and not a problem creator.
Create a Problem-Solving Process
One way to protect your time is to unite against a common enemy. Take a page out of the IT playbook. When you have a technical problem, you go to IT and you put in a ticket. Even if you try to go directly to the source and get a quick resolution, you’re told to put in a ticket before they can respond.
It can be frustrating, but the reason behind the process is solid. Before they can address a problem, they need to gather all the information. Your report is just one piece. Finance could use a similar process to help improve communication. It forces the information gathering step before taking action so that you don’t waste time chasing the wrong rabbits.
Be Organized & Purposeful in Your Delivery
Nobody enjoys sitting through a two hour meeting that could have been an email. It’s an intrusion of time that feels disrespectful. Your colleagues don’t have the time or attention span for long-winded, boring explanations. And even if they did, the capacity of the human brain to receive and retain new information has limitations.
Effective communication requires purpose and organization. While you want to give the why behind your no’s, you don’t need to give a complete history of your thought process along with it. Stick to relevant details and verbally connect the dots between your ask and the reason behind it.
The good news is, the basic principles of effective communication are universal:
- Understand the Root Problem
- Know Your Audience and Adjust Your Communication Accordingly
- Communicate the Bottom Line Up Front (BLUF)
- Keep It Simple
- Choose Method of Communication Carefully
- Provide Scenarios/Ranges of Outcomes
Bottom Line–Finance Can [and Should] Be Collaborative
Finance may have a reputation that transcends industries, but that doesn’t mean you have to maintain the status quo. It’s time to step out of the box and become a strategic partner in your organization, creating connection and fueling growth.
By being approachable, understanding your business, and mastering simple communication techniques, you can get the information that you need to create better forecasts, make stronger decisions, and offer more credible advice.
Contact Embarc Advisors today to gain another partner when influencing through connection
